Becker's Spine Review

Executive Brief: Paradigm Spine, Minimally Invasive Spine Surgery 15 Sponsored by: PARADIGM SPINE 5 Questions to Ask Before Transitioning Spine Cases to Ambulatory Surgery Centers By Heather Linder Linda Sanchez serves as both the practice director at the Center for Spine Care in Dallas and as the administrator for the Institute for Minimally Invasive Surgery, the center's affiliated ambulatory surgical center, managed and co-owned by Meridian Surgical Partners, LLC. She was integral in helping the Center for Spine Care develop a freestanding surgery center to perform as many procedures as possible outside of the hospital. Alice Doverspike is the administrator of Thomas Johnson Surgery Center in Frederick, Md. The multispecialty surgery center added spine procedures in 2008 before Ms. Doverspike joined the center, and she has helped build the program into a successful venture. Here are the five questions Ms. Sanchez and Ms. Doverspike recommend asking and exploring before bringing spine cases out of the hospital and into an ASC. 1. Do we have the appropriate cases and patients for a spine ASC? The first step in bringing spine to an ASC is to conduct a feasibility study. Ask questions such as: • ow many spine physicians are in the H group? • ow many cases is each surgeon performH ing? • hich of those cases can be done in an W ASC setting? • hat is the case load? W • hat is the patient population? W • hat is the payer mix? W Consider the patients, as well, Ms. Sanchez says. The majority of the Center for Spine Care's patients were coming from out of town or paying with cash. Creating an outpatient space for spine procedures is more convenient for patients traveling long distances to see a physician and more cost-effective for cash-pay patients, she says. To provide the best service for the patients, an ASC should consider a design that integrates the clinic and other ancillary services such as imaging, as part of a campus in the same location. Linda Sanchez "Our out-of-town patients don't have to go to four facilities for one procedure," Ms. Sanchez says. "While they are here, they can have an MRI or get pain injections. We examined all aspects to find a scenario that would be lucrative enough to keep us in business while being cost-effective and convenient for the patients." 2. What is the capital investment? You must detail the amount of capital required to successfully deliver the facility and allow for a nine to 12-month ramp-up of operations, including costs associated with interior tenant construction, equipment, and working capital. Ensure you raise enough capital for the crucial start-up phase and commit to the right amount of working capital in the beginning stages of planning to avoid future capital calls. Also, obtain a commitment for financing before starting the project. Rates may vary and non-recourse financing is virtually impossible to secure in today's banking environment. Financing will be contingent upon the strength of the financial projections for the business. It's important to raise enough working capital to have nine to 12 months of operating expenses covered. A proper plan allows the partnership to leverage with debt the tenant improvement construction cost and equipment, and invest cash to cover the working capital needed pre-and post-opening. don't want to bend on any of the tools they need and use on a daily basis." One way to save some on the initial investment is to work with vendors and supply representatives to borrow a certain supply for the first five cases and then negotiate a fee or to use a tool at a rented rate for a certain amount of time. "We have some reps we've worked with for seven-plus years," she says. "It's easy for us to talk to our vendors that we know and use all the time. They are willing to work with you when you have a relationship." Get clear on the capital investment, including equipment costs to ensure being in the best position when the surgery center opens. Ms. Sanchez encourages practice managers to consult with all the surgeons and a reputable equipment planner to determine what is necessary to purchase for the ASC. Having surgeons who know what they need and help create a bare-bones instrument set is also a big money saver, Ms. Doverspike says. For surgery centers with other specialties, she recommends building on the equipment already in use to avoid some of the up-front expense. Her surgeons use a large C-arm for other specialties and were able to put that in use for spine as well. "We bought everything we needed up front with the exception of a few tools," she says. "Our physicians utilize an O-arm navigation system, which is the most expensive piece we have. You "It helps to have the most expensive capital equipment being used by other specialties," Ms. Doverspike says. "Setting up a new specialty can

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