The following article is written by Blayne Rush, MHP, MBA, president of Ambulatory Alliances.
It is understood in the industry that once an ASC achieves breakeven financial status, each additional dollar of revenue can add up to between $.65 and $0.80 of profit to the bottom line. When looked at it in these financial terms, each partner of an ambulatory surgery center should understand that case load recruiting is a highly profitable investment of time.
There are two avenues to case load recruitment — internal and external. Using both of these avenues, the road to maximized profitability can commence once partners commit to a recruitment mindset.
Internal Case Load Recruitment
While many physician owners perceive that the simple solution is to look externally for growth, the truth is that most outpatient surgery centers have opportunities to drive growth internally. Impactful internal case load recruitment starts with creating an environment that makes it easy to capture every one of the partners' cases that is appropriate for the outpatient environment.
Evaluation
One of the first steps is to understand where the deficiencies are presenting — specifically, who is and who is not delivering eligible cases and what the barriers are to bringing the appropriate cases. With some operational tweaks and education, most surgery centers can add cases from current partners.
You need to first understand the barriers preventing you from achieving your goal. To do this, you should ask each physician the question: "What can we do differently that will make you more comfortable in bringing all your appropriate cases to the center?"
The responses are typically the same for most ASCs, and, when addressed, could help you reduce barriers to underutilization and improvement. Commonly-cited reasons why physicians are reluctant to bring ASC qualified cases to surgery centers include:
• Preferences with equipment or instruments not available at the ASC
• Investments in another facility or a treatment suite at their office
• Hospital politics/pressures
• Confusion about third party payor contracts: out-of-network vs. in-network
• Confusion with the facility cost for cash pay patients
• Scheduling/block time non-compliance
• Lack of adherence to start times
• Lack of familiarity/comfort with ASC staff
• Lack of transparency – both financially and with executive decisions
• Lack of partner enthusiasm/partner frustration
Internal recruitment strategies and operational efficiencies can counter most of these misgivings.
Your center must address and correct what can be corrected because going forward, operational inefficiencies will strongly affect recruitment and retention of cases and recruiting new doctors/partners.
The leadership's top priority is to remove as many barriers as possible, so that it is easy for the surgeons/physician to perform all of their qualified cases in this center. Once those barriers are removed, the leadership can then hold the center staff and physicians accountable for improving internal case load recruitment.
Recommendations
There are a number of strategies that most centers can start to execute immediately and on an on-going basis, which could motivate greater utilization (via increased internal case load recruitment) of the center:
1. Add an agenda line item to every board meeting asking, "What can we do differently that will make you more comfortable in bringing all your appropriate cases to the center?" Every board member will need to be prepared to answer that question, and the operational team must be prepared to find all possible solutions. It is a balance here: Some will not be solvable or will be implemented as revenue grows).
2. For physicians utilizing but not invested in the ASC, have ongoing discussions with them asking, "What could we do to help you increase your utilization of the center?" Encourage them to tell their colleagues about the center. These physicians' volumes can be a gift to the center, and they need to know that they are important and appreciated because they will tell people that tell people (the same goes if it is negative experience).
3. Create pro-formas that can quantify the financial benefits if each partner brings only a few more cases per month. Surgeon-owners must clearly see how the incremental volume growth of the right cases leads directly to higher margins.
4. Create a monthly case utilization index, volume projections and actual case volume reports for each physician to be used in board meetings as tools for transparency and case load capture.
5. Create a matrix and pro-forma that helps the physician and staff decide which cases are best for the outpatient surgery center.
6. Engage physicians' office staffs and educate them about the types of cases that are well suited to the center on an ongoing basis. It's critical that schedulers, who so often serve as gatekeepers, are involved in these discussions. Some physicians may not even realize the missed opportunity of scheduling ASC-appropriate cases elsewhere.
7. Host scheduler luncheons or happy hour at the ASC. This is an opportunity to build a relationship or a stronger relationship between the physician's and ASC staff. The physician's team will get to experience the center's qualities and learn more about the appropriate cases and payors, as well as feel a part of the surgery center. If there have been difficulties in the past it may be necessary to visit a surgeon's office, review past schedules to identify missed cases and educate the physician’s office as to why the case would have been suited for the ASC.
8. Conduct quarterly procedural audits. These can help ensure compliance with Safe Harbor regulations and can help all partners, their staff and the ASC learn which cases are eligible and appropriate cases for the ASC that are not being currently done in this ASC.
9. Evaluate each surgeon's block times — some surgeons may be able to bring more cases simply by making some favorable adjustments. Communicate the schedules to the physician's office often.
External Case Load Recruitment
The best outside recruitment efforts start with a commitment and are guided by a "sales" mindset by everyone involved. Recruiting surgeons that will invest in your ASC and increase its profits can't be a hobby that you think about only every once in a while. Instead, it must be a focused and coordinated ongoing process with someone that is accountable for its outcome.
Unfortunately, what sometimes happens instead is that physician-owners look at physician recruitment as a one-time "event," which can later be forgotten about during the center's day-to-day operation. The most successful surgery centers understand and make the recruitment an ongoing process. For some centers, this will be a paradigm shift and one that they will need to make. The market is changing, and those centers that do not adapt will not survive.
Successful recruitment campaigns are as important, if not more important, to the success of your ASC as strong payor contracts and business best practices. The most successful centers always have a core group of highly motivated physician-owners who recognize the value of ongoing recruitment and have effective strategies for growing the business.
Remember that each additional dollar of revenue can add up to between $.65 and $0.80 of profit to the bottom line once an ASC achieves breakeven financial status. Each partner needs to keep that in mind when considering how physician recruitment results in increased patient volume and profitability. Their ultimate conclusion will be that case load recruiting is a highly profitable investment of their time.
One of the greatest assets in recruiting new physicians is the mindset and commitment of the current physician base. This support can take form in a variety of ways, including speaking with new recruits, giving tours, attending new recruit open houses, going on physician visits, attending recruitment dinners, making phones calls, and/or agreeing to be part of a letter-writing campaign. You should appoint someone that will be responsible for planning and executing the recruitment of new physicians, but they cannot do it alone and will need the commitment of the physicians as well.
Strategy
You should have a two-avenue approach to this process. 1) Work with existing partners and physicians that utilize the center to develop an ongoing target list, gleaned from their knowledge of available physicians (or knowledge of physicians that will know who should be on your radar), and 2) Create a mass list of all the potential physicians and surgeons that are seeing patients in the center's market area. You should market all identified physicians through the avenues discussed above.
The role of current individual owners will depend on their personalities and comfort level, but nonetheless, all owners should accept — as part of their ownership mindset — the responsibility to be part of the recruitment process. The role can range from sharing names of potential new recruits to being the champion recruiter.
All owners should be walking billboards for the center to their practice partners and other colleagues, as well as be keeping an eye out for surgeons who could become future owners or who could bring cases to the center now. It's very important that the owners have a compelling "elevator pitch" that briefly highlights the center's unique benefits and conveys its message. Owners will be able to use this speech at medical meetings, continuing education courses, or even in the lunch line at the hospital.
Physician-partners should introduce themselves to physicians that are new to the area on a regular basis. The partners should tell these prospective investors and partners about the surgery center, noting that there could be an opportunity for them to utilize and invest in the ASC. They can encourage the new-to-the-area physician to talk with current physician-owners of the center. Physicians can quickly create an open door to recruits just by picking up the phone and introducing themselves.
Recruitment of new physicians should be an agenda item on every board meeting. During discussion on this item, physicians should identify which physicians the ASC should be reaching out to. Ask physician-owners to come prepared to put forth a few names of physicians and a little background (if known) so that that physician can be pursued. Part of the ASC's plan should be to have a continually updated target list of physicians in the community that should be contacted and a list of physicians coming into the community for future consideration.
The success of the outpatient surgery centers requires a total "all hands on deck" approach. Complacency and the wrong mindset is a major contributor of the under performance of the surgery center, and the center's top priority is to ensure that the partners and providers are always engaged. Therefore, you can present this strategy for increased internal case load recruitment, as well as more active and on-going external case load recruitment, as an exciting chance to grow the benefits for all the center's owners.
Blayne Rush is the president of Ambulatory Alliances (www.AmbulatoryAlliances.com) and is a SEC Registered and FINRA Licensed Investment Banker. He specializes in ASC Brokerage; physician recruitment and syndications; and access to the capital markets and capital structuring consulting for surgery and radiation oncology centers. He can be reach though the Ambulatory Alliances web site or by calling (469) 385-7792.
Related Articles on ASC Turnarounds:
8 Characteristics of Highly Successful Surgery Centers
10 Metrics That Reveal a Surgery Center's Financial Performance
11 Current Issues Facing Surgery Centers -- 2012
It is understood in the industry that once an ASC achieves breakeven financial status, each additional dollar of revenue can add up to between $.65 and $0.80 of profit to the bottom line. When looked at it in these financial terms, each partner of an ambulatory surgery center should understand that case load recruiting is a highly profitable investment of time.
There are two avenues to case load recruitment — internal and external. Using both of these avenues, the road to maximized profitability can commence once partners commit to a recruitment mindset.
Internal Case Load Recruitment
While many physician owners perceive that the simple solution is to look externally for growth, the truth is that most outpatient surgery centers have opportunities to drive growth internally. Impactful internal case load recruitment starts with creating an environment that makes it easy to capture every one of the partners' cases that is appropriate for the outpatient environment.
Evaluation
One of the first steps is to understand where the deficiencies are presenting — specifically, who is and who is not delivering eligible cases and what the barriers are to bringing the appropriate cases. With some operational tweaks and education, most surgery centers can add cases from current partners.
You need to first understand the barriers preventing you from achieving your goal. To do this, you should ask each physician the question: "What can we do differently that will make you more comfortable in bringing all your appropriate cases to the center?"
The responses are typically the same for most ASCs, and, when addressed, could help you reduce barriers to underutilization and improvement. Commonly-cited reasons why physicians are reluctant to bring ASC qualified cases to surgery centers include:
• Preferences with equipment or instruments not available at the ASC
• Investments in another facility or a treatment suite at their office
• Hospital politics/pressures
• Confusion about third party payor contracts: out-of-network vs. in-network
• Confusion with the facility cost for cash pay patients
• Scheduling/block time non-compliance
• Lack of adherence to start times
• Lack of familiarity/comfort with ASC staff
• Lack of transparency – both financially and with executive decisions
• Lack of partner enthusiasm/partner frustration
Internal recruitment strategies and operational efficiencies can counter most of these misgivings.
Your center must address and correct what can be corrected because going forward, operational inefficiencies will strongly affect recruitment and retention of cases and recruiting new doctors/partners.
The leadership's top priority is to remove as many barriers as possible, so that it is easy for the surgeons/physician to perform all of their qualified cases in this center. Once those barriers are removed, the leadership can then hold the center staff and physicians accountable for improving internal case load recruitment.
Recommendations
There are a number of strategies that most centers can start to execute immediately and on an on-going basis, which could motivate greater utilization (via increased internal case load recruitment) of the center:
1. Add an agenda line item to every board meeting asking, "What can we do differently that will make you more comfortable in bringing all your appropriate cases to the center?" Every board member will need to be prepared to answer that question, and the operational team must be prepared to find all possible solutions. It is a balance here: Some will not be solvable or will be implemented as revenue grows).
2. For physicians utilizing but not invested in the ASC, have ongoing discussions with them asking, "What could we do to help you increase your utilization of the center?" Encourage them to tell their colleagues about the center. These physicians' volumes can be a gift to the center, and they need to know that they are important and appreciated because they will tell people that tell people (the same goes if it is negative experience).
3. Create pro-formas that can quantify the financial benefits if each partner brings only a few more cases per month. Surgeon-owners must clearly see how the incremental volume growth of the right cases leads directly to higher margins.
4. Create a monthly case utilization index, volume projections and actual case volume reports for each physician to be used in board meetings as tools for transparency and case load capture.
5. Create a matrix and pro-forma that helps the physician and staff decide which cases are best for the outpatient surgery center.
6. Engage physicians' office staffs and educate them about the types of cases that are well suited to the center on an ongoing basis. It's critical that schedulers, who so often serve as gatekeepers, are involved in these discussions. Some physicians may not even realize the missed opportunity of scheduling ASC-appropriate cases elsewhere.
7. Host scheduler luncheons or happy hour at the ASC. This is an opportunity to build a relationship or a stronger relationship between the physician's and ASC staff. The physician's team will get to experience the center's qualities and learn more about the appropriate cases and payors, as well as feel a part of the surgery center. If there have been difficulties in the past it may be necessary to visit a surgeon's office, review past schedules to identify missed cases and educate the physician’s office as to why the case would have been suited for the ASC.
8. Conduct quarterly procedural audits. These can help ensure compliance with Safe Harbor regulations and can help all partners, their staff and the ASC learn which cases are eligible and appropriate cases for the ASC that are not being currently done in this ASC.
9. Evaluate each surgeon's block times — some surgeons may be able to bring more cases simply by making some favorable adjustments. Communicate the schedules to the physician's office often.
External Case Load Recruitment
The best outside recruitment efforts start with a commitment and are guided by a "sales" mindset by everyone involved. Recruiting surgeons that will invest in your ASC and increase its profits can't be a hobby that you think about only every once in a while. Instead, it must be a focused and coordinated ongoing process with someone that is accountable for its outcome.
Unfortunately, what sometimes happens instead is that physician-owners look at physician recruitment as a one-time "event," which can later be forgotten about during the center's day-to-day operation. The most successful surgery centers understand and make the recruitment an ongoing process. For some centers, this will be a paradigm shift and one that they will need to make. The market is changing, and those centers that do not adapt will not survive.
Successful recruitment campaigns are as important, if not more important, to the success of your ASC as strong payor contracts and business best practices. The most successful centers always have a core group of highly motivated physician-owners who recognize the value of ongoing recruitment and have effective strategies for growing the business.
Remember that each additional dollar of revenue can add up to between $.65 and $0.80 of profit to the bottom line once an ASC achieves breakeven financial status. Each partner needs to keep that in mind when considering how physician recruitment results in increased patient volume and profitability. Their ultimate conclusion will be that case load recruiting is a highly profitable investment of their time.
One of the greatest assets in recruiting new physicians is the mindset and commitment of the current physician base. This support can take form in a variety of ways, including speaking with new recruits, giving tours, attending new recruit open houses, going on physician visits, attending recruitment dinners, making phones calls, and/or agreeing to be part of a letter-writing campaign. You should appoint someone that will be responsible for planning and executing the recruitment of new physicians, but they cannot do it alone and will need the commitment of the physicians as well.
Strategy
You should have a two-avenue approach to this process. 1) Work with existing partners and physicians that utilize the center to develop an ongoing target list, gleaned from their knowledge of available physicians (or knowledge of physicians that will know who should be on your radar), and 2) Create a mass list of all the potential physicians and surgeons that are seeing patients in the center's market area. You should market all identified physicians through the avenues discussed above.
The role of current individual owners will depend on their personalities and comfort level, but nonetheless, all owners should accept — as part of their ownership mindset — the responsibility to be part of the recruitment process. The role can range from sharing names of potential new recruits to being the champion recruiter.
All owners should be walking billboards for the center to their practice partners and other colleagues, as well as be keeping an eye out for surgeons who could become future owners or who could bring cases to the center now. It's very important that the owners have a compelling "elevator pitch" that briefly highlights the center's unique benefits and conveys its message. Owners will be able to use this speech at medical meetings, continuing education courses, or even in the lunch line at the hospital.
Physician-partners should introduce themselves to physicians that are new to the area on a regular basis. The partners should tell these prospective investors and partners about the surgery center, noting that there could be an opportunity for them to utilize and invest in the ASC. They can encourage the new-to-the-area physician to talk with current physician-owners of the center. Physicians can quickly create an open door to recruits just by picking up the phone and introducing themselves.
Recruitment of new physicians should be an agenda item on every board meeting. During discussion on this item, physicians should identify which physicians the ASC should be reaching out to. Ask physician-owners to come prepared to put forth a few names of physicians and a little background (if known) so that that physician can be pursued. Part of the ASC's plan should be to have a continually updated target list of physicians in the community that should be contacted and a list of physicians coming into the community for future consideration.
The success of the outpatient surgery centers requires a total "all hands on deck" approach. Complacency and the wrong mindset is a major contributor of the under performance of the surgery center, and the center's top priority is to ensure that the partners and providers are always engaged. Therefore, you can present this strategy for increased internal case load recruitment, as well as more active and on-going external case load recruitment, as an exciting chance to grow the benefits for all the center's owners.
Blayne Rush is the president of Ambulatory Alliances (www.AmbulatoryAlliances.com) and is a SEC Registered and FINRA Licensed Investment Banker. He specializes in ASC Brokerage; physician recruitment and syndications; and access to the capital markets and capital structuring consulting for surgery and radiation oncology centers. He can be reach though the Ambulatory Alliances web site or by calling (469) 385-7792.
Related Articles on ASC Turnarounds:
8 Characteristics of Highly Successful Surgery Centers
10 Metrics That Reveal a Surgery Center's Financial Performance
11 Current Issues Facing Surgery Centers -- 2012