At the 18th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 28, Brandon Frazier, vice president of development and acquisition of the Ambulatory Surgery Centers of America, and Allan Fine, senior vice president and chief strategy and operations officer at the New York Eye and Ear Infirmary, discussed the pros and cons of a joint-venture as well as the markers of success.
Mr. Fine’s center, which has 17 operating rooms and does 130,000 procedures a year, views joint-ventures as an offensive strategy in its effort to grow and expand its market share. A joint-venture is also a way to aggressively recruit other physicians in the market who may not otherwise be on its medical staff.
Mr. Frazier outline the pros for a joint-venture:
1. Increase in volume
2. Market share growth
3. Exchanged surgeon relationships
4. Revenue
5. Offensive strategy
6. Physician recruitment and retention
7. Improved patient satisfaction
8. Brand development
Mr. Fine outlined the cons for a joint venture:
1. Cannibalization
2. Threat to hospital ambulatory business
3. Concern over ASC profitability
4. Loss of control
5. Fear of failure from lack of ASC experience
The challenges, Mr. Fine said, are not “insurmountable by any stretch of the imagination.” He said an ASC needs to calculate the amount of business that may leave as a result of a joint-venture as well as the amount of business that would be increased by a joint-venture.
“It’s the equivalent of playing chess,” he said. “Try to think a couple of moves ahead.”
Mr. Fine outlined the measurements of a successful joint-venture:
1. Number of surgeons from competing hospitals and other ASCs
2. Ability to decant cases from the hospital that are better suited for an ASC
3. Ability to backfill with higher acuity and or profitable cases
4. Increased number of inpatient cases from ASC partners
5. Revenue
Mr. Frazier said the ASCOA encourages its physicians to oversee the ASC. It also distributes checks based on profits after looking at metrics such as cost per case, supply cost per physician and even delay time due to physicians.
“At $18 a minute [for an OR], there’s a significant cost for that.”
Related Articles on Joint-Ventures:
How to Fix a Troubled Hospital-Physician ASC Joint Venture
4 Questions to Ask Hospital Leaders Before Entering Into a Joint Venture
Physician-Owned Surgery Center Seeks Strong Hospital Partner: 7 Factors to Consider Before Pursuing a Joint Venture
Mr. Fine’s center, which has 17 operating rooms and does 130,000 procedures a year, views joint-ventures as an offensive strategy in its effort to grow and expand its market share. A joint-venture is also a way to aggressively recruit other physicians in the market who may not otherwise be on its medical staff.
Mr. Frazier outline the pros for a joint-venture:
1. Increase in volume
2. Market share growth
3. Exchanged surgeon relationships
4. Revenue
5. Offensive strategy
6. Physician recruitment and retention
7. Improved patient satisfaction
8. Brand development
Mr. Fine outlined the cons for a joint venture:
1. Cannibalization
2. Threat to hospital ambulatory business
3. Concern over ASC profitability
4. Loss of control
5. Fear of failure from lack of ASC experience
The challenges, Mr. Fine said, are not “insurmountable by any stretch of the imagination.” He said an ASC needs to calculate the amount of business that may leave as a result of a joint-venture as well as the amount of business that would be increased by a joint-venture.
“It’s the equivalent of playing chess,” he said. “Try to think a couple of moves ahead.”
Mr. Fine outlined the measurements of a successful joint-venture:
1. Number of surgeons from competing hospitals and other ASCs
2. Ability to decant cases from the hospital that are better suited for an ASC
3. Ability to backfill with higher acuity and or profitable cases
4. Increased number of inpatient cases from ASC partners
5. Revenue
Mr. Frazier said the ASCOA encourages its physicians to oversee the ASC. It also distributes checks based on profits after looking at metrics such as cost per case, supply cost per physician and even delay time due to physicians.
“At $18 a minute [for an OR], there’s a significant cost for that.”
Related Articles on Joint-Ventures:
How to Fix a Troubled Hospital-Physician ASC Joint Venture
4 Questions to Ask Hospital Leaders Before Entering Into a Joint Venture
Physician-Owned Surgery Center Seeks Strong Hospital Partner: 7 Factors to Consider Before Pursuing a Joint Venture