6 Components of a Successful ASC Strategy

At the 18th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 28, President and Chief Development Officer of Meridian Surgical Partners Kenny Hancock, CEO of Surgery Partners Mike Doyle and Vice President of Development of Symbion Healthcare Danny Bundren were a part of a panel discussion to provide insight on what a successful ASC strategy entails.

1. Expand surgical volume. Mr. Hancock and Mr. Bundren both said the success of ASCs revolves around the surgical volume, but ASCs must also look to expand surgical services. Other surgical specialties fare better than others, so ASCs have to look at what services are flourishing and which services stand to gain ground in their communities. For example, Mr. Hancock said some ASCs might want to pursue orthopedics and higher acuity specialties such as spine, as those provide high profit margins. However, Mr. Doyle said that adding new specialties must make business sense and should not be done because it seems like it could be a good idea.

2. Recruit new, younger physicians.
As hospitals continue to ramp up their efforts to employ physicians, ASCs must remain committed to solidifying their physician base, especially as older physicians make their way toward retirement. "Recruiting new surgeons will lead to new cases, but that's easier said than done," Mr. Hancock said. "In terms of just recruiting new physicians, we look at it weekly, daily. It's a time-consuming process, and you have to be persistent."

3. Implement and follow up on an action plan.
When it comes to formal strategic planning, it really depends on the facility, Mr. Doyle said. Administrators, vice presidents and other leadership executives must be involved in the direction and mission of a facility, and action plans must be enacted and reviewed periodically. "Every facility is different, and you need to make sure you have an action plan and implement through all your centers," Mr. Doyle said. "But the hardest part is making sure you dust off the plan and look at it every few weeks to make sure you're spending time on things that matter."

4. Emphasize the "local" in healthcare. "The ASC business is a local market business," Mr. Bundren said. "What works in California will not work in Florida." ASCs that utilize their community resources could be better positioned to succeed. For example, Mr. Bundren mentioned that he had a local equipment vendor approach him to let him know about a handful of physicians that were potential "free agents" for an ASC. Establishing and mining those local relationships could benefit ASCs in ways they might not think, he said.

5. Be tough on insurance contracts. Out-of-network cases comprise a small percentage of many ASCs' revenue, but ASCs need to negotiate competitively with health insurers to make sure their reimbursements don't squeeze them out of the market. "I'm not afraid to reject a contract and redirect [the payor] to the hospital," Mr. Doyle said. "But when you say you're willing to terminate a contract, be willing to terminate the contract. That trick will only work once."

6. Don't use hospital alignment as the only strategy.
Mr. Hancock said from a macroeconomic standpoint, he sees the ASC industry heading toward more consolidation in the next three to five years. Some ASCs may consider aligning with a hospital to offset costs, low reimbursements or a slew of other factors, but Mr. Doyle added that ASCs need to be extra certain before they align with a hospital. It may not always be the most beneficial for an ASC. "Most companies that fail to grow are left to die," Mr. Doyle said. "For a hospital alignment strategy to work, you have to have the right partner, physician or hospital."

Related Articles on ASC Strategies:

4 Best Strategies for Physician-Owned ASCs and Hospitals for the Next Five Years
Business Strategies for Spine in Outpatient Surgery Centers
10 Best Practices for Surgery Center Improvement From 10 ASC Leaders

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