Consulting the Experts: Evaluating and Working with ASCConsultants

By Erika Camardella and Kris Ellis

For many ambulatory surgery centers (ASCs), enlisting the services of a skilled and knowledgeable consultant has provided a distinct advantage in today’s competitive market. There are many questions to be asked and circumstances to be considered as ASCs determine whether or not a consultant would be beneficial. This month, today’s surgicenter posed a series of questions to several ASC consultants and a few of their clients in order to get their perspectives on the consultative experience.

We asked industry experts what they thought were the minimum levels of expertise consultants should have. Joe Zasa, co-founder and a principal of Woodrum/Ambulatory Systems Development advises, “The consultant should have developed a minimum of 10 facilities similar to the proposed engagement. There are four primary venture structures: physician-only ventures, hospital-only ventures, hospital-based centers with hospital reimbursement, and hospital-physician joint ventures. There are also sub-specialty centers including pediatric centers, neurosurgery centers, endoscopy centers, etc. Each structure is different, so make sure your consultant has related experience.” Fred Ortmann III, MHA, president of Ortmann Healthcare Consultants, LLC, remarks, “As a minimum, any consultant who proposes to do work for an ASC should be qualified to do the work by his/her education, experience, interest and availability. The expertise required is directly related to the type of project they seek, and the client should ensure that the consultant has direct experience doing the type of work the client desires.”

“It is important to know what the consultant’s current client base is, and about the consultant’s experience, but also their background prior to consulting,” adds Gayle Evans, president of Continuum Healthcare Consultants, Inc. and Quality Surgery Centers, LLC. “Career experience can provide skill sets that are different for each project. Also, the communication skills of the consultant are important. The consultant should be able to effectively communicate with the physicians as well as the staff during a project.”

Rob McCarville, MPA, principal of Medical Consulting Group, LLC, says that any consultant under consideration for hire should have at least five ASCs that they have successfully developed, as well as “significant experience working hands-on in the development and operation of new ASCs.” He adds, “They can continue to raise the bar in service by providing clients with a forum to share experiences and outcomes amongst past or other existing clients.” Susan Hollander, BSN, MBA, FACHE, vice president of NSC/Aspen, concurs, adding, “Five to eight years experience in multiple types of ASCs and in development, operations implementation and management — not just operating one surgery center for a period of time.”

When it comes to evaluating and hiring a consultant, Patricia Churchwell, RN, BA, vice president of development for Surgery Consultants of America, Inc., advises, “The facility needs to obtain the following information on the company: expertise of each consultant in area; specific tasks that the consultant is responsible for; tasks not included that are essential in developing and managing ASCs (i.e., many companies do not negotiate managed care contracts, and individual consultants usually do not provide financial reports); capacity of company; reports that the company will produce in development and management; references both in development and management.”

Hollander encourages ASC operators to “check references closely, especially if a facility can determine a couple former clients that are off the list of references. No one provides poor references, so it is important to investigate ones that are not provided. Be sure that the consultants representing the other support members of the corporation are true employees and not just consultants to the consultant. There is more dedication to the client and more dedication to the results when all are true employees of the same consulting company.”

Evans believes that familiarity with regional regulations is a big plus when evaluating a consultant. “While the consultant should be the expert on a project, it is not imperative that they have worked in each state specifically but that they have an approach to understanding the requirements of each state. Each client thinks their state is the most difficult to deal with, but it is the approach that the consultant takes in understanding the state requirements that is important to the project.”

Meeting consultants face to face is critical, agree several industry experts. “Meet with the individuals who will actually do the work and examine their historical results both in their consulting role, as well as in their previous work,” advises Parrish, while Ortmann says, “First and foremost, I believe that a consultant should not be retained without a personal interview. During this interview, the client will have an opportunity to evaluate the consultant, and the consultant may also evaluate the client. If the two parties believe they can work well together, then the two should negotiate a ‘scope of services’ detailing the work to be done, and lastly a price and timeline for the project.”

“The consultant should submit every member of the consulting team so that the client can understand the depth of knowledge of all parties. This is a common weakness whereby the consultant is very knowledgeable regarding the deal structure, but the team is weak in operations, contracting, etc.,” explains Zasa.

ASC owners and operators should develop a list of key questions when evaluating consultants’ services. “Ask the consultant to provide detail regarding their philosophy on how to approach a project. Listen for key terms to make sure that this group is a good fit,” Zasa advises. “Have the consultant describe in detail how he or she develops and/or manages a center. This should give a clear picture of experience and depth of knowledge.” Parrish tosses out a few questions. “ ‘How long have you been consulting in this area? What was your ‘real world’ experience?’ Also, ask for sample deliverables (e.g., a feasibility report) and a reference that fired the consultant.”

Evans says she is less concerned about the number of client facilities a consultant has, because it is not an indicator of quality. “The success factors identified for each project are important,” she says. “Savings on time, efficiency and costs of the project are critical factors. Also, the timing of getting the center open is extremely important. Handling the state politics related to CON (certificate of need) or non-reviewable facilities is critical to the client’s success. The ability to provide services with minimal legal input to keep costs down is important.” McCarville adds, “‘How do you specifically plan to expedite my project amongst multiple projects? How often will you be on-site, and who are all of the individuals that will be involved?’ Explain in detail the fee structure; ‘What are extraordinary expenses beyond ‘professional’ fees? What experience do you have in working with specialties?’ ” Hollander suggests that ASC owners/ operators ask, “‘What was your worst failure and your most unhappy client? Can I contact him/her? What project required expansion the soonest after opening? Why wasn’t this planned for in the development phase?’ It is very easy to ask the proper questions or ‘feel-good’ questions. When selecting a consultant, fixate on the projects that did not fare as successfully as the ones that are presented — every company has an example.”

When it comes to the components of a successful relationship between the client and the consultant, industry experts say it’s a mix of professional respect, communication, and trust. “The consultant should blend in as an authority team member on the project. There should be a comfort level working with the consultant,” Evans says.

Communication is a cornerstone, the experts add. Churchwell notes, “The most important aspect to a successful client/consultant relationship is good communication. The consultant should constantly assess all areas to identify areas for improvement, proposed goals, resolution, and how it will be implemented. As most clients measure success by results, consultants need to report in a result-oriented format for both financial and patient care areas. Obtaining repeat business is a clear indication of a successful relationship.” Chiming in is Hollander, who comments, “Communication, communication, communication. If your client is wondering about the progress of the project, then the consultant has failed. Some worry is natural due to the large sums of capital required to build/modify/purchase an ASC.” Says McCarville, “Open lines of communication are key. Keep the client informed on a routine basis, even if there isn’t much happening. Respond in a timely manner to client’s questions or requests. Take responsibility for the project or the specific services requested.”

Ortmann explains that the essential components of any professional relationship include a “well-defined scope of work, and description of the work; well-defined client expectations with respect to time and quality of the project; physician involvement; integrity; and respect for each other.”

No professional relationship will work smoothly without proper conflict-resolution skills, industry experts maintain. “Client concerns are handled and resolved immediately, even if it means making a special trip to solve the problem,” Ortmann adds. “During the project, there should be an in-person, mid-project review with the client and a written project review at the end of the project based on the client’s written evaluation.”

“The consultant must be able to listen to the client and discuss the client’s concerns and assist the client in working through the concerns,” Evans adds. “The ability to provide the client with options to allow them to make an educated decision is important.”

“I think a good consultant is always going to be taking that feedback and changing what they do as a result of it,” asserts Luke Lambert, chief executive officer of Ambulatory Surgical Centers of America (ASCOA). “I know that for us, it is second nature to be taking that input and using that to deliver better service. I would think any good consultant or developer would do that.”

A timely response to issues on the table is key, according to Churchwell. “Any immediate client concerns should be handled immediately or within a reasonable timeframe,” she says. “In most cases, policies and procedures are in place to address these concerns and also address how they are brought to the board level.” Parrish remarks, “Everyone wants to have their questions/concerns answered. Ignoring them will only exacerbate the situation. Being truly consultative with constant communication is a mandate.”

Frequently, consultants may assist their clients with understanding and evaluating the nuances of individual ASC markets, such as complying with relevant regulations and gauging potential competition. “Sometimes, the client is so close to the situation that they cannot discern the strategic nuances,” Parrish observes. “Consultants should completely compile all relevant specific information that the client has not had time to analyze. Then, the consultant must also grasp the political environment for his/her client and help the client work through their specific situation.” Ortmann advises, “The consultant can resolve any issues regarding state regulations or procedures by personally visiting the offices of the various state government departments that have jurisdiction over ASCs. During these meetings, all governmental processes and procedures can be reviewed, and any outstanding state requirements such as certificate of need (CON) requirements can be discussed. The consultant can also contact managed care providers and state healthcare groups to investigate local competition.”

McCarville says that consultants may already have experience in that market or region, and thus may be familiar with the patient and payor mix. “Experience in helping clients get through insurance contracting and negotiation is extremely beneficial. You must get paid in order to operate the center! Experience with ASCs in numerous markets and states can give the consultant more insight and ideas on how to potentially set up the center more efficiently and economically.” Hollander adds, “The only way to comply with relevant regulations is to become knowledgeable about them. The Internet has made this accountability of the consultant much easier to find and utilize than 10 years ago. The way to gauge potential competition is to spend time at the site and listen to what is happening in the community by keeping an ear to the ground.”

Churchwell explains that consultants should follow a precise set of steps on behalf of the client. “Prior to development, obtain state rules and regulations for licensure. Contact the state to discuss their process, and investigate managed care market and any reimbursement problems in that area. Interview the physicians to learn more about the competition and do a good feasibility analysis prior to starting development.” Lambert adds, “In some cases, consultants will have direct specific experience maybe working with payors or competing against other providers in your particular market so that obviously provides insights into strategies that might work well.”

For their money, ASC owners and operators should expect a high level of service, industry experts emphasize. “They should expect routine communication and feedback on progress from all fronts of the project,” McCarville says. “They should not be surprised by an unexpected consulting expense. They should be ‘ready’ for state licensure and Medicare certification surveys within a few weeks of being given possession of the facility. Whether or not the state is timely on coming for the survey is sometimes out of your control.”

“I think you have to measure the individual results against what they committed to do at the outset of beginning to work with the group,” Lambert observes. “Because there’s a whole gamut of services that are provided or can be provided, you need to look at the breadth of what they said they were going to do for you and measure their performance.”

Staying on budget is a big issue for Churchwell. “The client should expect the consultant to keep all expenses within or below budget; increase cases through marketing to new physicians; ensure physician and patient satisfaction; have good reporting tools; and maintain timeliness in addressing issues.” Timing is everything to Parrish. “Commitment to a timetable for deliverables is important, as is a report delivered with specific, precise information that contains clearly defined options and action steps. And honest, accurate, forthright communication; in other words, ‘calling a spade a spade.’” “The excellent consultant should first have the experience and knowledge to select the other members of the development team, such as the attorney, architect/ engineer, equipment consultant and interior designer,” Ortmann says. “The consultant should openly and regularly communicate all aspects of project completion to the client, and immediately inform the client of any problems associated with the project.”

When it comes to justifying their professional fees, industry experts say that caution is in order. “There are many ways to handle this aspect of the negotiating process, but the reality is that fees are a sensitive area for the client,” Hollander explains. “Everyone wants the job done for less money. In order for the client to feel comfortable about his fees, then he or she must go through a due diligence process evaluating and receiving proposals from several companies before making a decision.”

“Be specific about what the client is getting,” adds Parrish. “Full disclosure up front eliminates any false assumptions and controls expectations. As with everything else in life, you get what you pay for. Make sure that the results are not shaded in order to get additional business. For example, a low-cost feasibility analysis may be a frequent indicator of using a ‘loss leader’ mentality to gain future, more lucrative business.”

“The consultant has access to a significant amount of information that the client will need in their ASC development,” Evans notes. “The FTE that it will take to do this project can be measured for a salary of the length of the development. The consultant’s fee will limit the need for this staff member. They also bring this expertise to the project to minimize problems during the life of the project.”

“Be completely up front about professional fees,” McCarville admonishes. “First, the client must evaluate if they have the in-house expertise and/or time to work on a development project — if not, what is the ‘value’ of that time. Second, creation of all forms, manuals, agreements, etc. is very time-consuming; also, what’s the value of that material? Third, can a consultant provide them insight or work with their architect to strategize on an efficient and effective facility? I hope so. Also, consultants can pass along volume discounts from vendor relationships on the equipment and supplies.” Lambert adds, “I think each developer or consultant needs to present a value proposition to their client that makes sense. They have to be delivering more benefit than they’re costing. The more benefit they’re able to deliver, the better.”

So, what do ASC owners and operators have to say about hiring industry consultants? Many report that they used a set list of criteria with which to evaluate various firms. “Experience, centers they had worked with, their track record, their likeability and their philosophy on work,” were important factors, according to Bill Hazen, RN, administrator of the Surgery Center of Pelham, in Pelham, S.C. “The reason we picked the one we did was they weren’t so ‘suit-and-tie.’ They were more down to earth. We thought they would be closer to the operations.” Thoroughness, and compatibility with the practice, the physicians, and with building the center was critical to Charlotte Austin, RN, nurse manager at Eye Surgery Center of Augusta in Georgia. That, and “the ability to be in seven places at one time,” she adds.

“National reputation, cost, and services provided,” says Carolyn R. Hollowood, RN, BSN, CASC, of Creve Coeur Surgery Center, LLC, in Missouri. “We wanted a company that was knowledgeable in all aspects of an ASC.” Patsy Usery, RN, administrator of Campbell Surgery Center, in Germantown, Tenn., adds, “They should have vast knowledge, as well as referrals and resources to answer questions. They need to have life experiences; it’s not about the book knowledge, it’s about the hands-on experience.” According to Michael Pankey, RN, MBA, administrator of the ASC of Spartanburg in South Carolina, “We wanted a no-equity consultant, and this limited the field. We also needed a consultant that could develop, manage and bill for the company; I outsource many of the services at the center.”

When it comes to the most critical questions that client facilities should ask during the consulting process, Austin says, “One of the most important is their reputation in the ASC community, as well as being able to see the project through to the end. In a most affirmative way, getting the client through accreditation and inspection with the least possible anxiety on the client, because they’ve got other things to worry about.” Hollowood emphasizes, “What experience does each consultant have in their area? I’ve heard of other companies sending in consultants with no knowledge in their particular field of expertise.”

“The amount of time they’re going to be at the center, their proven track record, whether their other centers are profitable, how many centers they have to evaluate, how many teams they have to evaluate, and how much time they have. If they have 25 centers and five teams, they are not going to be there every week,” Hazen advises. “That is the most important. As long as they have opened two to three centers, and their track record is good.” Usery adds her questions to the list: “Have they ever been in this position? Have they ever been an administrator? Have they ever worked in a surgery center from bottom-up, from being an RN up onto being an administrator? Can they perform those tasks that they’re teaching us?”

The nuggets of wisdom handed down to clients by consultants vary; ASC owners and operators report that they have received a wide range of industry advice. “Overall, having harmony within the system of employees and physicians; one of the things they do is push staff bonuses and positive employee incentives,” says Joan Marie Culberson, RN, administrative director of the Museum District Aesthetic Surgery Center in Houston, Texas. “Autonomy is given to the center’s management staff, which promotes learning and accountability,” Hollowood says. “They provide a safety net, which is invaluable to the center’s viability. Since I am a nurse, it was important to learn the functions of the business office.” Hazen reports, “We had to change our entire mentality; we actually went with an entirely different management structure. We had moved the in-house management team and it was changing the mentality to get away from the hospital-type mentality and changing to an ASC mentality. That was the most important thing we learned.”

Overall, ASCs tend to be satisfied with the level of service they have received from industry consultants. Austin reports that her facility’s consultant exceeded their expectations. “The consultant was able to foresee things that we never even thought of. She was able to see problems before they arose and we were able to head them off.” Hazen comments, “We are one of the most profitable ASCs in the United States, so I would say it was well above what we expected.”