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ASC In-Market Development: Driving Profits with the Right Procedure Mix
Kelly S. Craig, RN, BSN, is director, in market development, with Meridian Surgical Partners, which is headquartered in Brentwood, Tenn. She frequently travels from her home base in Austin, Texas, to work with selected ASCs to target growth opportunities. SurgiStrategies spent some time getting her take on ASC market development.
Q. How do you approach a specific market for development?
I first spend time in the ASC, meet the staff, and discuss the ASC and the market with the administrator. I also spend time in the OR to see how things flow, turnover and watch the staff work together. From there, I talk to physician partners about possible doctors to call on. I then begin my search and get the feel for the market.
Q. Do you have a set timeframe or goal in mind when you start working with an ASC?
As far as my assignments, they are usually ongoing and it takes several months to get your arms around what a market is like, the ASC I am covering, or how volume/revenue can be increased. Therefore, I don’t see a certain timeframe. It is always a work in progress. The common goal in every market is to increase volume, which will usually increase revenue.
Q. How do you share areas of responsibility when working with administrators?
When I enter into a market, I always work with the administrator on what physicians he or she has called on, last follow-up, introduction to staff and our current partners, discuss the market and their viewpoint of possible recruitment. From there, once I have started working the market, I will ask them to help me follow-up. Since I travel, it is important that administrators can make follow-up calls to the office either by phone or in person. Once a surgeon is credentialed, he or she can work with the office regarding scheduling, which is a vital part of making the surgeon willing to have a trial run at the center. I really rely on the administrators to make sure the first case goes well. I often ask them to have someone assigned to the new surgeon to make sure they feel comfortable and welcomed.
Q. What are some of your primary areas of focus?
Physician recruitment is my role so it is huge in my development efforts. If I can’t find “low hanging fruit" in a market, then I focus on our current partners to see if we are getting the cases we should see in our ASC. Once you have exhausted your efforts in recruiting, then you have to look at new service lines to bring into your center (for example: retina, lap band, spine, Medtronic interstim).
Q. Is there an ideal number of specialties you aim for at an ASC?
There isn’t an ideal number in my opinion. It is whatever will fit into our centers. Sometimes an ASC already has the equipment in-house to perform certain procedures, but they haven't focused on developing that part of the business. However, if we don’t have equipment for a certain specialty, then reimbursement, equipment analysis and all criteria for the specialty is reviewed. And of course, a center has to make sure they are getting paid for whatever “new" specialty they are trying to perform. Staff is also a consideration. If a center is “shorthanded," then expanding specialties would be difficult to start. As a general rule, the more specialties you have, the better.
Q. What are some of the key variables you consider when evaluating the potential profitability of new procedures/specialties for an ASC?
Key variables include: cost of equipment, return on investment, managed care contracts, supply cost per procedure, staffing cost per procedure, scheduling efficiencies for the center (options to open another OR vs. utilizing existing OR), length of time it takes for the physician to perform the case, and consideration of other more-profitable cases the physicians can bring.
Q. What’s your philosophy when it comes to an ASC’s procedure mix?
First, our philosophy on an ASC procedure mix is that it needs to be multi-specialty. This avoids the risk of having negative reimbursement pressure in one specialty such as GI. Second, orthopaedics or spine are good specialties to build upon. ENT, general and podiatry are typically good to add to a center. GI and ophthalmology can be efficiently added to a center depending on volume (needs to be high). Pain management is a low-cost specialty, however more and more physicians are performing these cases in their offices to receive higher reimbursements. Urology can be a good add to a center, but watch the costs, scheduling and physician surgery times. We tend to stay away from most traditional plastic surgery.
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