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6 Advantages Surgery Centers Afford Physicians

Here are six advantages of surgery center investment for physicians.

1. Surgeons have more control. When surgeons own the surgery center, they have the ability to control their environment and treat patients with the best care possible.

"Surgeons are growing tired of fighting the hospitals," says Paul King, CEO of DoctorsManagement. "If a hospital operating room is not running efficiently, or a surgeon's cases are bumped, the surgeon may be compromising patient care."

There are several models available for surgery centers, but one that is trending right now for single-specialty groups, such as ophthalmologists, is adding a small surgery center connected to the practice.

"Even at 50 percent capacity per week, a surgery center can be financially lucrative," says Mr. King. "There are also practical benefits if the surgery center is built onto or within the office, making logistics easy for staff, surgeon and even the patient. Staff can be utilized at the practice as well as the surgery center. Additionally, the management of the surgery center can be handled by the existing staff or with only minor expansion of the staff, versus adding a new business office or a management company. This means the practice can own 100 percent of the surgery center."

2. Enhanced efficiency. Since surgery centers are reimbursed less than hospitals, they must optimize efficiency to perform as many quality cases as possible every day. Coupled with physician leadership, surgery centers are able to try new and innovative ways to maximize surgical time and minimize downtime for the physicians and staff.

"A center privately owned by the surgeon usually runs more smoothly," says Mr. King. "Financial rewards are greater, of course, when you are efficient and able to perform more cases. Today's surgery centers are managed better today than they were even five years ago."

3. Surgeons are incentivized to provide better patient care.
The quality of care is higher in surgery centers because surgeons are invested both clinically and financially in their patients' success. In hospital employment, that incentive doesn't exist. "When you own your own business and have vested interest in your deals, the quality of care is better," says Taseer Badar, co-founder, President and CEO of ZT Wealth and Altus Healthcare Management Service. "Surgeons are better off financially and patients have better quality of care."

The future of accountable care organizations offers surgeons another opportunity to take control of coordinating their patients' care and investing on multiple levels. "The new ACO model, from our point of view, shows how the cream of the crop surgeons will rise to the top and continues to invest in ASCs," says Mr. Badar. "It's very difficult to manage a lot of star physicians, but if they do come together the surgeons do very well and the patients have better outcomes than if they were in the hospital."

4. Ancillary income brings increased profitability.
Surgeon practices are being hit hard by declining reimbursements and increasing office expenses, but investing in a surgery center can give surgeons an extra revenue stream. "If you are involved in a surgery center that does well, it takes three or four years to get payback on the investment, but if it's a growing surgery center, it may take less time than that," says Mr. King. "However, none of us can predict how reimbursements might change in the coming years."

When they are well-run and in the right market, surgery centers are almost always profitable. "It is rare to find a properly-run surgery center that isn't profitable," says Mr. King. "Not only is a surgery center investment something that surgeons can benefit from financially, but they also benefit from the clinical advantages of performing cases in the ASC. And their compensation is based on the success of the surgery center, of course, not necessarily on how many cases they perform."

While a large hospital employment salary seems enticing, investment in the surgery center can continue driving returns long past the employed surgeon's hospital contract expiration date. "It's very important for surgeons to look for ancillary income in the surgery center because being a hospital employee is only a short term solution to profitability issues," says Mr. Badar. "Hospitals are trying to court surgeons right out of medical school, but once they stop drinking the Kool-aid they realize the hospitals are raking all the money off the top and giving them very little."

5. Healthcare reform rewards the strengths of surgery centers.
Healthcare reform legislation aims to promote higher quality, more cost efficient care; ambulatory surgery centers have been working toward that goal for the past few decades and have perfected a system to provide low-complication, lower-cost care.

"We believe that outpatient centers, pre- and post-President Obama, were definitely contusive for surgeons to invest in and also provide great healthcare at a lower cost compared to the hospital, which has always been a competitive advantage for the patient," says Taseer. "Everybody wins with the ASC. Surgery centers are here to stay for the long term, and patients generally like going there, as long as there is full disclosure from the surgeons about ownership."

6. More procedures are becoming outpatient.
Advances in technology make it possible to bring more procedures than ever into the outpatient setting. Investing now can put surgeons ahead of the curve for the future.

"The future rates of reimbursement remain to be seen. Since surgery centers have a lower facility fee, however, more of the compensation can go to the professional fee," says Mr. King. "There will also most likely be procedures that are performed in the hospital now that in three or four years can be done in the surgery center. In the case of surgeons, the more eggs they have in the basket, the more security they have. Investment in a surgery center is not only another way to generate income for your practice, but to also help diversify your revenue stream."

Related Articles on Surgery Centers:

8 Steps to Build a Cash-Pay Program at Surgery Centers

11 Key Legal Risk Areas for Ambulatory Surgery Centers

5 Steps to Prepare for ICD-10 Starting Now

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