Moving From Hospital-Based Department to ASC: 5 Challenges and Solutions

Ron Bullen, administrator of Moreland Surgery Center in Waukesha, Wis., oversees an ASC joint venture that converted from a hospital-based department to a surgery center two years ago. Here he discusses five challenges associated with operating his particular structure of hospital/ASC joint venture — and five solutions that have made the partnership successful.

1. Inheriting a hospital based culture.
The challenge: When the hospital decided to transition its hospital department to an ASC joint venture, the ASC was staffed with employees who had spent their careers working in the hospital setting. Inheriting hospital-minded staff can be challenging for an ASC, as the culture and expectations in a surgery center are necessarily different from the hospital. For example, surgery centers rely on fast turnover, minimal support staff and more multi-tasking to stay efficient and profitable, whereas hospitals generally have extensive support staff, more policies and procedures and/or cumbersome paperwork that can hamper the efficiency and cost effectiveness of moving a patient through the facility.

The solution:
Mr. Bullen says he transitioned hospital staff into the ASC by conducting one-on-one interviews with every staff member coming to the facility. "We had to make sure expectations were clear up front about what the new organization was going to look like," he says. "If staff couldn't comply with what we thought were the expectations of the ASC environment, they could choose whether they wanted to remain or not." He says a few staff members were displaced because of the difference in roles between the ASC and the hospital; for example, the surgery center did not require surgical assistants or anesthesia techs, while the hospital did. Others chose to leave because they did not like the new role they would have to fill. But for the most part, Mr. Bullen says hospital staff members transitioned into their new roles without much difficulty. He still has every staff member he started with two years ago.

2. No prior experience with ASC management.

The challenge: One of the greatest challenges in moving from a hospital-run department to an ASC was making sure everyone understood the structure and operational needs of the surgery center, Mr. Bullen says. "The physicians had no experience running an ASC, and the hospital had no experience running an ASC as a true standalone ambulatory surgery center," he says. "Understanding pricing structures, staffing costs and processes associated with keeping facility costs down was something we had to work through as a team." While the transition from a complex hospital system to a surgery center might seem to introduce more simplicity, the needs of a surgery center are so different that hospital management and physicians need to be educated on ASC operations.

The solution: Mr. Bullen says the process of setting up the ASC took quite a while: He was given a three-month timeline and the set-up took six months. However, he benefited from partnerships with several ASC veterans, including IT provider SourceMedical. "Our IT transition had a short timeline. We had less than 90 days to transition from the current system to an ASC-based system, and with SourceMedical, I was able to do that transition without a lot of additional headaches," he says. He says the vendor had also established partnerships with many other vendors, so the ASC also benefited from contact with an experienced billing company.

3. Moving to a new accrediting body.
The challenge: When the hospital-based department converted to a surgery center, the ASC decided to use a different accrediting body than the hospital had previously used. "The hospital uses Joint Commission, and we use AAAHC," Mr. Bullen says. "There are differences in how those two bodies accredit the organizations, and we had to revise a lot of policies to mirror what AAAHC wanted us to do." He says staff members were initially hesitant about accepting AAAHC standards because they had worked with the Joint Commission for so long at the hospital.

The solution:
Transitioning to a new accrediting body is simply about hard work: Mr. Bullen and his staff had to sit down with their policies and make sure everything complied with AAAHC regulations. However, he said the transition to AAAHC actually benefitted the surgery center in another way. "In going to a new accrediting body, we had to examine all our practices and procedures and make some changes, and we eliminated people saying they had to [follow old hospital procedures] because they were JCAHO requirements," he says. In transitioning to AAAHC, staff members had to rethink their old assumptions about policies and procedures and ended up developing new efficiencies for the surgery center.  

4. Physician expectations.
The challenge:
Most of the physicians in Mr. Bullen's ASC had little experience managing surgery center operations when the ASC opened, though some were more business-minded than others. Because they had spent most of their previous experience working in hospital environments, some physicians had expectations that the ASC could not fulfill. "The most obvious example is product standardization," Mr. Bullen says. "It's very difficult in the hospital setting to do any product standardization. The nice thing that makes ASCs successful is that you've got a vested physician interest. Physicians understand if you've got five different like products and you're carrying inventory for each product, you're not being cost-effective." Getting all physicians to initially agree to several product and practice standardizations was somewhat of a challenge.  

The solution: Like many other ASC administrators, Mr. Bullen found success in demonstrating cost savings to his physicians on a regular basis. "Once you show physicians the data on cost savings, they will engage much more readily in the change process," he says. He says one of the best things about a physician owned surgery center is the ability to "get things done from a cost perspective" because physicians understand you're trying to improve the financial performance of the organization. If physicians ever object to a necessary cost-saving initiative, Mr. Bullen reminds them of their strategic objectives of the entity to reduce cost and provide a more economical choice for our patients.

5. Negotiating between physician and hospital board members.

The challenge: Mr. Bullen's ASC is 51 percent hospital-owned, 49 percent physician-owned, meaning the hospital has a significant impact on the center's strategic direction and decisions. This can be a challenge because the ASC board is made up of hospital management and ASC physicians, two parties that may have different priorities. "I have to constantly consider the objectives of all stakeholders," Mr. Bullen says. "One is the vested physician owner who will be at the center long-term, and the other is a hospital partner with appointed officers that change over time." He says while faces on the board change over time, he has to maintain the alignment of vision between the surgery center physician owners and the hospital's leadership.

The solution: Mr. Bullen says he has succeeded in balancing the interests of hospital and surgery center board members by consistently providing sound rationale for all decisions. "You show the benefits and risks to both stakeholders in the long run," he says. In every decision he makes, he keeps both parties in mind and demonstrates how the choice will benefit the surgery center as a whole.

Related Articles on Hospital/ASC Joint Ventures:
5 Key Legal Issues Affecting Surgery Center Joint Ventures
10 Recent Surgery Center Joint Ventures
Alabama Surgery Center in Tuscumbia to Operate as Hospital/Physician Joint Venture

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