As CMS continues adding cardiac procedures to the ASC covered procedures list, more cardiology groups are weighing whether to build centers of their own. For Gary Kirsh, MD, CEO of Nashville, Tenn.-based Cardiovascular Logistics, that decision starts long before a site is chosen or a pro forma is drafted.
Dr. Kirsh’s organization runs each potential project through a semi-quantitative ranking system, scoring it against seven or eight criteria to determine whether the opportunity is worth pursuing. The scores are not meant to make the decision on their own.
“It’s a little bit quantitative. A lot of it is a little bit intuitive too, but it’s just sort of a way to communicate the opportunities to stakeholders in the system,” Dr. Kirsh told Becker’s.
The first screen is regulatory. The ability to open an ASC varies by state, and some states, including New York, layer on regulatory requirements specific to cardiovascular work. Once the regulatory path is clear, the business case comes next, and Dr. Kirsh said it hinges on having a group of physicians who are committed “not financially, but emotionally” to the idea of working in an ASC.
Without that alignment, a new center can sit underused.
“One of the problems with ASCs is you don’t want to pursue the ‘if we build it, they will come’ strategy because if you build it and they don’t come, you will bleed money until they do come,” he said. “So some pre-work with alignment with physicians is a necessary condition.”
Market dynamics and the competitive landscape factor into the plan, along with payer feasibility. Medicare patients are one piece of the volume, but commercial eligibility drives much of the math.
“There are certain markets where, of course, you can do Medicare patients, but a lot of it is commercial patient eligibility,” Dr. Kirsh said. “Are the payers really on board with moving cardiovascular procedures from the hospital to the outpatient environment?”
Leaders also need to know whether payers will approve procedures in the outpatient setting and recognize carve-outs that make the shift from hospital to ASC economically feasible, he said. If those pieces line up, the work moves to a traditional pro forma: projected case volume, the number of rooms required, square footage, staffing and a capital vendor for fluoroscopy and other high-cost equipment.
The hire Dr. Kirsh considers most critical comes early. Groups need a leader who knows how to implement an ASC program, and that person’s salary belongs in the model from the start rather than being added once the center is close to opening.
“You have to bring them on board and build their cost into your model because they have to come on board and help you and really be a key person in that local market to help stand up the whole operation,” he said. “So to me, that’s the key person that you have to find.”
Front-line staffing is a separate challenge. ASCs compete with hospitals for the same nurses and technologists, often without matching their pay.
“It’s a competitive landscape and we tend to pay a bit less than hospitals, but it’s a quality of life decision for the staff,” Dr. Kirsh said.
Hospital catheterization labs run on a steady stream of emergencies, while ASCs offer a more elective environment with less call, predictable schedules and no nights or weekends. Dr. Kirsh said that trade-off tends to appeal to the most seasoned clinicians, which also helps with safety and experience.
“A lot of times the people with more experience are ready to sacrifice a couple bucks to get out of the rat race of the hospital because they’ve been doing that for a while,” he said.
On ownership, Cardiovascular Logistics generally prefers to build de novo centers using its own in-market expertise rather than partner with established ASC companies, though it does have some partnerships.
“All things being equal, we’d like to own the ASC ourselves. We have complete control over what we’re doing, how it’s built, the clinical, the financial,” Dr. Kirsh said.
Some markets call for a different structure. When keeping the relationship between a hospital and an independent practice stable requires it, Dr. Kirsh said his group is willing to enter a joint venture ASC with the hospital.
There is also more than one way into the business. A group can buy and convert an existing ASC, expand one, convert an office-based lab into an ASC or build from the ground up. The de novo route takes the longest, with regulatory approval, licensure and construction approval all in the timeline.
“It’s more complex than opening a new office with three exam rooms, but it’s certainly doable,” Dr. Kirsh said.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
