Part 2: How Your Business Model Impacts the Process

In Part 1 of Navigating the Path to Surgeon-Centric Surgery Centers we discussed the most important design factors for Ambulatory Surgical Centers (ASC) and Office Based Surgical Suites (OBS).

Here, we compare the business-critical aspects impacting an ABS versus an OBS model to help determine which facility type will meet your business goals.

Determining Whether a Surgery Center Makes Sense For You

The following factors help determine whether a surgery center is the right strategy for your healthcare facility:

• Can your business model and staff ensure a high success rate of surgeries?
• Is there demand at your intended location for the procedures you offer?
• Are you equipped to make changes that are regulation compliant for your facility type?
• Is there an opportunity to expand to a multi-specialty center to improve sustainability?

Determining Your Service Lines

A surgery center offers the opportunity to expand and improve your service lines. For example, investing in the latest surgical equipment can introduce minimally invasive techniques to increase efficiency and reduce recovery times. You should also explore emerging healthcare trends that improve patient care and efficiency such as introducing telemedicine at non-procedural stages of your process or considering the types of outpatient procedures that are less costly. Syndication and partnering with surgeons specializing in procedures projected to grow in demand are also excellent examples of growth opportunities.

Syndication

When considering syndication, partnering with experienced surgeons with enough volume to optimize OR use will improve profitability. Seek partners who share common values, business goals and approaches to care to avoid time consuming buy outs.

The syndication process requires:

• Legally drawn up organizational documents and operating agreements
• Solid non-compete clauses
• Buy out definitions
• Clear management structure
• A process to bring in new members without the need for re-syndication

Singular vs multi-specialty

Multi-specialty models are less risky, helping to balance profitability and productivity when any one area experiences downward pressure. Although the singular model reduces upfront costs, it’s essential to weigh the costs of future expansion against the initial costs of opening a multi-specialty facility now including:

• Moving to a larger facility and/or renovations
• Staff expansion to accommodate higher volume
• Legal costs of syndication to increase your selection of procedures
• Finding surgeons to provide additional services

State licensed ASC vs. Accredited OBS

Your facility type is impacted by the following funding mechanisms, accreditation bodies, and timelines:

Payor mix

The payor mix you choose will impact your cash flow, profitability, and administrative burden.

Medicare and Medicaid:

• Contracts have pre-determined prices based on the types of procedures and services you provide
• Complicated administrative processes
• Risk with payment denial if you do not follow rules and conditions
• An ACS is entitled to facility fees whereas an OBS is not

Cash/self-pay:

• Commercial contracts are negotiable which can improve profitability
• You can adjust self-pay pricing based on increasing costs and patient income
• If you’re specialty is not eligible for facility fees such as plastic surgery, it makes more sense to go the OBS route

Licensure and accreditation

Most states require all facilities offering anesthesia beyond level 1 to be accredited by one of the following organizations:

• Accreditation Association for Ambulatory Health Care (AAAHC)
• Accreditation Commission for Health Care (ACHC)
• The Joint Commission
• QUAD A (excellent for pre-inspections to catch issues early)

While an OBS operates under a physician license, an ASC requires additional licensing that requires a complex inspection process.

Timelines

An OBS can be licensed and operating within 30 days, while an ASC’s licensing is more complex. As a result, an ASC can prolong timelines by six months or longer.

Choosing the right business model and service lines will help you create a sustainable surgeon-centric surgery center to achieve your long-term business objectives.

Embrace innovative healthcare facility designs with Apex.

Your surgical center requires patient-centric design and planning to improve ROI. Apex Design Build creates expandable, adaptable designs for longevity and ongoing cost-effectiveness for both ASC and OBS projects. Reach out to Apex to discuss your surgical center design and build project.