5 Key Elements for Establishing an Orthopedic Surgery Center.
Here are five key elements to have in place before establishing an orthopedic surgery center.
1. Ensure case volume first. Case volume is critical to the success of any center, and Lori Ramirez, president and CEO of Elite Surgical Affiliates says physicians often overestimate how much volume they can bring to a center. "All too often, physicians and administrators will overestimate the number of cases a physician can bring to a center and therefore build an operating room that stays empty most of the time," she says.
She says a new ASC should estimate around 100 cases per OR per month, meaning a center that schedules 200 cases per month will need two ORs. "Whatever the physician tells us [he or she can bring], we plan for half that amount," she says.
2. Establish good financial relationships. It's important for physicians to establish good financial relationships with banks to receive initial loans. "Some people have to learn the hard way through trial and error," says Pedro Vergne-Marini, MD, managing member of Physicians Capital Investments. "Others bring in quality people, such as executive directors or accountants, who can track finances." For younger physicians partnering to invest in a surgery center, it makes more sense to purchase the property instead of leasing. This is a relatively safe way to increase your net worth and to compliment a retirement plan. "When it is a physician occupied building, you can get some pretty decent loans from small businesses and the bank," he says. "When you own the building, your property will have value. You are paying with pretax dollars and doing something for protection at the same time. You can also depreciate the building so you get an additional tax benefit by doing so."
3. Keep the facility small in the beginning. It can be advantageous for new facilities to stay small in size at the outset, says . Eric D. Friedlander, CEO of Starpoint Health. "If you've run all of the models and have all of the doctors together, and believe you're going to need two ORs full-time, don't go build four ORs," Mr. Friedlander says. "Try to have the option in your building to expand into the suite next door to build out a third OR when it makes sense. We've deliberately choked our growth a little bit so we don't overbuild."
If it isn't too cost-prohibitive to build a third or fourth OR in such a scenario, he says ASCs can do so but should just avoid fitting the room with equipment until it is absolutely necessary. "Also, you don't need to buy new equipment," he says. "There's plenty of good second generation equipment out there you can get for one-third of the cost of new equipment."
4. Choose a building firm experienced in ASCs. The architect and builder you choose should not simply have "medical" experience, such as designing medical offices, but should have direct experience with ASCs. Surgery centers are much more complicated, with gas outlets, air pressure systems for ORs and extensive safety requirements. "This is the one step that can save you the most money in your project," Ms. McMenemy says. "If your project is not designed to meet specific regulations, you may be knocking down a wall to find space for an additional room."
Having a good relationship is important, but don't choose the architect or builder who helped you build your home. It sounds obvious but some physician-owners have actually done that, Ms. McMenemy says. In addition to the risk of big mistakes, these people may charge more because they have to read up on everything. "Always use someone who has experience in ASC design and who knows your state’s regulations and the Medicare guidelines," she says.
5. Include physicians in instrumentation and equipment decisions. Rather than replicate inefficient, heavy, and expensive instrument trays from an existing facility to your new ASC, work with doctors and/or nurses to achieve a streamlined instrument sets which serve the needs of the staff while removing any unnecessary equipment. The result is savings on the initial purchase as well as ongoing savings on instrument processing and maintenance. There seems to be a misconception that physicians are too busy to assist in the development of practical instrument sets. "My experience has been the contrary; most of our end user customers understand every minute spent performing instrument set audits on the front end of a project saves 10 minutes of delays on the back end," says Brian Reed, National Strategic Business Development Manager of Aesculap, a B. Braun company. He suggests staging incremental orders based on a projected ramp up in the OR schedule and procedure volume.
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