Richard Kube, MD, is the CEO, founder and owner of Prairie Spine & Pain Institute in Peoria, Ill. Dr. Kube built his new surgical facility, Prairie SurgiCare, and worked to streamline the project. Prairie SurgiCare went from demolition to occupancy permit in about six weeks with accreditation six weeks later.
Countless considerations go into building a new spine surgery center, and here Dr. Kube gives his five points on what major factors contribute to building a successful center from the start.
1. Adhere to accreditation guidelines. Dr. Kube's spine center is classified as an ambulatory surgical treatment facility certified by The Accreditation Association for Ambulatory Health Care. When preparing for his build out, he had to follow all AAAHC guidelines for physical site requirements.
Know the site requirements for your accrediting body, including stipulations from The Centers for Medicare and Medicaid Services. Nearly all accrediting agencies print physical environment checklists to consider during the construction phase of a surgery center.
It can also be a good idea to hire an architect who is certified by The American Institute of Architects, and use an AIA contract, because it holds the architect accountable for making sure everything done during the process meets a high standard of quality and adheres to the spec in the site plan, Dr. Kube says.
"A lot of contractors won't be familiar with building healthcare facilities," he says. "It's important that they follow your [guidelines] specifically. You don't want them cutting any corners that may adversely affect accreditation."
He recommends checking every week that all standards are being met. Potential issues could be firewalls, ceilings and the building's grid. Hold the architect accountable for being on site and surveying the area so future accreditation guidelines are precisely adhered to.
2. Hire a job foreman. Hiring a job foreman to be on site every day can keep construction problems from happening and speed up the finished product, Dr. Kube says.
Find a foreman to work for your surgery center who is familiar with the accreditation and surgery center guidelines. The right foreman can save you weeks on the construction timeline.
"That person is able to make sure they are following the physical environment guidelines, that the work is getting done on site and the [construction] guys are efficient," he says. "It's another check and balance."
Most contractors are not at the work site every day, closely monitoring the work to make sure deviations from the plan do not occur. If mistakes are made, change orders have to be filed, costing time and money. An onsite foreman also minimizes the amount of change orders that a project requires, and is well worth the price of his or her salary, he says.
3. Determine proper financing. One of the main steps before construction begins is to determine the cost of the project and budget for any potential overages. The salaries for a contractor or foreman should be included in your cost estimate, as well as future equipment costs, Dr. Kube says.
One element of proper financing is to know what type of cases your surgery center will predominantly handle, including Medicare, commercial payors, worker's compensation or a combination. A high volume of worker's compensation cases means an additional three to four months or more before cases get paid.
"It's important to think about [the case mix] with financing," he says. "You need to pay the bills and meet payroll. You need to analyze and assess what kinds of cases you will be doing in order to anticipate the age of receivables and what financing is appropriate to those cases."
Surgery centers using injections or scopes typically have equipment costs incorporated into the lease, whereas minimally invasive spine procedures with high case costs can require carve outs or specific contract negotiations. Know what you will need your cash flow to look like to be successful.
4. Create vendor incentives. Surgery center owners should also work with ASC vendors and create incentives to get the necessary supplies delivered prior to the center's opening. Dr. Kube recommends setting clear penalties for vendors who do not make delivery deadlines.
Though the price is important, having the equipment in time for opening is paramount, so agreed upon discounts create an incentive to meet the deadline.
"The time is of the essence," he says. "If you can't meet the timeline, we start stipulating a percent off of the product for every day over. Sometimes they have to concede 5 or 10 percent in cost for every day or two over."
5. Recruit a dedicated management team. One of the most important pieces of opening a successful spine surgery center is the management team. Recruit a top-notch director of nursing, chief operating officer or administrator and medical director prior to construction to be prepared once the center is ready to open.
Dr. Kube's director of nursing, Nicole Dentino, and administrator, Scott Anderson, were crucial to making sure all accreditation guidelines were fulfilled so when the inspection day came, his center, Prairie SurgiCare, passed with a perfect score, he says.
All management members need to be unified and working together or the division will hamper your spine center's projects, cash flow and overall performance. All of my staff members were equally motivated to get this project done, he says.
"There are a considerable number of moving parts," he says. "You need experienced, dedicated people involved. You can expect and plan that it will be a cost and endeavor, but it will be well worth it with the right pieces in place."
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Countless considerations go into building a new spine surgery center, and here Dr. Kube gives his five points on what major factors contribute to building a successful center from the start.1. Adhere to accreditation guidelines. Dr. Kube's spine center is classified as an ambulatory surgical treatment facility certified by The Accreditation Association for Ambulatory Health Care. When preparing for his build out, he had to follow all AAAHC guidelines for physical site requirements.
Know the site requirements for your accrediting body, including stipulations from The Centers for Medicare and Medicaid Services. Nearly all accrediting agencies print physical environment checklists to consider during the construction phase of a surgery center.
It can also be a good idea to hire an architect who is certified by The American Institute of Architects, and use an AIA contract, because it holds the architect accountable for making sure everything done during the process meets a high standard of quality and adheres to the spec in the site plan, Dr. Kube says.
"A lot of contractors won't be familiar with building healthcare facilities," he says. "It's important that they follow your [guidelines] specifically. You don't want them cutting any corners that may adversely affect accreditation."
He recommends checking every week that all standards are being met. Potential issues could be firewalls, ceilings and the building's grid. Hold the architect accountable for being on site and surveying the area so future accreditation guidelines are precisely adhered to.
2. Hire a job foreman. Hiring a job foreman to be on site every day can keep construction problems from happening and speed up the finished product, Dr. Kube says.
Find a foreman to work for your surgery center who is familiar with the accreditation and surgery center guidelines. The right foreman can save you weeks on the construction timeline.
"That person is able to make sure they are following the physical environment guidelines, that the work is getting done on site and the [construction] guys are efficient," he says. "It's another check and balance."
Most contractors are not at the work site every day, closely monitoring the work to make sure deviations from the plan do not occur. If mistakes are made, change orders have to be filed, costing time and money. An onsite foreman also minimizes the amount of change orders that a project requires, and is well worth the price of his or her salary, he says.
3. Determine proper financing. One of the main steps before construction begins is to determine the cost of the project and budget for any potential overages. The salaries for a contractor or foreman should be included in your cost estimate, as well as future equipment costs, Dr. Kube says.
One element of proper financing is to know what type of cases your surgery center will predominantly handle, including Medicare, commercial payors, worker's compensation or a combination. A high volume of worker's compensation cases means an additional three to four months or more before cases get paid.
"It's important to think about [the case mix] with financing," he says. "You need to pay the bills and meet payroll. You need to analyze and assess what kinds of cases you will be doing in order to anticipate the age of receivables and what financing is appropriate to those cases."
Surgery centers using injections or scopes typically have equipment costs incorporated into the lease, whereas minimally invasive spine procedures with high case costs can require carve outs or specific contract negotiations. Know what you will need your cash flow to look like to be successful.
4. Create vendor incentives. Surgery center owners should also work with ASC vendors and create incentives to get the necessary supplies delivered prior to the center's opening. Dr. Kube recommends setting clear penalties for vendors who do not make delivery deadlines.
Though the price is important, having the equipment in time for opening is paramount, so agreed upon discounts create an incentive to meet the deadline.
"The time is of the essence," he says. "If you can't meet the timeline, we start stipulating a percent off of the product for every day over. Sometimes they have to concede 5 or 10 percent in cost for every day or two over."
5. Recruit a dedicated management team. One of the most important pieces of opening a successful spine surgery center is the management team. Recruit a top-notch director of nursing, chief operating officer or administrator and medical director prior to construction to be prepared once the center is ready to open.
Dr. Kube's director of nursing, Nicole Dentino, and administrator, Scott Anderson, were crucial to making sure all accreditation guidelines were fulfilled so when the inspection day came, his center, Prairie SurgiCare, passed with a perfect score, he says.
All management members need to be unified and working together or the division will hamper your spine center's projects, cash flow and overall performance. All of my staff members were equally motivated to get this project done, he says.
"There are a considerable number of moving parts," he says. "You need experienced, dedicated people involved. You can expect and plan that it will be a cost and endeavor, but it will be well worth it with the right pieces in place."
More Articles on ASC Transactions and Valuations:
Medical Facilities Corporation to Acquire 51% Interest in Arkansas Surgical Hospital
Kentuckiana Oral & Maxillofacial Surgery Associates Breaks Ground on $4M ASC
Ohio's The Hand Center Opens, Receives Accreditation