6 Tips for Establishing Your Orthopedic Surgery Center

Practice Management

Here are six business tips for establishing your 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. Play the field when financing the ASC. Don't rely on your current bank alone, says Shannon Stocker, MD, managing director of HealthCare Group. One of the most critical errors borrowers make is that they become too comfortable with their current banker. People want to believe that their bank will give them the best deal. In today's lending environment, the only way to find the bank with the most competitive offer at that moment in time is to test them all. Since the 2008 credit crisis, banks' underwriting guidelines have grown much more stringent and potential borrowers go through multiple levels of credit approvals. No matter how good your relationship is with your bank, the banker doesn't have the final say on the rate and terms offered.

3. Leave room during facility construction for additional services. One of the biggest trends in orthopedic practices is creating a one-stop-shop for care where patients are able to receive all their services at a single practice location. Paul Trigger, senior vice president of BBL Medical Facilities, recommends that practices constructing new surgery centers create space for physical therapy services, even if the practice doesn't currently employ a physical therapist. In addition to physical therapy services, the practice should consider additional room for rheumatology and orthotics, depending on the patient population and practice focus. "Physical therapy is very big in orthopedics," says Mr. Trigger. "Practices should plan to create an environment where tenants come in and have a real bone and joint center."

Another option is to create two separate facilities connected through indoor walkways. One physician group that collaborated with BBL constructed a six-OR ASC connected through a walkway to the clinic building. "The physicians can see patient in the clinic, do outpatient surgery in the ASC and offer physical therapy at the same location," says Mr. Trigger.

4. Design the building for optimum work efficiency. Before constructing the new location, Slocum Orthopaedics in Eugene, Ore., owned two buildings and every physician had an office apart from the patient and operating rooms, which meant travel time between one place and another. Several staff members also had office space. In the new facility, Slocum constructed open office plans, which means there is one room where all the cubicles are arranged to face the sunlight from the windows. "They made changes in the way they work in order to make it more equitable for the staff," says Whitney Churchill, design manager with The Neenan Company.

The medical module area was also conceived with a patient-centric mindset, says Miguel Burbano de Lara, vice president of healthcare operations at The Neenan Company. The nurse's work area is located near the physicians to optimize communication.

5. Pay attention to expenses. Evelyn Miller, vice president of development for United Surgical Partners International says one of the primary reasons Physician-owned ASCs fail is inattention to the center's expenses. She says every supply, staffing decision and piece of equipment has an effect on the ASC's bottom line, and owners who only pay attention to big item expenses may find themselves in financial trouble.

Ms. Miller says expenses are one of the first things a management company looks at when acquiring a physician-owned center, and frequently the company finds the ASC is losing money simply through lack of oversight. "We analyze repairs and maintenance, landscaping, housekeeping, every single expense," she says. "Generally we find that staffing, scheduling and drugs and medical supplies are [areas where ASCs lose money]."

"You have to be looking at your supplies per case and your staffing per case and monitoring the pulse of your ASC 24/7," she says. "An experienced administrator will do that naturally because they have the experience to know that those expenses are important."

6. Reach out to primary care physicians. Patients who are unfamiliar with orthopedic and sports medicine practices often visit their primary care physician after an injury. However, some primary care physicians are not experienced in reading x-rays from orthopedic injuries or providing treatment, such as casting. Practices should form relationships with primary care physicians by offering to give x-rays a second look and discuss patient diagnosis and treatment plans, says Angie Van Utrecht, director of operations at Orthopedic Specialists in Davenport, Iowa. If a primary care physician is familiar with your practice physicians, he or she will be more comfortable referring patients to the new practice.

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