Becker's ASC Review

16 ASC TURNAROUNDS How to Add Services that Increase Profitability By Robert J. Zasa, MSHHA, FACMPE, Managing Partner, ASD Management A n ambulatory surgery center is an active and living organiza- tion. It is not just a brick-and-mortar building or an estab- lished corporation. Factors within the ASC and its environ- ment are changing all the time: • Physician partners retire or relocate, and new surgeons come in • New technologies emerge that make new ambulatory services possible • Local demographics change or shi, presenting new opportunities • Competitors emerge and new services are added by existing ones • As the reimbursement game alters the winners and losers, there are incentives to change your mix of services. For example, Medicare added new reimbursement for ASCs that had been previously only paid in hospitals and doctors office based procedure room. and new reimbursement for new procedures moving from hospitals and some office procedures to ASCs While ASC managers find themselves in a state of constant change, they must also reassess ASC profitability on a routine basis. ey need to consider reassessing the mix of services offered. What an ASC offered three years, two years or even just one year ago may no longer provide the best return on investment due to changes in the Medicare list in the fall of every year. For example, as of Jan. 1, 2017, Medicare added a number of new ASC procedures that interventional radiologists, nephrologists and interventional cardiologists can now do in an ASC and obtain facility fees. is reimbursement change added a new list of specialists who previously were not interested in nor recruited to surgery centers. Managers need to consider "what's hot" as new services. Examples would be total hips and total or partial knee surgery for orthopedics. Many payers are now interested in paying for spine procedures in an ASC, and several payers offer bundled rates for such services such as in California. Other very good services to consider are hand surgery, vein programs, snoring cessation with sleep labs using the ASC at night, and paying the ASC rent, as well as "extra" programs in the space that may be contigu- ous to the ASC, such as 23-hour beds for spine designation. and women's diagnostics (breast, pulmonary, PAP, bone density, ultrasound). ASC managers must consider all of these services, because they can build the ASC business and enhance profits. An ASC manager must prioritize their best and most profitable services for the service area because most ASCs can't afford to add more than one or two new ser- vices a year. e trick is to recognize the options and then sort them out according to the particular needs and situation in the market. In ongoing assessments of ASC services, there are five questions that always provide a manager with important answers. 1. Who do you serve? e first answer must be: the physicians. While patients are important, not one will come to an ASC without a physi- cian's referral. And how oen will a patient be in the care of ASC nurses — perhaps three hours once every two to five years? e ones who return to the ASC every week are the surgeons. ey are who a manager must first turn to for ideas about new services to offer. e services at the ASC should complement the surgeons' spe- cialties and help the surgeons build their practices. e first tenet of marketing is to ask the consumer what they want and need. An ASC manager must constantly ask their surgeons what new procedures they want to offer at the ASC, or what new technologies may help the surgeon — and the ASC — see more patients. If the ASC is strong in ophthalmology, consider adding a YAG Laser and Lasiks or other equipment for cosmetic eye and occupational in- jury procedures. If the ASC is strong in GI, add or promote colorectal surgeons for colonoscopy and colon cancer screening, offering to help promote colon cancer evaluations. If the ASC is strong in urology, one should consider adding a dock for a mobile lithotripsy unit, incontinence and impotence procedures, and equipment to diagnose these types of problems. ese are examples of strengthening the ar- eas where the ASC is strong to keep a prominent share of the market. Because the ASC is strong in certain areas, one cannot suggest that a manager ignore other new options to grow the business. Once the manager has examined the existing surgeons' needs, they should look at patient demographics within a 20-minute radius of the ASC. What is the age, gender, activity level and health orientation of the patient population? At the same time, look at the physician population serv- ing that population and the competition for servicing them. Who is caring for patient groups that aren't already coming to the ASC, and how could the ASC attract those physicians to do cases at the ASC? 2. What do they need? Go to the surgeons and ask what they need. Make suggestions about services the ASC is considering adding. Get their input even if the service doesn't support their specialty; they may have good ideas to add, or point you toward someone who has tried to offer these services. When thinking about surgeons or physicians, the ASC would like to attract, consider contiguous services that would make life easier for doctors and their patients. Perhaps a women's diagnostics center would appeal to the general surgeons and GYN's in the area, plus build refer- rals for surgeries at your ASC. Several centers with extra space or con- tiguous space have converted that space to ancillary services to provide a continuum of services, not under the ASC license, but in space next to the ASC. Several states offer 23-hour stay, which increases caseload and, if offered efficiently, can add cases and profit to the ASC. Consider patients' lifestyles in the service area. Several types of demo- graphics could support orthopedics — active young adults, baby boomers and the aging population. If the ASC already has orthopedics and wants to attract more cases, consider offering physical therapy, massage therapy or a sports medicine clinic. A large senior population might be served by audiometry or low-vision services from the ophthalmologists. 3. Who else offers this service? Look at who else might be offering similar services in the community. What is the hospital offering for outpatients, and how are these services priced? Most ASCs can under- cut the hospital's fees. If the services are offered in the area, find out how demand has been. If a competitor is strong in this, the ASC can compete by offering more convenience or a discounted fee. If a competitor is weak, is it because of poor service, lack of convenient hours, high cost or simply because not enough people are interested in the service? Reimbursement is a fact of life and should be considered when selecting new services. Within these services, which procedures will be reimbursed, and what is the reimbursement level? Take a look at Medicare codes, and pay heed to newly added ones. For instance,

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