Beyond practicing as a physician, the single best financial opportunity for spine surgeons is opening a surgery center, according to a keynote panel discussion on June 16 at the Becker's 16th Annual Future of Spine + The Spine, Orthopedic and Pain Management-Driven ASC Conference in Chicago.
"That was our own story," said panelist Khawar Siddique, MD, CEO of Beverly Hills Spine Surgery in Los Angeles. He and his partners opened an ASC 14 years ago and haven't looked back. "At the end of the day, we decided you can't just depend on your own two hands."
However, opening a successful ASC requires some careful planning to avoid missteps and ensure the business remains stable, according to the discussion. Additional keynote panelists included:
- Laxmaiah Manchikanti, MD, board chairman and CEO of the American Society Of Interventional Pain Physicians and the Society of Interventional Pain Management Surgery Centers
- Vivek Mahendru, MD, founder and vice president of business development at Pain Specialists of America in Texas
- John Prunskis, MD, president and medical director of Elgin-based Illinois Pain Institute and medical director of Barrington (Ill.) Pain and Spine Institute
Here is their advice for running a successful ASC based on years of experience:
1. Incorporate pain management. Spine, orthopedics and pain management tend to work together well, according to Dr. Siddique, and pain management can really help pay the bills. Dr. Prunskis agreed. "For pain management, there are procedures that have become available in the last few years that were not there earlier that help patients, No. 1, and reimburse at a higher rate," he said.
2. Own your real estate. Dr. Mahendru advised physicians to invest in real estate for their ASC rather than leasing. "It is a great opportunity for physicians to own your own real estate," he said. "That's what I did." This is especially true if the group is able to buy a sizable lot or building. Dr. Siddique advised physicians to buy double the space you need for an ASC and rent out the remaining space to other physicians for medical offices. Dr. Manchikanti also agreed the investment was good in the long term. "There are risks, but there are also large benefits," Dr. Manchikanti said. "Bottom line: I recommend you own your real estate if at all you can."
3. "Trust and verify" your partners. Dr. Siddique recommends a two-step "trust and verify" process before going into business with another surgeon. The trust portion involves building trust on both sides of the partnership. Each partner needs to trust that the other has skin in the game and will make wise business decisions. Verification means making sure potential partners are a good fit. The best way to verify a partner is to have them come in and do a few cases at your center. "If they yell and scream in the OR or are mean to nurses or in a bad mood all the time, you won't want them in there," he said.
4. Make sure your partner contract is well structured. Dr. Prunskis advises ASC founders to find a good law group to structure contracts from the outset that ensure there is enough flexibility to terminate the partnership if it goes sour. "It's harder upfront to explain it to the co-investors," he said, "but from what I've heard, it's better to do it upfront than at the other end."
5. If you have to kick out a partner, buy them out. If a partnership isn't a fit, Dr. Siddique advises taking the path of least resistance: buying out partners with a fair price, even if they are minority owners. "Often you are far better suited giving them a nonadverse price, even if you have the right to get them out," he said. "It's cheaper to avoid litigation, which is costly and complicated."