“The projects have not dried up or gone away. There is, however, a lot more work and effort, and a lot more time put into scrutinizing these projects,” says Mr. Lipomi. As a result, many physicians who may have considered developing centers on their own are now more driven toward bringing in a corporate partner, he says.
Although the current number of ASC construction projects has slowed, Mr. Lipomi expects these to pick back up within the next year or so. “I’m encouraged by the fact that the economy has started to come back, and elective procedures have begun to return as well. If unemployment continues to improve, I think we will see ASC business bounce back within the next year, which could mean a return to new construction,” he says.
As a result of reduced access to capital and decreased volume, even small errors in the development process could greatly hurt an ASC’s chance of success. Thus, it is critical that ASCs are expertly planned and constructed. Mr. Lipomi says that clinical and economical considerations are the most important to address during this process.
1. Clinical perspective
Clinical considerations, including state and federal requirements for your type of facility, must be the highest priority.
“You cannot in any way, shape or form, understate or cut back on the clinical requirements or needs of your facility,” says Mr. Lipomi.
When constructing a facility, its developers need to ensure that the facility meets all state and federal guidelines for new medical facility construction and is constructed in a way that will assist in the meeting of accreditation standards.
After a facility has considered these nonnegotiable aspects of construction, Mr. Lipomi recommends that developers “take it one step further” and involve experts throughout the ASC in the construction plans. “I think it is critical you involve clinical experts from each department as well as and individuals familiar with administrative processes,” he says. “For example, have an employee from pre-op and OR recovery help to design those areas of the facility. Have a biller and coder assist in designing the administrative area.”
Gaining the input of various department employees will greatly cutback on costly errors due to inappropriate design. For example, the sterile processing area at a medical facility in Houston ended up being one-tenth of the size it needed to be, according to Mr. Lipomi, and as a result the facility was forced to outsource its sterile processing, which was much more costly to the facility. If an OR nurse or central processing employee would have reviewed the plans, the error would have quickly been discovered, says Mr. Lipomi.
2. Economic perspective
In addition to clinical considerations, ASC developers must pay attention to the economic aspects of the facility’s development. Creating the “Taj Mahal” of ASCs, as Mr. Lipomi puts it, is not necessarily for great patient care. ASCs that overestimate volume may end up maintaining costly, but unused operating rooms and groups that provide dedicated space for infrequent activities end up paying for space that isn’t utilized.
“Make sure you’re building a facility that will adequately house what you need to do, and be careful not to overestimate the space needed,” says Mr. Lipomi. “Beware of the extra costs in each additional square foot. For example, a large board room and meeting room that isn’t utilized often is unnecessary, and doing away with it could create significant savings that could be used in other ways, he says.
ASCs that find themselves with too much space may be able to gain an additional source of revenue by leasing part of their facility to other groups, such as physician practices. ASC owners that consider this practice must ensure that the rent is driven by the market. Providing rent at below-market value would be considered paying an inducement to the lessee.
ASC developers that are considering leasing space rather than constructing their own should be careful to consider whether or not the space truly meets their needs. “When you rent you may rent what’s available and not what you actually need. You need to make sure you’re able to fit your business in whatever space you rent,” says Mr. Lipomi.
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