How Hospital Employment Affects Surgery Centers: Q&A With Dr. Joseph Banno of Peoria Day Surgery Center

Joseph Banno, MD, is the founder and co-owner of Peoria (Ill.) Day Surgery Center and is past chairman of the ASC Association. He is a board-certified urologist with the Midwest Urologist Group. He received medical degree from the University of Chicago and completed its comprehensive urology program.

Q: What are you seeing in terms of hospital employment in your community?

Dr. Joseph Banno:
Our community has seen erosion in the independent general practitioner. The majority of the primary care physicians are employed by a health system. There appears to be some movement in hiring specialists as well. I think ownership in our surgery center is a major deterrent for our specialist investors to accept employment with the hospitals. However, our center is only as strong as our "feeder" system — which is the "health" of our specialist physician owners. I believe some type of alignment for physicians with a local health system in our community is advantageous. Not to say you cannot stay truly independent, but a working relationship with a hospital system in our community is probably going to be the most beneficial route for the health of specialty practices, which in turn should translate into greater potential for our ASC.

Q: What do you predict as the future of hospital employment — will it speed up, slow down or stagnate?

JB: I think area hospitals will focus more effort and energy hiring specialists. As our "senior-aged" specialists begin to retire in our community, hospitals will be able to recruit younger specialists to accept employment, which will obviously be a detriment to ASC expansion of ownership/recruitment. Partnering our ASC with a hospital is one of our strategies to minimize the impact of specialist recruitment by the hospitals in the future.

Q: What do you think drives physicians away from ASC investment today?

JB: The thought of their referral "pipeline" drying up — because the hospital employs the [physicians] in the pipeline — is a major factor, along with many of the younger physicians' reluctance to take on risk and debt.

Q: What do you think can be done to encourage ASC investment?

JB: Ownership by a health system in our center can and may minimize the referral concern by a potential ASC investor. To manage the risk/debt concern, we have worked with our local bank to develop a financing plan/loan note that is flexible enough that it takes into consideration the actual dividend payments to a shareholder to minimize or eliminate out-of-pocket cash to the investor.

Related Articles on Surgery Center Operations:
4 Major Issues Facing the ASC Industry
20 New Statistics on Surgery Center Staffing Costs

8 Characteristics of Highly Successful Surgery Centers

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