Many older surgery centers in dire financial straits can be turned around and get a new lease on life, according to Bill Southwick, president and CEO of HealthMark Partners. Mr. Southwick offers four key questions to determine if an older ASC can be turned around.
1. What is the condition of the physical plant? Even an older facility can be reorganized as long as it met CMS requirements and the layout is efficient. It often makes more sense to make some renovations on an old facility rather than build a new facility. New facilities must meet standards for larger size while older facilities can be grandfathered in.
2. What is the payor market like? Find out what major payors are willing to reimburse. This is an important ingredient of projecting the revenue and these payment levels influence another important ingredient, the number of physicians who would use the facility.
3. How many physicians would use the ASC? The number of physicians will determine the projected volume, which must reach a certain level to sustain the ASC. Both reimbursement and volume determine projected revenue.
4. What are the costs of the ASC? The projected operating costs can then be compared with projected revenues to test turnaround options.
Learn more about HealthMark Partners.
Read more guidance from the leadership of HealthMark Partners:
- Critical ASC Mistake: Fair Market Value Not Maintained on Lease Expense
- Improve ASC Profitability: Case Studies With Kenny Spitler of HealthMark Partners
1. What is the condition of the physical plant? Even an older facility can be reorganized as long as it met CMS requirements and the layout is efficient. It often makes more sense to make some renovations on an old facility rather than build a new facility. New facilities must meet standards for larger size while older facilities can be grandfathered in.
2. What is the payor market like? Find out what major payors are willing to reimburse. This is an important ingredient of projecting the revenue and these payment levels influence another important ingredient, the number of physicians who would use the facility.
3. How many physicians would use the ASC? The number of physicians will determine the projected volume, which must reach a certain level to sustain the ASC. Both reimbursement and volume determine projected revenue.
4. What are the costs of the ASC? The projected operating costs can then be compared with projected revenues to test turnaround options.
Learn more about HealthMark Partners.
Read more guidance from the leadership of HealthMark Partners:
- Critical ASC Mistake: Fair Market Value Not Maintained on Lease Expense
- Improve ASC Profitability: Case Studies With Kenny Spitler of HealthMark Partners