Benefits & Challenges of Investing in Office-Based Procedures: Q&A With Drs. Cory Lessner and Andrew Shatz
Q: What are the advantages for surgeons investing in surgery centers or having office-based procedure capabilities?
Dr. Cory Lessner: One of the big advantages is being able to control and improve the surgical process. Multispecialty centers may perform a lot of different procedures well, but they aren't likely to excel at any one particular type; we are able to be great at one thing because the surgeons and staff only perform eye surgery and so are able to focus on a limited number of procedure types. In addition, because of our focus, we would be more inclined to purchase the best and most advanced equipment available. If a surgeon wants a multi-specialty ASC center to purchase a laser cataract machine, like the new LenSx from Alcon, it might not be in the ASC's budget or they might have to wait in line as a lower priority item behind a less-expensive device requested by a surgeon from a different specialty. By focusing on a single specialty and a limited number of procedure types, we are able to control all aspects of the service we deliver, allowing us to acquire the best technology available. We believe that this should translate into a significant benefit for patients.
Q: For surgeons, how does investment in the office-based center impact their practice?
Dr. Andrew Shatz: Although there is a large initial capital layout to build an office-based surgery center, in the long run there are increased efficiencies that should result in cost savings: a surgeon who stays in the same office for surgery and clinic is far more productive than one who must travel between an office and surgery center. When you perform office-based procedures, you have the advantage of having personally chosen and trained everyone on your team, allowing everyone to work together as a fine-tuned instrument. It is also my experience that this set-up fosters a more relaxing and calming environment for patients when the surgical team is comprised of the same staff that helped evaluate them during their initial visit to the clinic.
CL: In ASCs, unless the surgeons are owners of the center, staff members aren’t employees of the surgeons and therefore aren't beholden to them. Because of this, staff might be more inclined to conduct themselves in a manner that might otherwise not be considered acceptable by their employer.
AS: Additionally, as reimbursement continues to drop, efficient surgeons who invest in office-based surgery centers will be better able to offset their revenue loss. In order to do so, however, the physician owner needs to be able to evaluate the cost per case daily; this is something that is more difficult to accomplish in a large multi-specialty surgery center.
Q: What factors should surgeons consider before investing in an ASC or office-based procedure capabilities?
CL: There are significant costs to building an office-based center which if done properly will range from $160 to $180/sq ft: Building out an ASC will currently run north of $300/sq.ft. The recovery of these costs has to be realized over the normal life of the practice. Although one will want their center to be appealing to patients, it is critical to watch the budget carefully to avoid over-extending.
Our office-based surgery center is state licensed and certified by the Accreditation Association of Ambulatory Health Care (AAAHC). We are not considered a Medicare ASC because our OR suite sizes are under 400 sq. ft., our building lacks a covered egress and our elevator does not meet with Medicare's weight capacity and dimension criterion. We have a typical doctor's office with exam and testing rooms on one side; the surgery center is separated by a fire door and has two operating rooms and five pre-op/post-op bays. When a patient enters this side of the office, there is no mistaking it for anything other than a surgery center. We have a full compliment of surgical staff, including two RNs, three technicians and an anesthesiologist on surgery days. Despite our credentials and strict adherence to state guidelines, third party payors have taken the stance that they will not reimburse a doctor's office for the facility portion of cataract and lens procedures.
Considering the direction the American medical system is supposed to be heading — less expensive, more efficient delivery of healthcare – we should not be penalized for taking the lead in implementing these changes. Yet this is what has been happening to date; we have had to jump through a lot of hoops in order to get our center operational and recognized by third-party payors. We are making definite progress, but there are still challenges.
Q: What has been the most difficult challenge facing the office-based procedures model?
CL: Our biggest challenge is to be relevant to the third party payors. In a perfect world, consumers want the best service and the best quality for the lowest price. In my experience, one can never have all three; something has to be sacrificed. But by changing the paradigm – by performing intraocular procedures in a different setting with the same stringent safeguards one would find in an ASC we are now actually able to accomplish all three. We believe that we are providing quality services that are every bit as good as and perhaps better than one would receive at an existing ASC.
We have to be fairly reimbursed for the services we provide because there are fixed and variable costs incurred in running the surgical side of the center. We have staffing, rent, loans, and material costs just like other surgery centers and we need to cover them in order to stay in business. If our center is unable to get reimbursed for the service provided, we will be forced to bring those covered lives to the local ASCs and insurance companies will end up paying that facility more for the same procedures.
We knew going into this project that it would probably take time for the third party payors to understand what we were offering to their enrollees and reimburse us for the care we were delivering but we are seeing a movement in that direction. The cost saving we are currently generating are just at the tip of the iceberg. As our volume grows there should be significant savings.
AS: People understand that the concepts of better patient care and cost effectiveness are not mutually exclusive – up to a point. An office-based surgery center can provide the highest quality of patient care at a reduced cost due to decreased administration size and tighter overhead control. As a new center, our volumes are growing, but not to a degree that would save insurance companies more than a few thousand dollars per year. But that should make us attractive as a test center. As our practice picks up steam and more insurance companies come onboard, it will likely appeal to other surgeons to follow suit and take a greater degree of control of the healthcare environment.
In our situation, insurance companies might only save a couple hundred dollars per case for an office-based cataract procedure, but with over 3 million cataract surgeries performed in the United States annually, it will save the healthcare industry and patients millions of dollars per year by shifting these cases to the surgeon's office.
Q: Where do you see the practice heading in the future?
CL: We want to be the poster children for office-based surgery centers. Other people are interested in seeing what we've done and whether it will be a good way to go
AS: The future is bright. I think more surgeons who are starting out will find office-based centers more appealing than those that are corporately owned. The surgeon's office has to pay for all the equipment, staffing and startup costs, but there is the advantage of not having to compete with physicians from other specialties on equipment purchases and to have a better handle on the patient experience. To make money in the healthcare field is to have each surgeon take more control over some of the dollars in healthcare.
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