10 Steps to Take to Add Spine to an Existing Orthopedic Surgery Center

As many spine procedures become feasible on an outpatient basis, they are quickly moving from the hospital to the ASC. Chris Bishop, senior vice president for acquisitions and business development at Blue Chip Surgical Center Partners, provides 10 steps for ASCs to take to add spine to an existing orthopedic surgery center.


1. Identify available spine surgeons. To identify spine surgeons who might join your ASC, ask your orthopedic surgeons to make recommendations. They are probably not committed to an ASC yet, since so few spine surgeons have joined ASCs. Therefore, both sides will have to get acquainted with each other. To make sure the spine surgeons really do have the cases they think they have, the ASC needs to undertake a thorough review of their clinical practices. Reviewers should check the volume of spine cases going back 12 months. One way to determine whether spine surgeons would fit well into an ASC is to see if they are discharging patients from the hospital on the same day as surgery.


2. Ask surgeons to identify cases for ASC. Sit down with the spine surgeons and ask them to identify which cases they would do on an outpatient basis. The three predominant types of spine cases done in the ASC are laminectomies, discectomies and anterior cervical disc fusion. However, a spine surgeon would still want to do a laminectomy on an obese patient in the hospital. One goal of the personal interview is to make sure the spine surgeon is truly comfortable with the concept of outpatient spine. If the spine surgeon is not comfortable, it may just be a matter of changing protocols. The ASC can put the surgeon in touch with a spine surgery colleague already working in an ASC. This surgeon can suggest ASC-based protocols.


3. Make initial financial assessment. When spine surgeons are interested in joining your ASC, ask how many how many cases they think would bring in. The rule of thumb is 75 cases per surgeon per year. That may seem low, but an ASC does not need a high volume of spine cases to make money. It can produce a high profit margin. The typical spine case in an ASC is reimbursed at $4,500 per case, compared with $1,500 for a typical orthopedic case. The rate of 75 spine cases a year means four spine surgeons can perform 300 spine cases, resulting in a profit margin increase of 6-plus percent.


4. Buy necessary equipment. An orthopedic center will have much of the equipment a spine surgeon needs, such as a C-arm, but many spine surgeons insist on a microscope, which would cost around $100,000. Other spine surgery equipment, including various hand instruments retractors, could cost another $100,000.


5. Would anesthesiologists be comfortable with spine surgery? Find out whether the ASC's anesthesiologists would be comfortable with spine. If an anesthesiologist objects to spine, the ASC could bring in another anesthesiologist to work on specified "spine days."


6. Make sure surgeons can get morning slots. Spine surgeons should have access to the preferred slots at the beginning of the day because their patients need more time to recover than orthopedic patients. Recovery time can last 2-5 hours.


7. Consider payor mix. For example, spine surgeons who have many Medicare patients over at the hospital won't be able to bring them over to the ASC because Medicare won't pay for outpatient procedures. Also, the ASC's existing private payor contracts probably do not specify spine surgery, so it would have to be added.


8. Work with private payors. Sometimes the payor is unfamiliar with spine surgery in an ASC and needs to be convinced the procedures can be performed in an outpatient setting. The ASC can provide charge data showing the cost of spine surgery at an ASC is 30-60 percent below that of a hospital. It can arrange to get the payor in touch with sister companies in other states that already cover outpatient spine. Medical directors at payors often require convincing and your prospective spine partners can generally do the best job of explaining the clinical benefits. Offer the payor a price you can live with. Make sure all the costs are included in the price quoted to the payor. The cost of an implant, for example, can vary substantially. An ACDF implant system can range from $1,200 to $4,000 and you have to ensure your reimbursement covers overhead, supplies and implants.


9. Review cost of cases. The ASC should track cases to understand if it is making or losing money on each one. It's important to understand which cases are appropriately paid by managed care. A case can lose money because of the reimbursement level, supply costs or the speed of the surgeon. Speed is important because the average case costs $18 per minute of OR time. Match the reimbursement per case to determine the net profit per case and sort by payor. This should be done monthly, allowing your surgeons to determine appropriate cases for the ASC.


10. Present feedback to the board. Case-cost information should be presented to the ASC board regularly. Identify opportunities to standardize devices or enhance best practices. Provide physician-specific data showing slow surgeons. If the ASC loses money on a particular case, the case may need to be moved to the hospital, where it will be paid at a higher rate.

 

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