A Potential Boon

Gastrointestinal (GI) screenings and colonoscopies clearly save lives. Colorectal cancer is the fourth-most prominent cancer in the U.S., according to the National Cancer Institute.¹ Furthermore, it can be prevented over 90 percent of the time if identified early enough.

Adding GI services to help prevent this and other diseases can be a beneficial one for outpatient facilities and multispecialty ambulatory surgery centers (ASCs). A recent report from the Centers for Disease Control and Prevention showed of the more than 57 million procedures performed in all types of outpatient facilities in 2006, GI had the largest amount of any specialty, with over 14 million.² Among specific procedures, lower and upper endoscopies had the most performed, with 5.8 million and 3.5 million completed, respectively.

“The GI services are a high procedural volume service line with moderate reimbursement that is fairly easily deployed,” says John Poisson, executive vice president at Physicians Endoscopy. What helps to make GI easy to install in outpatient facilities is in the way the services are offered. “They’re not overly equipment intensive. They don’t require a large number of complex supplies,” he says. “So from an incremental service line add-on perspective, I think it’s a relatively cost effective line to safely bring in to your ASC.”

At the same time, Poisson points out, executives must carefully evaluate and set their expectations up front as to how their GI physicians will contribute to their ASCs performance while ensuring patient safety remains a top priority. “The key to our business is about volume and utilization,” he says. “I’ve seen a number of multispecialty ASCs out there where the GI groups have felt they’re getting the short end of the stick. They’re bringing in so much volume, relative to everyone else, that they feel they’re not getting their fair share.”

Along with the volume of cases on a daily basis, with the right kind of business planning, gastrointestinal services can be moderately profitable. While the Centers for Medicare and Medicaid Services has reduced their reimbursement rates for GI in both 2008 and 2009, an efficiently staffed and operated GI ASC can still be financially successful. Non-governmental insurance plans continue to recognize that the ASC remains a much lower cost environment than the hospital outpatient department,” Poisson notes.

The Economy and GI

So how is the current economic recession affecting GI and what should outpatient facility owners consider if they want to add those services? So far the impact upon GI services has been geographically spotty. Like the recession itself, certain areas of the country are feeling it more than others. GI services are probably viewed as being a bit more recession-proof than many of the other more purely elective-type surgeries out there.

With the increasing number of layoffs, however, the real impact may be eventually felt in most markets toward the end of the year, as health benefits begin to run out for a larger segment of the unemployed. Where this will come into play for gastrointestinal services is a reduction in the number of elective colonoscopies, Poisson acknowledges. “This is the type of procedure where standard screening could be pushed off for 90 or 120 days. But clearly if there are symptoms that could affect your health, that’s something you don’t want to play around with.”

What will be important for multispecialty ASC owners to look at is that any analysis of the GI service line is being performed in a fairly conservative manner. “Conservative volume assumptions are key, and analyzing the payor mix is very important,” says Poisson. “Everything needs to be fair and equitable, relative to the contributions GI will make to the future success of the center. Equity and productivity clearly can’t be related in structuring the business plan; however, the current owners and the new physicians need to reach agreement on business terms everyone can agree upon. ”

Potential Pitfalls

Besides the economy, another possible problem that could arise is case volume and the expectations that may follow. ASC owners need to be realistic when it comes to the respective volumes that new physicians could bring to the facility, Poisson recommends. “Generally speaking, most GI physicians can convert upwards of 75 percent to 80 percent of their total outpatient volume to an ASC, with the 80 percent being ‘ambulatory appropriate.’” The remaining amount of patients, he states, won’t visit an outpatient facility because they are either too sick, have insurance contracting issues or just prefer the hospital.

Another roadblock for GI services is block time and staffing. GI physicians want defined block time and a staff that’s capable of performing in the quick turnarounds and high volume of cases involved. “This is not a specialty where a case is started at 7 in the morning and finishes at noon,” Poisson indicates. “Many GI doctors start at 7 and they’ve finished with their 10th patient by noon.”

The Road Ahead

Poisson sees GI in 2009 and beyond going ‘back to the basics.’ While there are some new pieces of equipment and technology out there, “We need to perform the basic business fundamentals very well,” he says. “We need to execute them very carefully and consistently.”

Another potential long-term trend is the combination of GI and bariatric surgery, a service that’s gaining in popularity. While the two are clearly distinct from each other today, Poisson feels that may change in the future. “As the technologies continue to evolve, I see the GI physicians in many cases, aligning themselves much, much more with the bariatric surgeons. I think it’s a role that will be increasingly evolving to the point where the two are going to meet fairly commonly in the future.”

No matter what the case is, patient safety should never be sacrificed. “We’re in the type of business that can be reasonably profitable if done correctly, however we need to remain vigilant and we need to always make patient safety our No. 1 priority,” Poisson advises.

He also warns about evaluating prospective new GI physicians purely on volume. Although volume is an important attribute, the clinical quality of the provider, their ability to get along with other people, like the staff and other doctors in the facility, should be figured in, too. “A lot of times on paper, the (physician’s) volume will look very enticing. But if the whole package isn’t there, it’s probably not worth it.”

References

1. National Cancer Institute. What You Need to Know About Cancer of the Colon and Rectum. National Institutes of Health Publication; no 06–1552. Rockville, MD: National Center for Health Statistics. 2006.
2. Cullen KA, Hall MJ, Golosinskiy A. Ambulatory Surgery in the United States, 2006. National health statistics reports; no 11. Hyattsville, MD: National Center for Health Statistics. 2009.