9 Areas of Focus When Developing a De Novo Surgery Center

Here are nine areas physician-investors should focus on when developing a new ambulatory surgery center as identified by the leadership team of Meridian Surgical Partners.


1. Financial projections. If you take a very conservative approach to budgeting a project, you can move forward with the confidence of knowing the scope is driven by accurate data, says Buddy Bacon, CEO of Meridian Surgical Partners. "For example, too many financial forecasts are built with the attitude of 'if we build it, they will come.' Base your financial projections on the physicians that are committed to the project and the cases they can realistically transfer to the ASC," he says. "If the project is viable at that point, then you can move forward to syndication, with a strong sense of confidence."


2. Real estate. As with all real estate, location plays a key role for the success of an ASC. A new surgery center would be well-served to find a location which provides good visibility along with easy access to the facility. In addition, it is wise to locate the facility only a few miles from a hospital and other physician offices for added convenience for patients and physicians.


3. Property development. Selecting an architect with ASC experience can help ensure your facility is designed properly and will meet state and federal guidelines. The architect can serve as a good source for construction firm suggestions, but you may still want to contact other ASCs for their input and do your own research to identify options. Take an active role in the decision-making to help streamline the development process.


One important thing to remember is to make sure not to overbuild the facility. "The best way to avoid doing this is to let the case volume drive the scope of the project," says Mr. Bacon. "Depending on the specialty mix, an efficient and effective ASC can perform in an 8,500-square-foot facility."


Once the project is underway, you should make sure the architect and construction firm keep you well-informed throughout each phase of development. Try to schedule weekly meetings where all key members of the project are briefed to ensure milestones are met.


4. Marketing. Promoting the future opening of the ASC to the community is important. Consider holding a construction site event a few months prior to opening. This can help identify additional physician and staff recruits.


Send out press releases to the media and invitations to a select group to help spread the word about the event. Hold an open house one week prior to performing cases. Additionally, develop a corporate identity that includes a logo, letterhead, literature and website to further help spread awareness of the new ASC and grow brand recognition.


5. Human resources/staffing. Identifying and hiring an experienced ASC administrator should be the first step in staffing the facility. With the leadership of an experienced administrator on board months before the your center opens, you can develop a ramp-up plan, designing initial staffing around a condensed schedule, opening only enough days to accommodate early volume, then expanding to run a full schedule and staff as volume dictates.


6. Equipment planning. Working closely with an equipment planner with specific ASC experience can help to streamline the process of designing, purchasing and placing the equipment in the ASC. Try to find a reputable equipment planner with established working relationships with regional and national manufacturers, as well as someone with the ability to work seamlessly alongside your architect and construction teams.


7. Licensing. Start the licensing process early. Gathering all the necessary information from physician-partners and submit it as soon as possible. If you plan to treat and receive reimbursement for the treatment of Medicare patients, it is worthwhile to complete this application early as well. The other option you can consider is whether you want your ASC to apply for deemed status through one of the ASC accreditors. If you pass this survey, which combines Medicare's requirements and the accreditor's standards, your ASC will be Medicare-certified and accredited.


8. Managed care. Reimbursement is the lifeline of an ASC. Start the discussions and negotiations with third-party payors early. Do not approach payors in an adversarial manner. Understand what they are looking for and convey your needs. Prepare to make some compromises but do not sign any contracts that do not make financial sense, even if you are eager to start seeing cases and receiving reimbursement for them. Do not expect to make money off of a poorly reimbursing contract through volume. Also, it is harder to rectify a bad contract than it is to continue negotiating until you receive a contract that makes sense for you and the payor.


The absolute best tactic that generates optimal outcomes is to negotiate in person, says Kevin Dowdy, vice president of managed care for Meridian Surgical Partners. "This may not be cost-effective or practical for all negotiations, but try to make this a priority for the larger payors," he says. "Being able to have face-to-face discussions allows for improved discussions and dialogue with the payor representative."


9. Inventory management. In order to effectively manage inventory and supply costs, create preferences cards and standardize them among the physicians. Carefully consider the products you choose to ensure the highest level of quality at the most cost-efficient price. It is worthwhile for physicians to be active participants in the early decision making points around supplies and costs.


Learn more about Meridian Surgical Partners.


Read more from Meridian Surgical Partners:


- Selling Your Surgery Center in a New Economy: 3 Things You Should Expect


- Formula for Calculating Surgery Center Operating Expense Per Case: Q&A With Brian Brown of Meridian Surgical Partners


- 5 More Physician Statistics Surgery Centers Should Track and Benchmark

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