4 Steps to Add Value to Established Joint Venture ASCs
The joint venture ambulatory surgery center model can be very successful. Three to five years after the partnership is established business is often booming, but what next?
1. Identify market strategies. Creating a sustainable growth plan is highly dependent on market factors. "Market competition shifts are coming faster and faster," said Mr. Zasa. Growth is needed to keep up. Regardless of the market, new physician investment is a reliable source of growth. Joint venture centers in its early years of success can draw in younger physicians with lower buy-in prices. Older ASCs are often accompanied by a larger number of older partners and significantly higher buy-in prices.
2. Add key physician specialties. New specialties or service lines allow an ASC to expand through additional case volume and the attraction of new physicians, but the selection of a new key specialty is a delicate process. "Look at your two to three strategies that will fit in your operating rooms and narrow it down to one," said Mr. Zasa. New specialties should be selected using the following criteria, according to Mr. Zasa.
• Contribution to growth
• Suitability of existing space
• Fit with overall strategic plan
• Fit with desired physicians
• Fit with the center's strengths
After determining which specialty makes sense, ASC joint ventures should:
• Develop a business plan
• Build a description of services
• Review the competition
• Review reimbursement and regulatory factors
• Identify key critical success factors
• Complete financial projections
Throughout the entire process, one person should champion the timeline for implementation and organization of the necessary people.
3. Examine narrow networks and new partnership opportunities. "New networks are being formed all over the country," said Mr. Zasa. From accountable care organizations to independent practice associations, ASC leaders have numerous opportunities to leverage narrow networks. Thus far, ASD Management has been cautious about entering into arrangements with ACOs. The rates offered tend to be lower than Medicare rates. Rather than work with ACOs directly, joint venture ASCs can work through their affiliated hospital or health system. "We allow ACOs to approach our centers through systems we associate with," said Mr. Zasa. "Then we try to negotiate favorable rates." Aside from ACOs, ASD centers have found success in working with workers' compensation groups and even primary care physician groups.
4. Offer enhanced services to ASC surgeons. An ASC's surgeons are its most valuable asset. ASD Management offers its centers' physicians value-added services, which serve as the "glue" holding them to their ASCs. For example, all ASD supplies are ordered through a group purchasing organization, but the management company has extended those rates to the physicians as well so they can order supplies for their practices at group rates. ASD also offers its surgeons accounting services, business office credit care, verification services, financial analytics, expense review, risk management, strategic planning and more.
Download the webinar presentation here.
View the webinar by clicking here. We suggest you download the video to your computer before viewing to ensure better quality. If you have problems viewing the video, which is in Windows Media Video format, you can use a program like VLC media player, free for download here.
Note: View archived webinars by clicking here.
More Articles on Strategic Planning:
The Importance of Physician Involvement in Shared Savings Programs
The Outpatient Payment Rate Debate: What Lower Reimbursement Would Mean for Hospitals
Making Costs Clear: How Hospitals Can Help Drive Price Transparency Tool Development
© Copyright ASC COMMUNICATIONS 2016. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.
To receive the latest hospital and health system business and legal news and analysis from Becker's Hospital Review, sign-up for the free Becker's Hospital Review E-weekly by clicking here.
- 2 legislative changes impacting ASCs — Oct. 21, 2016
- Anesthesia Business Consultants launches MACRA guidance platform: 3 notes
- IBD patients report high annual salary, educational attainment: 4 study insights
- Clinton, Trump talk Medicare plans during 3rd presidential debate — 6 highlights
- 38 ASC management & development companies to watch — 2017