Opening an ASC is easy, but staying in business is hard: Insights from Dr. Vladimir Alexander's 20 years of ortho practice leadership

Opening a new ASC can be daunting. Surgeons are experts at providing outstanding medical care, but many are less familiar with the numerous components that contribute to a positive, patient-centered experience.

Facility-related considerations are critically important, such as maintaining product inventories, handling coding and reimbursements and bringing multiple service lines such as orthopedics, spine surgery and ENT under one roof. Becker's ASC Review recently spoke to Vladimir Alexander, MD, founding partner of Alexander Orthopaedic Associates in Florida, about his experiences building and managing successful ASCs. He shared advice about what it takes to run a profitable venture, as well as insights about the value of trusted vendor partners.

ASCs give surgeons complete control over the patient experience

After completing his medical training in 2000, Dr. Alexander moved to St. Petersburg, Fla., and joined a physician group. He worked there for two years but felt somewhat dissatisfied because the group wasn't interested in growing and offering a more patient-centric experience.

"After two years, I left and started Alexander Orthopaedics," Dr. Alexander said. "We saw our first patient in October 2002. This year, we'll celebrate our 20-year anniversary. The practice originally consisted of me and one physician assistant. Today, it's seven fellowship trained surgeons focused on orthopedic sub-specialties, as well as eight physician extenders, which include PAs and nurse practitioners."

Alexander Orthopaedics also offers on-site physical therapy with three physical therapists and three physical therapy assistants, on-site MRI, on-site X-ray imaging and an in-office pharmacy. The practice now serves the greater Tampa Bay area, with locations in St. Petersburg, Largo, New Port Richey and Palm Harbor. "The organization has grown into the practice that I originally envisioned at the beginning of my career," Dr. Alexander said. "I stepped away from my first job and found that I was able to do it better on my own with the correct partners."

For Alexander Orthopaedics, the journey to opening an ASC was based on careful planning and incremental growth. About three or four years after Alexander Orthopaedics opened, the practice realized it was running out of space. Dr. Alexander bought a piece of land about a mile away and built a new facility there.

"We built out 20,000 square feet of space — 10,000 for our office and 10,000 for a learning center and ASC," Dr. Alexander said. "We waited to open the ASC, however, until the practice was busy enough to support that business."

Initially, Alexander Orthopaedics had a corporate partner. After several years, Dr. Alexander recognized that having complete control over the business would support a better, more patient-centered experience. According to Dr. Alexander, "Everything that we've done in our practice is better now that we have control, because it allows us to focus on our patients. Corporate partners aren't the ones looking after our patients."

After developing, building and ultimately selling multiple surgery centers, Dr. Alexander and Daniel Penello, MD, Dr. Alexander's business partner, decided to launch a new company called SmartCare Surgical Partners that develops surgery centers.

Their first center, SmartCare Palm Harbor, is scheduled to open in March of 2022 and will exclusively serve physicians who are part of Alexander Orthopaedics.

Thus far, patient satisfaction has exceeded expectations. "We thought patients might be unhappy that their surgeon was an owner in the ambulatory surgery center where they were having their procedure," Dr. Alexander said. "We've found the exact opposite to be true. Patients are ecstatic that we have complete control over the facility where they are having surgery.

"Most patients think that doctors have control over the hospital where they perform surgeries, which is completely false. One facility won't let me use a certain cement because they think it's too expensive. When you do procedures in your own ASC, patients are pleased. They understand that what you're doing is best for their overall health, rather than a businessperson making fiscally based decisions about their health."

Opening an ASC is easy, but staying in business is hard

One major challenge facing new ASC owners is developing an appropriate pro forma. "This is very hard to do," Dr. Alexander said. "You need to identify the right case mix, insurance mix, patient mix and volume of surgeons. The appropriate mix is different for every center. Once you meet those criteria, you can develop the center, open it and generate the appropriate revenue and financial remuneration for doing your procedures there."

Understanding operational issues is another hurdle for physicians who are new to the ASC business model. "Until surgeons do this at least once, they have no knowledge of coding, reimbursement or anything on the facility side," Dr. Alexander said. "The hardest thing about opening your first ASC is that you don't know what you don't know, and you may not even know what to ask. Even after doing this multiple times, there are still some instances where I don't know the answers. I seek support and counseling from experienced colleagues and business partners. I think opening an ASC is pretty easy, but keeping an ASC open is very hard."

Dr. Alexander has worked with Stryker for several years and is now using Stryker as a strategic business partner for the newest SmartCare ASC. "Stryker offers huge value in the ASC market because they sell the majority of products needed to open an ASC and to support operations, from things as simple as gurneys to arthroscopy equipment and implants," Dr. Alexander said. "It's a comprehensive company that includes all necessary product lines, the breadth of which few others can offer. It's an easy decision to partner with a company like Stryker. They have been nothing but excellent to work with on our new ASC."

The recipe for ASC success: Do what you do very well and deliver a patient-centered experience 

Dr. Alexander's number-one piece of advice for surgeons who want to open an ASC: Be superb in your clinical skills first. Surgeons who are still perfecting their clinical craft may lose focus on the ASC business; if focus is lost there, it's a quick recipe for financial failure. Thus, surgeons opening a successful ASC should be able to handle their clinical practice and ASC business with the same amount of focus and direction. 

His other recommendation is to provide great service. "If you are a good orthopedic surgeon and provide outstanding service, the rest tends to work out on its own," he said.

At SmartCare ASCs, the top goal is to provide great patient care at one facility, so the experience is as simple, convenient and comfortable as possible for individuals undergoing surgery. According to Dr. Alexander, "It can be confusing and overwhelming for patients to drive a long distance to an unfamiliar hospital, figure out where the check-in is and navigate the system. At our ASCs, everything is under one roof. All involved entities utilize uniform electronic health record computer systems and the physical plant also houses our orthopedic office. This facilitates the patient experience with familiarity of a place they are comfortable in and have been to before."

Finding a single-source vendor with similar organizational values is another way ASCs can deliver patient-centered care.

"In the past, when opening an ASC, I used several different vendors. There were a lot of 'cooks in the kitchen' and a lot of confusion, which made it much harder to get an organizational hold on things," Dr. Alexander said.

For the new SmartCare ASC, Dr. Alexander has partnered with Stryker as a single source. "When you consolidate, it makes things a lot easier — especially when you have a relationship and trust in that single source," he noted. Stryker's focus on great service resonated with Dr. Alexander. "Stryker became popular because they provide outstanding service," he said.

"That has allowed them to expand, acquire and develop a much broader customer base and become a much larger company. The principles of providing great service are still central to the organization, just as they are for us."

SmartCare's interactions with Stryker has been very transparent and honest, according to Dr. Alexander. "We found with Stryker, if they had the best product at the best price, they would tell you," Dr. Alexander said. "If they didn't have the best product or price, they would also tell you. We found that very helpful because it gave us reasonable options. One thing you don't want to do when opening an ASC is to get behind the financial eight ball before you're even open. The experience makes us want to continue doing business with Stryker in the future."

Patient experience above all

At Alexander Orthopaedics, the priority is to offer patients a high-quality experience from the moment they step through the doors to their last follow-up appointment and beyond. The practice's ASCs offer an opportunity for patients to recover at home and return to aspects of normal life sooner.

"Our patients are our best ambassadors and marketers, as long as you provide them a good experience" Dr. Alexander said. Dr. Vladimir Alexander is a customer of Stryker. The opinions expressed by Dr. Alexander are those of Dr. Alexander and not necessarily those of Stryker. 

Stryker is one of the world's leading medical technology companies that offers innovative products and services in orthopedics, medical and surgical devices, neurotechnology and spine to help make healthcare better.

Procedural volumes, particularly with total joints, have been migrating from the hospital outpatient department to ASCs. With the potential to provide over $55 billion per year in healthcare cost savings in the U.S., this shift in site of care is expected to continue beyond the post-pandemic environment.

To meet the unique needs of this emerging customer, Stryker launched an ASC-focused business in 2020. With thousands of unique and clinically proven products spanning more than 20 procedural specialties, a wide range of flexible financial options and teams who understand the ASC landscape, Stryker is committed to delivering tailored solutions for ASCs to achieve their mission and goals.

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