Opening a private, cash-pay surgical practice looks straightforward from the outside: buy or rent space, get permitted, start operating.
Heather Levites, MD, founder of Levity Lifts, a plastic surgery practice in Raleigh, N.C., walked Becker’s through what year one actually cost, and where a single classification decision saved her from a much bigger bill.
The real estate
Dr. Levites purchased a 3,000-square-foot medical condo from an ophthalmologist who had previously practiced in the space, meaning it was already coded for medical use.
“That doesn’t mean much other than I was able to see clinic patients here while I was getting my permits,” she said. The purchase price was “right around the million-dollar mark,” though she noted that figure will vary significantly by market.
While she waited on permits, Dr. Levites rented operating room time from other local plastic surgeons who weren’t using their own ORs every day of the week.
The permitting timeline
Permitting took about nine months. In North Carolina, Dr. Levites’ facility is classified as an office-based surgery center rather than an ASC. Once permits cleared, she demolished the space down to the studs to rebuild it to her specifications.
How long that process takes, and how much scrutiny it draws, varies significantly by state. Some states exempt office-based surgery from facility licensure altogether, treating it as an extension of a physician’s own license rather than a separate regulated entity.
Others impose specific triggers: New York requires office-based practices performing procedures with anesthesia beyond minimal sedation — including any liposuction — to be accredited by a designated accrediting agency and to report specified adverse events directly to the state Department of Health, while Massachusetts requires a state license for any office performing liposuction or other procedures involving more than minimal sedation. Arkansas enacted a dedicated regulation spelling out requirements for physicians performing office-based surgery.
The result is a patchwork where a facility like Dr. Levites’ can move through permitting in under a year in North Carolina, while an equivalent practice might face a longer or shorter road, and a different cost structure entirely, depending on the state.
Beyond the real estate purchase, Dr. Levites said architectural fees, interior design fees and construction fees added up to a separate, substantial cost. That number didn’t include capital equipment like lasers or other expensive technology, but did include startup supplies, battery backups, lighting and HVAC.
Why classification mattered
The single biggest cost-avoidance decision, according to Dr. Levites, was staying classified as an office-based surgery center rather than upcoding to an ASC, something local surgeon-mentors steered her away from. Because Levity Lifts doesn’t accept insurance, including Medicare and Medicaid, it isn’t held to the same regulatory requirements as an ASC.
“I was saved from creating or upcoding my space to an ambulatory surgery center, where I would have needed piped gases and various other sizes of hallways, and just other more expensive pieces of architecture that would have needed to have been included in the design,” she said.
Safety requirements didn’t disappear — she still needed fire alarms and gas permits — but the more constrained architectural and equipment standards that come with accepting insurance didn’t apply.
“If you want to accept insurance, like Medicare, Medicaid specifically, you have to follow an increased, more constrained set of regulatory conditions,” she said.
The piped medical gas system alone, the specific line item Dr. Levites avoided, typically adds $30,000 to $100,000 or more to an ASC build-out, depending on the number of operating rooms and gas outlets required, on top of the wider hallways, backup power and other architectural features tied to that classification.
Keeping costs down after opening
Cost discipline didn’t stop at the build-out. Dr. Levites said she and her surgical assistant, who oversees inventory and ordering, review per-procedure supply costs monthly.
She also pointed to OR efficiency as a cost factor tied directly to being self-funded rather than hospital-employed. “What might take somebody four hours in a hospital because they’re really not under a time crunch takes me now an hour and a half, because I’m paying for every dollar of anesthesia, every minute,” she said. “Time is money.”
That kind of scrutiny reflects a broader pattern in outpatient surgical economics: drugs and medical supplies account for roughly 23.8% of total ASC operating expenses on average, and mean operating costs per case run about $1,543, split roughly between supplies ($491) and staff wages ($436), according to VMG Health benchmarking data. For an independent, cash-pay practice like Dr. Levites’, with no payer contracts to fall back on, that per-case math is the whole business model.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.