Q: GI has been hard hit by declining reimbursements, especially in the ASC setting, in the last few years. What have been some of the major challenges?
Brien Fausone: Yes, GI ASCs have been hard hit with declining reimbursement and coupled with the new Medicare Infection control guidelines and a down economy, the cost of care has increased with a resultant decrease in ASC margins.
Q: Could you describe one or two successful ways that your ASC was able to reduce costs to address this decrease in margins?
BF: We are very aware that our business has shifted in the past two years. In the Detroit marketplace, we are still very much in a recession with unemployment hovering around 14 percent. Our self pay has increased by 10 percent in one year at the expense of traditional insurance plans. To address these concerns, we have done the following:
- Renegotiated all our vendor contracts;
- Renegotiated with our landlord a new 10-year lease schedule (several years early) that reflects current market rates;
- Established a minimum number of cases in block time required to open the block; and
- Placed a freeze on capital expenditures for 2010.
Q: Recent reports have also indicated that there could be a shortage in GI physicians over the next few years. How has your center addressed recruiting and brought in new physicians/cases to the center?
BF: We have added one GI physician partner in 2009 and anticipate one new GI physician and one new colorectal surgeon to begin using the center in 2010. The addition of new physicians to our partnered physician practices is a reflection of their “best in class” perception in our market.
Q: What advice do you have for single-specialty ASCs that may be intimidated by reimbursement/regulatory issues?
BF: Single-specialty ASCs can be vulnerable and need to have a handle on their cost structure. Matching costs to current volume is critical. The margins are still attractive albeit not what they were a few years ago.
Learn more about Michigan Endoscopy Center.
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.