Tri-State Surgery Center, located in Dubuque, Iowa, is a physician/hospital joint-venture ambulatory surgery center. The ASC is managed by Health Inventures. It is a multi-specialty facility with three ORs, two GI suites and on track to do about 5,000 cases this year.
Mary K. Ryan, CASC, MBA, is administrator for the surgery center and has worked in it since its inception in 1998. She discusses the history of the ASC and how it has maintained success as a joint-venture ASC for more than 12 years.
Q: How did this joint-venture ASC come to fruition?
Mary Ryan: There's a large medical group in the Dubuque area called Medical Associates Clinic and Health Plans. In 1997, the physicians progressively envisioned an ASC in their new medical office building on the west side of Dubuque so they looked to the local hospital — Mercy Medical Center — to partner with because of the certificate-of-need legislation in Iowa. In hindsight, it was fortunate for the center to be set up this way since that seems to be the direction that the industry is moving.
In 1998, the ASC opened up as a department of the hospital for a few months and then in November it transitioned into a 50/50 joint venture between the physicians and hospital. . Health Inventures manages the ASC and has been the management company since the inception of the center and was involved in setting up the whole structure.
I was part of the Health Inventures' team from the beginning. Many of the staff members used to work at the hospital and transitioned over to the ASC as we were not only familiar with and respected this large physician group, we were excited about an opportunity to be a part of something new and wonderful for Dubuque. This was such an exciting time as we built a very knowledgeable and experienced team that would deliver exceptional care. I was fortunate enough to be hired as the director of nursing and then was able to grow into the administrator role a couple of years later.
Q: Why has the physician group and hospital been able to work well together for the ASC?
MR: We've been fortunate in that the leadership positions from the hospital and the physician group have been very supportive of the separate ASC entity. Our legal entity is a 50/50 deal between the two. We have three administrative members from the hospital on our board and three physician members from the clinic side as voting members. They have been able to come to the table with their surgery center hat on which has been an enormous benefit to the center itself. Sometimes they come to the table making decisions that impact the ASC which may not be the best possible decision with respect to their own organization. When everybody comes to sit at the table with the same goal in mind, it certainly makes it a lot easier for the ASC to succeed and thrive. This, in turn, means success for both organizations as well.
They also have two other joint ventures they parent together, which helps them to really maintain a strong working relationship. These include Tri-State Occupation Health services and the Family Care Network.
Q: A concern for hospitals entering into joint ventures is a loss of case volume to the ASC. How has this issue been addressed?
MR: Our hospital parent really rose to the occasion from the beginning. When we first opened, there were a lot of unknowns as to the large possible volume that was going to be transitioning from the hospital setting that would now be done at the ASC. They were able to backfill pretty quickly with more higher-acuity patients and different service lines.
Also, our ASC really looks at our specialty mix and payor mix very closely, and benchmarks the types of cases we're doing. Back in Jan. 2010, the ASC board decided that based on the new Medicare payments we were going to receive that it didn't make fiscal sense to continue to do Medicare GI procedures. That large case volume — we've predicted to be around 700 cases — was then transitioned out of the ASC and back into the hospital environment. It was a large in-flow of patients for the hospital in a short period of time. We complement the types of cases we do and try hard not to duplicate the types of procedures at both places.
It's really an ongoing collaborative effort between the two groups (physician group and hospital). If they did not work like this, the relationship could be difficult.
Q: What are some of the ways the ASC benefits from the hospital partnership?
MR: It's really easy for me to pick up the phone and give the hospital's human resources department a call to ask questions, for example, especially when we have questions about our pension, which the team is lucky to be able to participate in. There's a lot of information, knowledge and skill-sharing back and forth. Not only HR issues but we also tap into the laundry services, biomedical engineering and transcription at the hospital at fair market value. We tap into things already done very well at the hospital which would not make sense for us to try to replicate.
Also, ASCs sometimes run into situations when they don't have the instrumentation or the sterile supplies they need. It's nice to look to your hospital partner for sharing.
Q: What is an area you have been targeting for improvement between the ASC and the hospital?
MR: Referring the previous statement, it's important to remember to not over-ask for items. What we really try to do here is make sure that not only are we in this relationship for borrowing and obtaining resources from the hospital but also to make sure the hospital is aware of the resources we have here at the ASC that perhaps it doesn't make sense for the hospital to also own. We'll purchase or own [a resource] and maybe loan it to them for fair market price. That's been something we've been working really hard on and is something we can probably do better.
Q: What do you think is critical to starting the joint-venture relationship off on the right foot?
MR: When you start talking about doing a joint-venture, make sure both parties come to the table and explain what they can bring to the relationship, what are their individual strengths. Make sure every time you get together, you're talking about what each partner is bringing that adds value. If you explore that early on, then you don't have to build that or look for it as you work through the process. From the physicians' perspective, they're bringing the patients so it is important to identify what the hospital partner is going to do to help support the entity.
One of the things I'm referring to is payor contracting. Is that something the hospital can bring to the table? Can it introduce [the ASC] to some of the major players in the market and help perhaps get a better reimbursement contract than what the ASC might be able to negotiate on its own?
Also, what kinds of resources and equipment can each entity bring to the table? The hospital's HR management — is that something the ASC tap into to? Consider equipment and supplies — does it really make sense for both [the ASC and hospital] to acquire a lot of the same equipment or is it worthwhile to set some up an agreement so we can make sure we're both utilizing one piece of equipment? . We lease our space from the physician group and are located within one of their medical office campuses, so we are able to utilize many of their resources as well. This includes IT support, maintenance services, printing, some janitorial services and access to their loading dock. So you can tell how integrated and committed both entities are with respect to the success of our center.
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