Here are five trends for ASC administrators to watch.
1. New technology won't replace surgical skill. In some specialties, such as spine surgery, new technology is continuously entering the market at very high price. However, unless it proves a vastly better outcome than the standard surgery, it won't last. The FDA approval process for medical devices and technology demands a high level of effectiveness, and declining reimbursements from insurance companies mean that fewer patients are able to undergo new types of procedures. "Technology will never replace the surgeon's ability, talent and skill," says Chris Zorn, vice president of Spine Surgical Innovation. "At best, technology can augment and support it. You can get too deep with technology and think it's the answer. I think the answer is trying to do tried and true procedures in a very simplistic, effective and minimally traumatic way for your patients."
For example, many device companies now are focused on developing percutaneous systems for fusions. "These systems are often technically challenging procedures for your above-average surgeon to learn and be proficient at, and it's a change from the traditional approach," says Mr. Zorn. "There's a lot more equipment involved in doing one of these cases, so there's also a cost factor in that.
2. ICD-10 is coming, ready or not. The transition to ICD-10 will affect many areas of organizations. A complete assessment of business operations should be conducted to determine areas that will be affected by the transition. The biggest mistake is waiting to start planning for ICD-10. CMS has made it clear that there will be no extension of the deadline for ICD-10," says Steve Claypool, MD, is vice president of clinical development and informatics, and Allison Errickson, CPC-H, is director of coding compliance and content, Clinical Solutions Division, for ProVation Medical. Sites that start preparing now by creating an ICD-10 transition plan will be in a much better position when the codes become effective.
According to the AHIMA website, "early preparation using a phased approach has proven to be the key to success in countries where ICD-10 is currently in use." Another mistake is planning to rely on the General Equivalency Mappings. The GEMs can certainly be used as a tool; however, they are not a one-to-one mapping. With five times more codes available in ICD-10, the documentation will need to be more granular in order to code accurately. According to CMS, it will be more efficient and accurate to work from medical record documentation. While ICD-10 includes unspecified codes, sites may encounter reimbursement issues if they are not coding to the highest degree of specificity.
3. Outsourcing business responsibilities to the experts. There are potential benefits of outsourcing, such as providing accounting services, human capital management and system integration. Outsourcing can integrate these systems easily for your surgery center. For example, executive vice president of Client Services and Network for Access MediQuip, Jon Buffa, says the company's services, including device supply chain, data and healthcare management solutions, can help in this area. Ambulatory surgery centers can benefit from these solutions by improving volume, physician and patient satisfaction, cash flow and predictability of surgical margins.
4. Performing valuation before a potential sale. Principle Valuation recently did a business valuation (real estate, equipment, and operations) for an ASC owned by a group of physicians. "They were considering selling to a local hospital and wanted to know the different values," says Adam Lynch of Principle Valuation. "This valuation was done before any discussions took place with the hospitals. Why was it smart? It is crucial to know what you are worth and why. An owner may have an idea what they are worth or the number they would prefer, but getting an outside valuation gives you market value. This group was proactive and was able to use our information to help with their strategy."
5. Management companies owning minority stake in the ASC. The biggest advantage of an ASC management company having a minority stake in a surgery center is there is room for more partners, says Stephen Rosenbaum is CEO of Interventional Management Services, an ambulatory surgery center management and development company. "At the end of the day, the percentage points of ownership always have to add up to 100 percent — the more one partner owns means there will be less room for everyone else," he says. "In a partnership that the management company owns 30 percent, for example, there is 70 percent remaining for your physician partners as opposed to only 49 percent for them in a majority deal."
IMS has both majority and minority position in our centers. With respect to those centers in which we have a minority interest, there are sometimes different reasons for that position. "In some cases we have a minority interest simply so the physicians can have more," says Mr. Rosenbaum. "In others, however, we have minority interest in order to make room for a hospital partner. You almost have to be a minority partner in a hospital joint venture — there's just not room for everybody to have large portions of ownership."
At the end of the day, the physician-partners need to own enough to influence their environment. If the management company owns too much and the hospital too little then there is risk the physicians will become disengaged.
Related Articles on ASC Turnarounds:
8 Tricks to Save More Money at Your Surgery Center
10 ASC Must-Reads From the Week of Nov. 14
8 Ways to Involve ASC Physicians in Physician Recruitment
1. New technology won't replace surgical skill. In some specialties, such as spine surgery, new technology is continuously entering the market at very high price. However, unless it proves a vastly better outcome than the standard surgery, it won't last. The FDA approval process for medical devices and technology demands a high level of effectiveness, and declining reimbursements from insurance companies mean that fewer patients are able to undergo new types of procedures. "Technology will never replace the surgeon's ability, talent and skill," says Chris Zorn, vice president of Spine Surgical Innovation. "At best, technology can augment and support it. You can get too deep with technology and think it's the answer. I think the answer is trying to do tried and true procedures in a very simplistic, effective and minimally traumatic way for your patients."
For example, many device companies now are focused on developing percutaneous systems for fusions. "These systems are often technically challenging procedures for your above-average surgeon to learn and be proficient at, and it's a change from the traditional approach," says Mr. Zorn. "There's a lot more equipment involved in doing one of these cases, so there's also a cost factor in that.
2. ICD-10 is coming, ready or not. The transition to ICD-10 will affect many areas of organizations. A complete assessment of business operations should be conducted to determine areas that will be affected by the transition. The biggest mistake is waiting to start planning for ICD-10. CMS has made it clear that there will be no extension of the deadline for ICD-10," says Steve Claypool, MD, is vice president of clinical development and informatics, and Allison Errickson, CPC-H, is director of coding compliance and content, Clinical Solutions Division, for ProVation Medical. Sites that start preparing now by creating an ICD-10 transition plan will be in a much better position when the codes become effective.
According to the AHIMA website, "early preparation using a phased approach has proven to be the key to success in countries where ICD-10 is currently in use." Another mistake is planning to rely on the General Equivalency Mappings. The GEMs can certainly be used as a tool; however, they are not a one-to-one mapping. With five times more codes available in ICD-10, the documentation will need to be more granular in order to code accurately. According to CMS, it will be more efficient and accurate to work from medical record documentation. While ICD-10 includes unspecified codes, sites may encounter reimbursement issues if they are not coding to the highest degree of specificity.
3. Outsourcing business responsibilities to the experts. There are potential benefits of outsourcing, such as providing accounting services, human capital management and system integration. Outsourcing can integrate these systems easily for your surgery center. For example, executive vice president of Client Services and Network for Access MediQuip, Jon Buffa, says the company's services, including device supply chain, data and healthcare management solutions, can help in this area. Ambulatory surgery centers can benefit from these solutions by improving volume, physician and patient satisfaction, cash flow and predictability of surgical margins.
4. Performing valuation before a potential sale. Principle Valuation recently did a business valuation (real estate, equipment, and operations) for an ASC owned by a group of physicians. "They were considering selling to a local hospital and wanted to know the different values," says Adam Lynch of Principle Valuation. "This valuation was done before any discussions took place with the hospitals. Why was it smart? It is crucial to know what you are worth and why. An owner may have an idea what they are worth or the number they would prefer, but getting an outside valuation gives you market value. This group was proactive and was able to use our information to help with their strategy."
5. Management companies owning minority stake in the ASC. The biggest advantage of an ASC management company having a minority stake in a surgery center is there is room for more partners, says Stephen Rosenbaum is CEO of Interventional Management Services, an ambulatory surgery center management and development company. "At the end of the day, the percentage points of ownership always have to add up to 100 percent — the more one partner owns means there will be less room for everyone else," he says. "In a partnership that the management company owns 30 percent, for example, there is 70 percent remaining for your physician partners as opposed to only 49 percent for them in a majority deal."
IMS has both majority and minority position in our centers. With respect to those centers in which we have a minority interest, there are sometimes different reasons for that position. "In some cases we have a minority interest simply so the physicians can have more," says Mr. Rosenbaum. "In others, however, we have minority interest in order to make room for a hospital partner. You almost have to be a minority partner in a hospital joint venture — there's just not room for everybody to have large portions of ownership."
At the end of the day, the physician-partners need to own enough to influence their environment. If the management company owns too much and the hospital too little then there is risk the physicians will become disengaged.
Related Articles on ASC Turnarounds:
8 Tricks to Save More Money at Your Surgery Center
10 ASC Must-Reads From the Week of Nov. 14
8 Ways to Involve ASC Physicians in Physician Recruitment