Enclothed Cognition

Content marketing can be tricky to grasp at first, simply because the concept of what constitutes content has changed over the past five to ten years. Thanks to mobile usage and social media, content today means a whole lot more than just a textual article posted online.

Revenue cycle management has grown to be increasingly tricky to handle, largely due to the ever growing healthcare reforms and policies. With the implementation of ICD-10, practices as well as hospitals have started to arm themselves with as many supplies and tools as they can to help them manage their revenue cycles efficiently.

Reprinted with permission from JP Roach, Associate and Assistant General Counsel at Hughes Marino.

Click here to read the original article.

Finding the right real estate for your medical practice can be laborious, time consuming, and expensive. At Hughes Marino, we help companies make the right real estate decisions for their businesses by delivering great spaces and lower rents. In my role as leader of the Medical Practice Team, I help physicians and other healthcare professionals make the best real estate and space planning decisions for their practices. Medical space is very different from traditional office space with its own set of challenges that require the utmost care when leasing such space. What follows are five mistakes doctors often make when signing a new medical office lease. Our Medical Practice team not only helps you avoid these mistakes, but also guides you through every step of the medical office leasing process to help you find the perfect solution for your practice.

1. Signing a Personal Guarantee

Landlords love personal guarantees. However, as a tenant, you should not. A personal guarantee is a legal contract between a landlord and an individual to guarantee a specific obligation of a business, usually the remaining rental obligation under a lease. Personal guarantees provide the landlord with additional recourse in the event of a default on a lease agreement. The implications of a personal guarantee are significant because your personal assets (e.g., house, cars, retirement funds, etc.) are at risk should you default on your lease. The landlord will tell you the high cost of the tenant improvements that are often needed for medical office space creates additional risk, and that you need to sign the personal guarantee to provide additional security for your full performance of the lease. We disagree. The landlord who owns a medical office building should expect a high level of tenant improvements will be required. Further, the rental rate for medical office space is typically higher because of the tenant improvement contribution by the landlord. This is nothing more than a simple application of risk and reward. Yes, there is risk to the landlord in a real estate lease transaction, but that is why the rental rates for medical office space are higher than those for traditional office space. At the end of the day, it all comes down to the negotiations. If the landlord wants to reduce risk by requiring a personal guarantee, should there not be a corresponding reduction of the rental rate? Are the improvements highly specialized? Is the medical practice a new business, or is there a solid history of financial performance to ease the landlord’s concerns? Are there other suitable properties where a personal guarantee would not be required? If some form of personal guarantee is warranted, there are steps you can take to protect yourself and limit your exposure. For example, if you are in a partnership with multiple doctors, try to limit your guarantee obligation to your percentage ownership in the practice. Also, you should be able to structure a guarantee that declines each year as the landlord’s exposure is reduced. Additional weapons in your negotiating arsenal can include a release of the guarantee based on the percentage of the lease or loan paid off, a specific end date for the guarantee, exclusion of certain personal items from the guarantee, and in some circumstances, personal guarantee insurance.

2. Underestimating the Cost of Tenant Improvements

Tenant improvements for a medical office suite can be very expensive. Building out space to fit the unique needs of your practice can range anywhere from $50 to $250 per square foot, depending on myriad factors such as the current condition of the existing suite (warm or cold shell), the level of specialized requirements for the practice (e.g., plumbing in exam rooms, lead walls for x-ray units, surgery components, etc.), and personal choice of improvement finishes. It is important to understand the implications of the current condition of the suite and how that affects the purchasing power of each tenant improvement dollar the landlord is providing. A $25-per-square-foot allowance for a second-generation dental practice may be adequate, but the same allowance will barely get you started if you are building out from a “cold shell.” The point is to understand what you are getting into before you sign a lease. Our team helps you assess the current condition of a space by developing a detailed and competitive budget for the construction project while you are still evaluating your options.

3. Underestimating the Timeline and Complexity of the Build Out

Just as the cost for tenant improvements varies by practice specialization and current condition of the suite, so does the project’s complexity, and ultimately, the timeline for delivery of the finished space. For example, a practice requiring a surgery suite and digital x-ray units will take substantially longer to design, permit and build than a family practitioner’s office that may just require individual exam rooms. We typically advise our medical clients to plan for a minimum six-month build-out period in order to design, obtain the appropriate permits, and construct the suite. For expensive and complex medical projects, the build-out period can be a year or even longer. So it is crucial to deploy the right team of experts from the outset. Time is one your best leverage tools in real estate negotiations. If you run out of it, things can get expensive fast. Our team provides professional construction and project management so that you understand the complexity of the project and can plan accordingly.

4. Trusting the Landlords and Their Agents to Represent You

In a lawsuit, it is illegal, unethical – and even illogical — for an attorney to represent both the plaintiff and the defendant. There is an obvious conflict of interest. In real estate transactions this practice is called “dual agency,” and it carries with it the same inherent conflict of interest, except that it is legal and done all the time by so-called “full service” real estate agents. We are unique because we represent only tenants; never landlords. Landlords hire the “full service” real estate agents to find doctors to fill their empty medical office buildings. These agents’ interests are in lock step with their landlord employers and their singular aim is to maximize the rent paid by the medical tenants. On the other hand, tenants want to pay less rent. And yet many unsuspecting physicians trust these very same landlord/full service agents to advise them in their real estate negotiations. These physicians are often later disappointed that their agent did not do more for them in the negotiations. But if they understood the agent’s true allegiance, they would understand their motivation. The inherent conflict of interest that exists in dual agency relationships plagues the commercial real estate industry and should be avoided by physicians – and other tenants – at all costs.

5. Trying to Go It Alone

The old adage may be, “Physician, heal thyself,” but when it comes to real estate, you are best served by an expert who will capitalize on market conditions to obtain the best possible real estate outcome for you and your practice. Every space is different, and each landlord’s situation is unique. How long has the landlord owned the building? How long has the space been empty? Does the building owner have a large loan coming due? Rents are not set by landlords; they are set by tenants. What a landlord is willing to accept is often subject to wide swings based on what the tenant will agree to pay. But don’t try to go it alone. As a physician, your time is best spent focusing on your practice and working with your patients. The same way you hire a practice manager to manage your practice, an attorney to handle your legal affairs, an accountant to handle your taxes, and a financial adviser to manage your wealth, find a qualified, conflict-free medical office expert, someone worthy of your trust, and then empower that real estate professional to guide you in your real estate planning and negotiations to save you time, risk, and money. The first step is to start with Hughes Marino. Please feel free to contact JP Roach, head of Hughes Marino’s Medical Practice division, directly at jp@hughesmarino.com for a complimentary analysis of your practice’s real estate needs. JP Roach is an associate and Assistant General Counsel of Hughes Marino, a San Diego commercial real estate company specializing in San Diego tenant representation and building purchases. Contact JP direct at (619) 238-2111 or jp@hughesmarino.com to learn more.

By Michele Shermak, MD Reprinted from Young Plastic Surgeons Perspective, April 2003 Plastic Surgery News.Despite exuberant clinical exposure during plastic surgery training, important practical issues related to day-to-day practice as an attending may not be addressed, particularly for private practice situations.

I recently visited with my mentor, Dr. Pinkel, and had the privilege of hearing his stories about the inception of St. Jude Children's Hospital, a place that has changed the lives of millions. He tells me about getting cards from his patients who now have their own grandchildren! The pride in his voice and love for his patients, even those he had fifty years ago, is so obvious. He is 87 years old this year, suffers from post-polio syndrome (he nearly died from the disease as a resident), and won't be around forever, I know. I am so pleased to hear these stories, and share them here.

Danny Thomas recruited Dr. Pinkel to be the medical director of St. Jude, as he had started a pediatric cancer center where he had done his residency, in Buffalo, NY. He refused. He didn't want to move to Memphis, and Memphis didn't want the hospital there anyway. Danny continued to call him, and he finally accepted the job after receiving some advice from his own mentor: "You're young. If it flops, you can always do something else." Don Pinkel accepted the job under two conditions. The first was that the hospital would accept all patients, regardless of ability to pay. The second was that it would be fully racially integrated, from the patients all the way up to senior staff. A pretty controversial demand, for a Southern state in 1959.

As I sit talking to him, his wife, also a pediatric hematologist/oncologist, tells me she is preparing to go to Memphis for the 50th anniversary gala to represent him as he is unable to travel now. The gala, which many celebrities attend, is to celebrate the hospital's first opening it's doors in 1962, and is specifically honoring the first five medical directors, of which Dr. Pinkel is the first. He tells me in detail about the other four, who is still living, who is coming to represent each. He tells me about the influential researchers he recruited to come to Memphis, how he wouldn't get off the phone with one young man- for seven hours- until he agreed to come. How another man, a virology researcher, was eager to come to Memphis and study cancer after losing his wife at age 34 to a particularly virulent breast cancer. (At the time, they thought ALL came from a viral source mutating DNA. Keep in mind how new of an idea DNA was in the late 1950s).

I am amazed by this history. I'm laughing at his mentor's comment, that if it flops, he can always do something else- knowing the global presence of St. Jude's in 2012. The thought that a virus caused leukemia. The realization of how significant racial integration was at this time. Everything he said, fit into the framework of today, realizing how different our framework might be had he done something else with his life.

And I secretly wish I could go to the gala to represent him too, because I am so proud of him. And also to meet Gwyneth Paltrow and Jennifer Aniston. I just know we'd be friends.

Medelita Guest Blogger: Dr. Anne Kennard. Anne is an OB/GYN resident in Phoenix. She has kept a collection of writings about medicine/becoming a doctor since her second year of medical school, and we’re honored to welcome her as a guest blogger for Medelita.

Aside from my usual insight about Medelita lab coats and medical scrubs, I've got something a bit more personal front of mind.  Our 11 month old daughter has had the worst runny nose, fever and cough, and to top it off - is teething, too.