Hybrid ASC self-management model: 8 benefits to know

ASC owners have a myriad of functional management models from which to choose. As owners perform their research, a once commonly overlooked model is now receiving greater consideration.

In this model, which can be described as the "hybrid self-management model," an ASC contracts with an individual(s) or company with vast knowledge in ASC clinical and/or financial management operations. These contracts are typically limited to the specific management-related services required by the ASC.

Here are eight benefits of the hybrid ASC self-management model.

1. Flexibility. Under this model, the ASC can seek management services to address specific short-term or ongoing needs.

For example, on the clinical side, if an accreditation survey approaches and management is concerned about the ASC's compliance with standards and regulations, the ASC can contract a manager with accreditation experience. This manager can work with staff to identify gaps in compliance and implement processes to address them, perform mock surveys and provide education to help ensure a more successful survey,

On the financial side, if management requires assistance with physician recruitment to fill open space in the OR schedule, the contracted manager with related experience can work to identify non-affiliated physicians and then assist or lead outreach efforts.

2. Management cost control. This hybrid of the independent self-management model allows ASCs to pay for services in the areas where help is required and eliminates the need to pay for any unwanted or unneeded services.

As a result, physicians and/or a hospital joint venture maintain full control of the ASC operations, and benefit from the specific services contracted for and provided by the manager.

3. On-demand services. It can be difficult for ASC leadership to keep up with the never-ending changes affecting operations. There are revisions to regulations, accreditation standards, billing and coding rules, and many other requirements every year, and leadership must understand what is required to adapt to them to ensure the ASC maintains compliance and profitability

With the hybrid self-management model, if an ASC encounters a new requirement and is unsure how to properly address it, a contracted manager can come in to provide education on that single issue and assist ASC staff with any related questions. Such on-demand services allow the ASC to pay for the assistance it needs, whenever it is needed.

4. Accountability. When an ASC enters into a joint-venture partnership, exiting requires the involvement of legal counsel and can take a significant amount of time, ultimately costing ASC ownership a great deal of money.

But if a contracted manager fails to deliver on expectations, the ASC can choose not to continue working with the individual(s) or company. While there may be some notice required, as is typically the case with outsourced services, removing a contracted manager is likely to be much easier, shorter and cheaper process.

Such an arrangement places greater pressure on the contracted manager to meet, if not exceed, expectations if the manager hopes to have its services retained again in the future.

5. No equity requirement. In the hybrid ASC self-management model, no equity is required to secure services of contracted management. If more services are needed, they can be requested and contracted for. If fewer services are needed, the contract can be renegotiated and scaled back.

While there are reasons owners may desire to sell equity in the ASC, retaining equity allows owners to maintain autonomy and use the equity to attract new physician partners. In addition, maintaining equity control allows the physicians generating the ASC's revenue to reap the benefits of the profits.

6. No percent of net revenue fee. When a management partner provides services relating to billing and collections, payment is often tied to a percent of net revenue. In the hybrid ASC self-management model, the contracted manager may not require such payment.

When that is the case, any financial improvements achieved go directly to the bottom line.

7. Negotiation partner. Throughout its lifetime, ASC leadership will need to participate in numerous negotiations, including those with payors, service providers, recruited physicians, management staff and even prospective management partners. If the ASC's leadership lacks negotiating experience, or experience with these specific types of negotiations, the ASC may find itself at a disadvantage before even sitting down at the negotiating table.

A contracted manager can be one of the ASC's representatives during negotiations. This will put surgery center leaders in a better negotiating position as an expert will be at their side. The presence of such an expert can help ensure an ASC receives or makes a fair offer.

8. Extra set of eyes during development. Bringing a contracted ASC expert on board during the development or expansion of an ASC can prove to very beneficial. This expert can help ensure decisions made are best for compliance, patient flow, work efficiency and future growth.

Once a project is completed, the ASC can determine if the services of the contracted manager are still required. The longer the center operates, the more experience the administrative team will gain (likely, in part, through working with the contacted manager), which typically reduces the need for the management expert. The ability to expand or reduce contracted services will be an ongoing benefit to the owners.

Don't overlook the hybrid self-management model

The benefits described make the hybrid self-management model an attractive, viable and cost-effective model for today's ASCs. As when considering and choosing any type of management model, surgery centers should perform their due diligence. Research and review the model for compatibility with the ASC owners' vision and objectives for the ASC.

Jessica Nantz (jessica@outpatienthcs.com) is president and founder of Outpatient Healthcare Strategies, a consulting management services firm focusing on operational improvement and efficiencies for hospital outpatient departments, hospital perioperative services and ambulatory surgery centers.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.​

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