The most obvious contributor to a successful and profitable ASC is a group of surgeons with high case volume, and in order to maintain growth, recruitment is essential. When approaching a new physician, it is easy to point to the clinical and financial advantages of working in the outpatient environment. For some early adopters, the decision to leave the hospital and invest in an ASC is almost as elemental as their choice to practice medicine. However, uncovering the reasons why some physicians are reluctant to join ASCs, and addressing these issues head-on, could lead to the recruitment of surgeons who would otherwise maintain the status quo.
I recently reviewed the top three reasons why physicians are reluctant to join an ASC with Dr. Paul Krawitz, director of ophthalmology for The Melville Surgery Center on Long Island, N.Y.
Reason #1 — Uncertainty or size of the investment
There is no question that many financial portfolios lost significant value in the past few years. It is also an industry statistic that half of ASCs fail to turn a profit. In order to overcome this trepidation, it is important to have a strong management team in place and physician partners who will attest to the strength of their ASC investment. While the initial risk of the founding members has been rewarded, buying into a revenue stream of an established entity often proves to be one of the best investments a physician has ever made. If the concern is with the cost of the buy-in, the distributions of a successful center should cover the costs of a five-year loan.
Dr. Krawitz advises any physician considering buying an ownership percentage of an ASC to look carefully not only at the previous surgical volume and profits of the center, but also the track record of the management since the success is coordinated by them, not the surgeons themselves. "Even so, we have found that the biggest hurdle facing prospective physicians' financial concerns is that they fail to make the decision objectively as they would any other investment opportunity," says Dr. Krawitz. "Some of this may be due to the enthusiasm of the current owners who are often so elated to be out of the sluggish hospital OR environment that the description of their satisfaction is misinterpreted as a hard sell. In our well-managed center, the founding partners recouped their initial investment within a matter of months; new surgeons can reasonably expect to earn their investment back in three years, which outperforms many investment portfolios."
Reason #2: Fear of the local hospital
Some surgeons have the impression that scheduling cases at the surgery center is the equivalent of committing professional suicide. They fear a loss of block time and worry about referrals. While it is true that certain specialties cannot fully divorce themselves from the hospital, a potential loss of block time is not even a consideration once a surgeon experiences the efficiencies of an ASC. With greater patient satisfaction and lower infection rates, it is not uncommon to see a physician's practice shift towards more outpatient procedures while he or she refers out higher acuity cases. In fact, the argument can be made to hospitals that moving ambulatory cases out of their ORs opens up time for higher paying inpatient cases. With turnaround times of less than 10 minutes, a surgeon can take the equivalent of a whole day's worth of surgery in the hospital and be finished by lunchtime at the surgery center. The time saved could be used by the physician to see more patients, expand the practice and increase value to the medical community.
"Every one of our owners at Melville Surgery Center grossly overestimated the negatives and underestimated the positives of shifting their surgical practices from the hospital to the ASC," says Dr. Krawitz. "Not only haven't we lost referrals, but actually the reverse has been true. Your peers will accept your choice to move to an ASC, and in addition, the positive feedback that they hear about their patients' experiences will garner even more referrals." Dr. Krawitz adds that an environment valuing the surgeon's time and accommodating his or her needs with enthusiasm adds to the doctor's quality of life. "Your happiness in spending a day in the OR is rarely something you will think about before choosing to operate in an ASC, but you can't help noticing the change in your demeanor after you've made the move."
Reason #3, Competition, professional jealousy or personal grudges
These are tough objections to uncover and perhaps the hardest to overcome. This is because these problems are psychological and/or emotional. Even though the new surgeon will benefit clinically and financially from joining the ASC, the idea of "feathering someone else's nest" is sometimes too hard to swallow. One way around this is to have a neutral partner reach out to the recruit. It is not uncommon for there to be differences among surgeons; however, scheduling can be worked so the two use the center on different days. If the tension is derived from financial disparity, the new physician needs to be convinced that the investment is still one of the best they will ever make. Perhaps they are not able to get in at the same level of ownership as the founders of the center, but then again the financial risk has been substantially abated. The analogy of being able to turn back the clock and buy a successful stock is apt. The present day percentage of return is not the same but is still a solid investment and certainly better than the alternative. If the concern is that of a competing practice, sharing the profits of a successful surgical facility is an excellent way to extend an olive branch.
"In a common, pleasurable, profitable business endeavor, you will see your peers — and yes, even your competitors — differently," says Dr. Krawitz. "And yet there are surgeons in our area who are frozen with inertia, worried about how their joining an ASC will affect the finances of the other doctors. It is highly irrational behavior that is not common outside of medicine."
The goals of all surgeons working in an ASC ideally align on some level. Exceptional patient care, increased efficiency, lower cost and higher profits are all factors that matter. The key is to uncover the order of importance to each recruit and speak directly to the area of concern. Once the objections have been handled, the choice to join the ASC becomes clear.
Mr. Merrill (tmerrill@ascoa.com) is a vice president of Acquisitions & development for Ambulatory Surgical Centers of America.
Read more insight from the leadership team of ASCOA:
- 5 Best Practices to Keep Your ASC Profitable
- 7 Ways to Ensure Payment Without Damaging Patient Relationships
- 3 Questions to Determine the Turnaround Potential of an ASC