Robert Henry, Senior Vice President of Development at Symbion Healthcare, discusses four trends for physician groups in outpatient surgery centers.
1. Physicians are more conscious of saving time and costs. One thing that has surprised me is the number of calls I have received for de novo projects. When I came into this position people within the industry told me that there were de novo opportunities, but the number of physicians interested in starting a new center is much higher than I expected. We are seeing a number of physicians that want to have more control over their revenue and procedures. Most of the opportunities are centered on smaller ASCs focused on the physician's own efficiency, energy and time.
I recently spoke with a physician who wanted to build a single specialty eye center for himself. Typically, a one-physician single specialty eye center is not going to be sustainable, but he said, "If we can make the numbers work, that's great, but I'm doing this for my convenience. I've gotten to the point where I'm spending way too much time going from facility to facility or office to office, and I need to be using my time much more efficiently and effectively."
He realized very quickly that he was going to need to bring in additional partners and have other physicians in the center besides himself. We looked at the cost of the space, what it would cost to build out, the equipment costs needed for the procedures, what staffing would look like — all of the fundamentals. We had a complete model for him to evaluate the center.
Based on the number of cases he would perform in the center, it would require him to bring in a number of new partners that were as busy as he was. So, he has made a decision to take a pause and evaluate what he wants to do. We couldn't get the numbers to a breakeven point where the center was cost-efficient, but his original premise of managing his time to be the most productive is still valid.
I think it's great that physicians are realizing the value of their time. I equate it to an airplane taking off with half of the seats empty; you can't get the lost revenue for those seats back. Similarly, if a physician is in his/her car driving from point to point, that is time they could be seeing patients, performing cases or spending with their families.
As reimbursements are being compressed and expenses in offices continue to increase, time is the one asset that physicians are increasingly looking at to make sure they are being as efficient as possible and having a facility that is convenient to them is extremely valuable.
2. Physician groups are combining their offices and surgical centers under one roof to maximize efficiency. I just met with a large group of orthopedic surgeons who are considering moving into a newly proposed office complex. Structurally, they would like to have a surgery center on the first floor, and their offices and clinic on upper floors in the building — the type of model where the surgical facility and the physician's office share the same space. The hospital, as well, is in close proximity to the new center. From their viewpoint, this is a highly efficient and attractive setup. They have not broken ground and are looking at a year-long plus construction process, but they will be able to have their practice and facilities exactly where they want them.
3. Physicians are examining where they fit in among physician-owned hospitals and ACOs. Physician-owned hospitals are another example of physicians looking for ways to become more efficient. If you think back to the early days of the ASC industry, physicians would start a center and build it up, but would begin having cost pressures as reimbursements declined and personnel and supply expenses increased. Groups like Symbion partnered with the physicians to help take them to the next level. Physician-owned hospitals have seen some success but are having difficulty building on their success and are looking for professional management to help them get turned around and grow. It is very interesting to see the similarities between those types of facilities.
Right now with healthcare reform and the possibility that the Affordable Care Act will — or will not — be ruled unconstitutional, physicians are very nervous about their practice and the facilities they own. They are facing ACO pressure in their marketplace, and they're wondering how they'll fit within the ACO environment. Should they partner with hospitals or maintain their independence? Is this a good time to sell?
With increasing pressures in the market, physicians and their facilities are continuously having to comply with increasing regulations. As a result, physicians are seeking professional managers to help reduce their risks. At Symbion, we help mitigate that risk for physicians. Ten years ago you could open up a surgery center with a group of physicians and be very successful, but now you need a partner who understands the consequences of this highly regulated environment.
4. Physicians are increasingly focused on quality compliance. From a risk management standpoint, quality in centers is something that physicians all want to talk about — they are all asking how to measure and report on quality. Medicare final ruling in 2012 establish the ASC Quality Reporting requirements, and centers are very nervous about complying with the new rules. It's an issue that physicians and administrators are raising, and they want to know how Symbion will help them comply with the new regulations. Symbion was one of the founding members of the ASC Quality Collaboration (ASCQC), and we are very focused on delivering quality care and began self-reporting long before required. The fact that Symbion has historically collected quality data for internal benchmarking allows us to be well-positioned to help centers comply with the new requirements.
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1. Physicians are more conscious of saving time and costs. One thing that has surprised me is the number of calls I have received for de novo projects. When I came into this position people within the industry told me that there were de novo opportunities, but the number of physicians interested in starting a new center is much higher than I expected. We are seeing a number of physicians that want to have more control over their revenue and procedures. Most of the opportunities are centered on smaller ASCs focused on the physician's own efficiency, energy and time.
I recently spoke with a physician who wanted to build a single specialty eye center for himself. Typically, a one-physician single specialty eye center is not going to be sustainable, but he said, "If we can make the numbers work, that's great, but I'm doing this for my convenience. I've gotten to the point where I'm spending way too much time going from facility to facility or office to office, and I need to be using my time much more efficiently and effectively."
He realized very quickly that he was going to need to bring in additional partners and have other physicians in the center besides himself. We looked at the cost of the space, what it would cost to build out, the equipment costs needed for the procedures, what staffing would look like — all of the fundamentals. We had a complete model for him to evaluate the center.
Based on the number of cases he would perform in the center, it would require him to bring in a number of new partners that were as busy as he was. So, he has made a decision to take a pause and evaluate what he wants to do. We couldn't get the numbers to a breakeven point where the center was cost-efficient, but his original premise of managing his time to be the most productive is still valid.
I think it's great that physicians are realizing the value of their time. I equate it to an airplane taking off with half of the seats empty; you can't get the lost revenue for those seats back. Similarly, if a physician is in his/her car driving from point to point, that is time they could be seeing patients, performing cases or spending with their families.
As reimbursements are being compressed and expenses in offices continue to increase, time is the one asset that physicians are increasingly looking at to make sure they are being as efficient as possible and having a facility that is convenient to them is extremely valuable.
2. Physician groups are combining their offices and surgical centers under one roof to maximize efficiency. I just met with a large group of orthopedic surgeons who are considering moving into a newly proposed office complex. Structurally, they would like to have a surgery center on the first floor, and their offices and clinic on upper floors in the building — the type of model where the surgical facility and the physician's office share the same space. The hospital, as well, is in close proximity to the new center. From their viewpoint, this is a highly efficient and attractive setup. They have not broken ground and are looking at a year-long plus construction process, but they will be able to have their practice and facilities exactly where they want them.
3. Physicians are examining where they fit in among physician-owned hospitals and ACOs. Physician-owned hospitals are another example of physicians looking for ways to become more efficient. If you think back to the early days of the ASC industry, physicians would start a center and build it up, but would begin having cost pressures as reimbursements declined and personnel and supply expenses increased. Groups like Symbion partnered with the physicians to help take them to the next level. Physician-owned hospitals have seen some success but are having difficulty building on their success and are looking for professional management to help them get turned around and grow. It is very interesting to see the similarities between those types of facilities.
Right now with healthcare reform and the possibility that the Affordable Care Act will — or will not — be ruled unconstitutional, physicians are very nervous about their practice and the facilities they own. They are facing ACO pressure in their marketplace, and they're wondering how they'll fit within the ACO environment. Should they partner with hospitals or maintain their independence? Is this a good time to sell?
With increasing pressures in the market, physicians and their facilities are continuously having to comply with increasing regulations. As a result, physicians are seeking professional managers to help reduce their risks. At Symbion, we help mitigate that risk for physicians. Ten years ago you could open up a surgery center with a group of physicians and be very successful, but now you need a partner who understands the consequences of this highly regulated environment.
4. Physicians are increasingly focused on quality compliance. From a risk management standpoint, quality in centers is something that physicians all want to talk about — they are all asking how to measure and report on quality. Medicare final ruling in 2012 establish the ASC Quality Reporting requirements, and centers are very nervous about complying with the new rules. It's an issue that physicians and administrators are raising, and they want to know how Symbion will help them comply with the new regulations. Symbion was one of the founding members of the ASC Quality Collaboration (ASCQC), and we are very focused on delivering quality care and began self-reporting long before required. The fact that Symbion has historically collected quality data for internal benchmarking allows us to be well-positioned to help centers comply with the new requirements.
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