Here are five steps for surgery centers to survive in markets where hospitals are employing independent physicians and physician groups.
1. Cater to independent physicians. Some physicians jump at the opportunity for set hours and salary that comes with hospital employment, but there is also an opportunity for surgery centers to cater to their needs. For instance, surgery centers can operate more efficiently, provide a better patient experience and allow surgeons to perform more cases per day than the hospital.
"Surgery centers have to compete on service and meet the needs of independent physicians," says Cliff Deveny, MD, vice president for physician practice management at Catholic Health Initiative. "Their current business model is somewhat at risk. The payment system of the future is not going to award or reward people who maintain a fragmented health system with fragmented providers. People have to partner and if you are able to be more efficient you can take a lot of volume at a lower rate."
Surgery centers can't give physicians remuneration for bringing in cases, but they can espouse the benefits of using a freestanding center as opposed to the hospital.
"Surgeons can do more cases in the same amount of time because ASCs turnaround cases is much faster and cases aren't bumped like they are in the hospital due to emergency situations," says Jim Schafer, managing principle at Rhemann. "The efficiency level for the physician is greater so they can do more cases and drive more revenue through professional fees."
The flexibility of surgery centers also appeals to surgeons. "Sometimes surgeons leave their practice to join a hospital and perform surgeries in the hospital's operating room, but the hospital isn't responsive to the surgeons' needs," says Kathy Tayon of Fowler White Boggs. "The surgeon might use certain equipment for decades in his practice and the hospital may not allow it. Surgery centers can be more flexible."
2. Merge and expand when possible. If there are several surgery centers in the market, consider merging into one group or branding effort to expand the center's reach. Surgery centers can also expand to include new services in states where a certificate of need isn't necessary.
"There will
be consolidation on the independent side, but surgery centers can hire national partners to drive efficiency and leverage synergies of people working together," says Dr. Deveny. "Surgery centers can also be providers in markets where there are sophisticated independent physician groups. They can provide observation beds and 23 hour stays, urgent care and procedure rooms."
ASCs can also expand to include ancillary services like physical therapy so the patient can continue their care at the ASC. Diagnostic modalities are also a possibility.
"Diagnostic tools are becoming more available to surgery centers and the cost is really being driven down so people can do screens for different types of issues that were previously in the hospital realm," says Mr. Schafer. "Patients like having the one-stop shop."
3. Become part of an ACO. It will be critical for ambulatory surgery centers to participate in the new healthcare delivery models developing in the future, especially if they are competing with hospitals in the marketplace. Accountable care organizations are being launched around the country and surgery centers should have a place at the table, especially since they are often low cost, high quality providers.
"I think it's critical that the ASCs figure out how to become active participants in the ACO or clinically integrated network in their community," says Dr. Deveny. "As there is more transparency of prices around consumerism in healthcare, people with high deductible plans will look for lower costs; as the ACO or clinically integrated network is looking at shared savings, they will drive patients to the low cost setting with good quality and patient satisfaction."
ASCs are well positioned for success with ACOs in the future, but they have to be transparent with their data. This means sharing information with the health system's electronic medical record or other data software. Within the ACO, primary care physicians are often the drivers of care and if they are able to see benefit from the ASC setting, they will direct patients there.
4. Tout patient satisfaction. As payors move away from fee-for-service and more toward pay-for-performance, outcomes and patient satisfaction are going to become a key component of reimbursement levels. "Have terrific quality control at the facility so professionals are having a great experience and producing quality outcomes for their patients," says Ms. Tayon. "Better outcomes will allow you to control costs as well, which is important."
Since surgery centers are smaller, they are easier to navigate than hospital campuses and have a lower infection rate, which is beneficial for both patients and physicians.
"It's important for ASC administrators to stay in touch with all their users, whether they are owners or not, to make sure their patients are having a good experience," says Mr. Schaffer. "That's what a good administrator does from the beginning."
5. Partner with hospitals. Instead of competing for physicians in the market, surgery centers can partner with hospitals on a joint venture. In some cases, hospitals may direct patients to a joint venture surgery center, or allow employed surgeons to perform cases there, to free up the inpatient operating rooms for higher acuity cases.
"I've seen some cases where hospitals proactively sought to joint venture with surgeons because they know it was a good idea to keep the physicians engaged," says Mr. Schaffer. "Depending on their level of investment, hospitals have allowed physicians quite a bit of operational governance because one of the advantages of the surgery center is that physicians know how to run a really efficient OR."
In this case, surgeons still have the operational advantages of an independent ASC, but now the hospital also has vested interest in the center's success. However, the surgeons will have smaller margins if they sell part ownership to a hospital.
More Articles on Surgery Centers:
11 Ways for ASCs to Make More Money Per Procedure
7 Trends in ASC Building to Compete With Hospitals
Outlook on ASC Opportunities for CON States: Q&A With Dr. Edward Gronka of Fayette Plastic Surgery Center
1. Cater to independent physicians. Some physicians jump at the opportunity for set hours and salary that comes with hospital employment, but there is also an opportunity for surgery centers to cater to their needs. For instance, surgery centers can operate more efficiently, provide a better patient experience and allow surgeons to perform more cases per day than the hospital.
"Surgery centers have to compete on service and meet the needs of independent physicians," says Cliff Deveny, MD, vice president for physician practice management at Catholic Health Initiative. "Their current business model is somewhat at risk. The payment system of the future is not going to award or reward people who maintain a fragmented health system with fragmented providers. People have to partner and if you are able to be more efficient you can take a lot of volume at a lower rate."Surgery centers can't give physicians remuneration for bringing in cases, but they can espouse the benefits of using a freestanding center as opposed to the hospital.
"Surgeons can do more cases in the same amount of time because ASCs turnaround cases is much faster and cases aren't bumped like they are in the hospital due to emergency situations," says Jim Schafer, managing principle at Rhemann. "The efficiency level for the physician is greater so they can do more cases and drive more revenue through professional fees."
The flexibility of surgery centers also appeals to surgeons. "Sometimes surgeons leave their practice to join a hospital and perform surgeries in the hospital's operating room, but the hospital isn't responsive to the surgeons' needs," says Kathy Tayon of Fowler White Boggs. "The surgeon might use certain equipment for decades in his practice and the hospital may not allow it. Surgery centers can be more flexible."
2. Merge and expand when possible. If there are several surgery centers in the market, consider merging into one group or branding effort to expand the center's reach. Surgery centers can also expand to include new services in states where a certificate of need isn't necessary.
"There will
be consolidation on the independent side, but surgery centers can hire national partners to drive efficiency and leverage synergies of people working together," says Dr. Deveny. "Surgery centers can also be providers in markets where there are sophisticated independent physician groups. They can provide observation beds and 23 hour stays, urgent care and procedure rooms."ASCs can also expand to include ancillary services like physical therapy so the patient can continue their care at the ASC. Diagnostic modalities are also a possibility.
"Diagnostic tools are becoming more available to surgery centers and the cost is really being driven down so people can do screens for different types of issues that were previously in the hospital realm," says Mr. Schafer. "Patients like having the one-stop shop."
3. Become part of an ACO. It will be critical for ambulatory surgery centers to participate in the new healthcare delivery models developing in the future, especially if they are competing with hospitals in the marketplace. Accountable care organizations are being launched around the country and surgery centers should have a place at the table, especially since they are often low cost, high quality providers.
"I think it's critical that the ASCs figure out how to become active participants in the ACO or clinically integrated network in their community," says Dr. Deveny. "As there is more transparency of prices around consumerism in healthcare, people with high deductible plans will look for lower costs; as the ACO or clinically integrated network is looking at shared savings, they will drive patients to the low cost setting with good quality and patient satisfaction."
ASCs are well positioned for success with ACOs in the future, but they have to be transparent with their data. This means sharing information with the health system's electronic medical record or other data software. Within the ACO, primary care physicians are often the drivers of care and if they are able to see benefit from the ASC setting, they will direct patients there.
4. Tout patient satisfaction. As payors move away from fee-for-service and more toward pay-for-performance, outcomes and patient satisfaction are going to become a key component of reimbursement levels. "Have terrific quality control at the facility so professionals are having a great experience and producing quality outcomes for their patients," says Ms. Tayon. "Better outcomes will allow you to control costs as well, which is important."
Since surgery centers are smaller, they are easier to navigate than hospital campuses and have a lower infection rate, which is beneficial for both patients and physicians.
"It's important for ASC administrators to stay in touch with all their users, whether they are owners or not, to make sure their patients are having a good experience," says Mr. Schaffer. "That's what a good administrator does from the beginning."
5. Partner with hospitals. Instead of competing for physicians in the market, surgery centers can partner with hospitals on a joint venture. In some cases, hospitals may direct patients to a joint venture surgery center, or allow employed surgeons to perform cases there, to free up the inpatient operating rooms for higher acuity cases.
"I've seen some cases where hospitals proactively sought to joint venture with surgeons because they know it was a good idea to keep the physicians engaged," says Mr. Schaffer. "Depending on their level of investment, hospitals have allowed physicians quite a bit of operational governance because one of the advantages of the surgery center is that physicians know how to run a really efficient OR."
In this case, surgeons still have the operational advantages of an independent ASC, but now the hospital also has vested interest in the center's success. However, the surgeons will have smaller margins if they sell part ownership to a hospital.
More Articles on Surgery Centers:
11 Ways for ASCs to Make More Money Per Procedure
7 Trends in ASC Building to Compete With Hospitals
Outlook on ASC Opportunities for CON States: Q&A With Dr. Edward Gronka of Fayette Plastic Surgery Center