Accreditation

Network and know your community when starting your own ambulatory center

Accreditation Connection, March 24, 2003

Setting up your own ambulatory surgery center (ASC) seems like a daunting task. But it's not impossible if you do some homework beforehand.

Sarah Wainscott and Dowtin Martin, the administrative director and vice president of Solus Management Services, Inc., started four ASCs-two multispecialty facilities, a urology center, and a center for pediatric patients-over the past decade in the Memphis, TN, area.

Partnering with colleagues
The two most important concepts involved with planning a new ASC entail researching your community and networking with peers, Wainscott and Martin say. For starters, have you heard physicians in your area talking about starting an ASC? Those conversations can be the start of big plans.

Once you establish an agreement to go it alone with your peers-whether it be two orthopedic surgeons who are burnt out from the hospital system or a group of family practitioners who want to leave a hospital-owned clinic-take a look at your community, Wainscott says.

"We were approached by several physicians interested in starting a surgery center for pediatrics, and at the time there was nothing in the eastern side of the city with that focus," explains Martin.

This kind of scenario is the best of all, since a pediatric office meets an area need.

Taking stock of your community
While researching the need for a new ASC, start by finding answers to the following questions:

  • Is your community large enough to support a new center? If you live in a small or isolated community, think about your patient population.
  • Is there a need for a center? If your local hospitals don't perform a sufficient number of outpatient surgeries or are generally underused, an ASC probably wouldn't be viable in your community. However, if you live in a community where hospitals are burdened by outpatient surgeries, then an ASC might be a good idea.
  • Do you have the cooperation of your local hospital system? If local hospitals are underused, they may not support you.
  • Are you going to establish an independent surgery center or one that's affiliated with a local hospital? Remember, if you're not working with a local hospital, you'll still need to negotiate contracts with insurance carriers. In some communities, hospitals have exclusive rights to these contracts. Without hospital support, your surgery center may not be able to serve enough patients to be financially viable.
  • Can you say that you won't duplicate the kinds of services found elsewhere in your community?

    Examine hospital services
    Next, look at the case mix at your local hospitals and read up on reimbursement rates. This is the delicate equation that will ultimately determine whether your ASC succeeds. Configure the ideal surgeon mix needed for your facility, be it multi- or single-specialty.

    For a multispecialty ASC-You'll need a large number of surgeries in areas with the highest reimbursement levels and the lowest supply costs to succeed financially. Otherwise, the costs of outpatient surgery could far surpass the amounts you're reimbursed from insurers, patients, and federal programs.

    After Wainscott and Martin determine these areas, they report to their physician investors and collect information from them, including each physician's
  • typical patient volume
  • payer mix
  • types of cases

    "This enables us to see the number of cases and reimbursement we could project," says Wainscott. "Based on this information, we determined the number of rooms to open with."
    For a single-specialty ASC-Make sure you have enough physicians, each with high surgery volumes, especially if the specialty has a lower level of reimbursement, says Wainscott. A single-specialty ASC won't work financially if your physicians perform less common surgeries, or if the accompanying levels of reimbursement are low.

    Planning equipment needs
    Before hiring a building contractor, talk and meet with physicians interested in working at the new ASC to determine the center's needs. Wainscott and Martin start by forming a committee-comprised of themselves and the potential physicians-to sift through the complicated financial issues that a new center faces, as well as outlining equipment and instrument needs with the physician committees.

    This way, the physicians help to create an appropriate and personalized environment in which to work. The committee talks about the ASC's budget, how to communicate with vendors, and purchase equipment.

    After discussing the types of equipment needed and how to get them at the best price, the committee contacts local equipment suppliers, who show them how the equipment works. The committee then votes on what to purchase, based on what makes the most financial and clinical sense.

    Staffing and policies
    Building a center goes beyond equipment. You must also consider other issues that include hiring administrative and clinical help. Thus, a second committee, called the medical executive committee, deals with these other issues that include the following:
  • Finding an experienced, well-trained staff with quality credentials
  • Developing policies and procedures
  • Developing the center's bylaws
  • Analyzing issues directly related to treatment, such as drug utilization
  • Deciding whether to pursue accreditation or rely on state licensing/Medicare certification

    Do you have what it takes?
    Can you handle your own ASC? The answer probably lies in your training. While Wainscott and Martin spent years working for hospitals, they also knew about the marketing and management skills needed to run a successful ASC.

    "You learn very quickly about fast turnovers and cost containment," Wainscott says. "I knew how to run an ASC by the time I was in that role."

    Martin worked as a radiology and cardiology department manager at LeBonheur Children's Medical Center in Memphis before becoming the administrator of its ambulatory division.

    Wainscott worked as a surgical nurse, a nurse manager, and an administrative director in both outpatient and hospital settings, including two small community hospitals. In these settings, low patient populations can create pressure to reach and keep customers on a limited budget. ASCs, with their narrow focus, can create the same type of environment. The balance of high-pressure administrative and clinical training made all the difference.

    From the March 2003 issue of Briefings on Ambulatory Accreditation

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