TRENDS
Sustaining market and revenue growth is a challenge facing many Ambulatory Surgery Centers (ASCs) and Hospital Outpatient Departments (HOPDs) today. Like all businesses, ASCs and HOPDs have a distinct life cycle. After five or so years in business, most experience a maturing or reduction in revenue growth. Even when your facility successfully captures a significant portion of the outpatient surgeries and procedures in your market, your outpatient book of business limits opportunity.
How Do You Generate Momentum?
The expansion of a facility's scope of services has proven to provide continuous growth opportunity. Subsequently, conversion has become a core strategy in growth sustainability across the country. Many healthcare facilities are converting their ASC business to a surgical or specialty hospital. While surgery may remain the core service, an expansion allows you to attract more patients by providing additional services.
Why a Surgical Hospital?
Patients are the heart of healthcare, and today's consumers place a high priority on accessibility, quality and personalization. In addition, cost efficiency has become a key driver in healthy facilities. The growth of surgical hospitals is a direct consequence of these market dynamics. As a hybrid business model, your surgical hospital can fill the void between ASCs and acute care hospitals. You can offer the same kind of efficiencies and advantages found at an ASC yet, unlike an ASC, your physicians can perform a broader range of both outpatient and inpatient cases in one location. This results in greater efficiencies, as well as the opportunity to provide a wider array of procedures to more patients.
A Range of Innovative Models
Surgical hospitals range from single to multi-specialty with various partnership models. Your surgical hospital should include a combination of medical specialties that best serves your community to ensure growth well into the future. Your facility should also offer a complement of inpatient and outpatient surgery, imaging and other ancillary services that puts you in the best competitive position.
Key Success Factors
Becoming a surgical hospital is a major decision. A successful project must include a well-developed and executed business plan that takes into account key factors such as organizational structure, legal considerations and financial obligations. Most industry experts agree that selecting a corporate partner with proven experience in developing and managing surgical hospitals will maximize opportunity and minimize risk. Your partner should clearly understand the upfront legal aspects and state licensing requirements, but also the ongoing operational components such as managed care contracting, space planning, 24-hour staffing and clinical pathways.
Based on industry data and real-world case histories, a successful surgical hospital conversion begins with thorough market analyses that determines your community needs and scope of services. In addition, a financial feasibility study should be conducted to establish your projected patient volume, procedural case mix, revenue per case, medical specialties, SWB (salaries, wages & benefits), building and equipment costs and other variable costs. The more due diligence you perform in the front end, the greater the chance for success on the back end.
Carpe Opportunity
The future remains full of opportunity for enterprising professionals in the ASC market. The key is to continually evolve your business plan to sustain momentum. Conversion or expansion to a surgical hospital is a proven method of growth sustainability. In fact, surgical hospitals are the fastest-growing business model in outpatient delivery today because they allow you to satisfy the needs of patients, physicians and health systems and establish a solid foundation for long-term financial success.
Written by Denise Mayhew, Vice President, Physician Partnerships, Nueterra Healthcare