Dawn Q. McLane: A number of things are impacting the decline in the number of de novo projects in the ASC environment. The industry is maturing, meaning that in many communities, the available qualified physicians are either committed to an existing ASC or in some communities more physicians, even specialists, are being recruited to become employees of the community hospital system. The number of physicians available to participate in a new surgery center is limited.
Financing can be challenging. The days of non-recourse financing are essentially gone. De novo groups would be well served to start talking with financing organizations, whether that’s the local banks with whom they already have an existing relationship or a national financing company. The process, including documentation required, underwriting and closing the loans can take six months or more once you decide where you will get financing. It is a much more laborious process than it used to be. Pay attention to both the rate offered and the terms of the loan, particularly the personal guarantees that will be required of all owners (often now more than 100 percent pro rata share), early payment penalties, etc.
Learn more about Nikitis Resource Group.
Read more about de novo ASC issues:
– 3 Things to Know About the De Novo ASC Market
– Building a Successful ASC from the Outside In
