Becker's Spine Review

24 Thought Leadership 5 spine surgeons' thoughts on investing in ASCs By Carly Behm A SC investment is top of mind for some spine surgeons as more procedures migrate to the outpatient setting. However, it might not be the best move for everyone. Here's what five spine surgeons said were key considerations when it comes to ASC investment. Usman Zahir, MD. ScopeSpine-e Orthopedic Group (Dulles, Va.): ere are five considerations I think about: 1. Structure of the ASC: A physician-hospital joint venture model reduces upfront liability and costs for a new startup. Such joint ven- tures can be collaborative, while also offering better managed care contracts. One needs to weigh this collaboration with the reduced physician control that comes with it and concerns regarding higher management costs. 2. Established ASC versus new startup: Established ASCs have costly share prices and oen few shares that are available, but they usually have a more predictable return than a pure start up. A startup ASC with low or nominal share prices may take years to be successful. 3. Knowing your partners: Established ASCs that have many passive physicians are a red flag. For startups, it is important to get a sense of what the true case volume is first, before committing. Many ASCs start with attractive pro forma statements, but if the surgeon partners are involved in too many ASCs, it might be best to move on. 4. Linking with other spine surgeons: An ASC with several spine sur- geons is attractive. Opportunities exist in such arrangements to part- ner together and work on creating a spine center of excellence. 5. Aim for the future: As many companies become self-insured, ASCs that can offer efficient, low cost and high quality services will excel. To reduce healthcare expenses, we might see more direct-payer models be- tween company self-insured plans linked directly with healthcare pro- viders that will exclude many carriers. is will reduce costs. We might not have a true free market in healthcare today, but we should still aim for it. Todd Lansford, MD. South Carolina Sports Medicine & Orthopae- dic Center (Charleston): Investing in a surgery center can be a scary proposition. While there are many upsides, there's much to be consid- ered. is can be from both a clinical standpoint, but also a financial standpoint. From a clinical standpoint, the center must be capable of handling spinal procedures in a safe and efficient manner. If the cen- ter does not feel comfortable, or does not have the proper setup, then there is no use going forward. Many centers may be able to handle these cases, but have not done so yet. is requires significant patience and time, but can be a great opportunity to boost a center. With this in mind, an ASC that is new to spine surgery can have a financial upside that may be higher. By bringing value to a center, you can take what could be lower share prices and have a greater return. In these situations, it is important to look to the future and obtain the ap- propriate number of shares for the value you will increase. If this is not the case, the potential for resentment can erode a positive relationship. A center that is already established with spine surgery will likely have a higher share price but will already be showing good returns. e contributions can still be felt, without the concern for feeling over- whelmed by being such a majority contributor. erefore, investing in the center is like any other business.e risks come with a reward. e only important factor is that the patients are never at risk. And therefore clinical safety and appropriateness are the No. 1 priority. Kern Singh, MD. Midwest Orthopaedics at Rush (Chicago): e first consideration is whether the ASC is located in a state that requires a certificate of need. If it does not, then it's less challenging to build a competing center, and these typically are valued on a multiple of EBITDA that is less than a CON state. Second, is if the center is prof- itable and what are the margins and specialities currently practicing in the ASC. ird, ask if the management team has a track record of success and has the center retained its surgeons, or if there was a high turnover. Fourth, will the center make sense geographically in regards to your practice? All of these are important initial factors. Steve Wray, MD. Atlanta Brain and Spine Care: I would consider the following factors most important in deciding to invest in an ASC: 1. Patient safety and experience 2. Efficiency 3. Staff and personnel 4. Leadership and partners Samuel Joseph, Jr., MD. Joseph Spine Institute (Tampa, Fla.): e key consideration in my mind is joining an ASC with like-minded doctors and administrators. e goal has to be the same: providing excellent and efficient care to patients. is allows economic and col- legial advancement with each surgery or procedure. e remainder of the considerations, such as location, shares and block time can be figured out through constructive dialogue when the physicians in the group understand both the healthcare and economic aspects of the ASC business. n 5 specialties with the most physicians at $5M+ net worth By Laura Dyrda At least 6 percent of physicians in five specialties have a net worth of more than $5 million, according to Med- scape's Physician Wealth & Debt Report 2021. The specialties where physicians are most likely to re- port net worth exceeding $5 million are: 1. Internal medicine: 9 percent 2. Radiology: 7 percent 3. Cardiology: 7 percent 4. Orthopedic surgery: 7 percent 5. Anesthesiology: 6 percent. n

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