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39 Executive Briefing Sponsored by: Successfully adding a new ASC service line By Robert Zasa, MSHHA, FACMPE G rowth in most ASCs has resulted from dedicated physician owners who embrace outpatient surgery and continue to use and grow the types of surgery that can be performed in their ASC. These physicians have great pride of ownership. But as founding physicians age and mature in their practices, there is a natural drop off In the ASC's caseload. To continue to grow the ASC, it is imperative to generate new revenue streams by adding new physicians and or new services. To maximize profitability, most centers over the years have wrung out their operating costs in supplies, implants and purchased services through group purchasing and negotiations with vendors. Today, increased profitability must come from generating new revenue while continuing to carefully manage staffing and supplies/drug/implant costs. Revenue is the lifeblood of the ASC. Competition has grown in most cities for ambulatory surgery patients. There are now over 5,300 ASCs in the U.S. and the number is growing. This is due to the financial success of this model for providers and patients, and the high patient and physician satisfaction with the ASC's level of service. In this competitive environment, ASCs must distinguish themselves to gain more patients. Adding a new service line and demonstrating excellence in delivering that service are very good ways to boost profitability and competitive strength in the market. There are several new ASC service line opportunities arising from increased reimbursement. In the orthopedic area, total knees, hips and joints and hip arthroscopy are being added to the ASC service menu. New spine cases are being adding, including micro-discectomies, laminectomies and ACDF fusions. Interventional cardiology and radiology, and vascular procedures have been approved by Medicare and now offer good reimbursement. Other procedures, such as peripheral artery disease procedures, dialysis catheters, grafts and pain pumps, are also being added. If you are considering a new service line, several essential elements must be addressed and questions answered. How does your ASC properly assess the new revenue opportunity financially? Which new service best fits your market and the desire and expertise of the physicians involved in the ASC (there must be a match)? How does your sponsoring group of physicians implement the new service? In assessing a new service line, consider if your ASC has physicians willing and able to champion the new service and help it grow. Though obvious, without strong physician support, the service line may be good financially for ASCs in general, but not a good fit for your particular ASC. There must be a physician or physicians to champion the service. Second, consider if the service will fit well within your market. Are there other competitors already providing that service, and is there room for another (for example) spine center? Do your doctors have enough patient volume to pay for the costs of providing the new service and make it financially successful? What service lines are not being provided in your market area? Can you find physicians that are willing and able to provide those services at your ASC? Tap all your sources to find physicians for the new service. Doctor-to-doctor recruiting is especially effective. Your current physicians will know other good physicians in the area that may be interested in joining your ASC to work on the new service. There may also be surgeons offering the service elsewhere who are unhappy with their current ASC and amenable to moving their practice to a new ASC. This is often the case with younger physicians who do not have as substantial a percentage of ownership as their senior partners and want more return for their work. Recruiting physicians from failing ASCs can also be a good strategy, as long as you are careful. You must be sure these potential physicians have been good partners, have appropriate volume, and have a good reputation that has nothing to do with the failure of the ASC in which they partnered or used. Vendor reps interact with local physicians every day and know which physicians may be prone to move or are unsatisfied with their present situation. They can be very helpful in identifying new physicians that may be added to the ASC specifically for a new service. Target vendors that represent the new service line. Financial considerations are an essential part of planning a new service line. You must do research to determine in- and out-of-network reimbursement, starting with Medicare