September 20, 2023

Whether you’re planning to break ground or expand, due diligence in these areas is a must.

TOUCH OF GRAY As a growing number of Baby Boomers advance in age and the market for orthopedic surgery grows, the nature of local competition and payor contracts will determine success or failure for many outpatient facilities.

Given Medicare’s addition of several orthopedic procedures to its fee schedule, an increasingly graying population and a post-COVID effect that has predisposed a sizable number of patients to stay as far away from hospitals as possible, the stage is set for leaders in the ortho space to capitalize by establishing or further growing this surging outpatient service line.

However, leaders need to do their homework first. Here are two critical questions whose answers will give you a better idea about whether building a new ortho facility or expanding an existing service line is a potentially profitable idea.

How saturated is your local market? David Uba, CEO of Excelsior Orthopedics in Buffalo, N.Y., says that if your local market is loaded with hospitals or larger ASC companies that own a vast majority of your region’s orthopedic surgeons, you could face an uphill battle to secure reimbursement rates sufficient enough to make your project profitable. Additionally, heavy competition can make it difficult to secure necessary patient volume. On the flip side, if your local market has room and opportunity to secure orthopedic surgeons and the patients they can bring, you could be sitting on a veritable goldmine.

As is often the case, market research is key. Gregory DeConciliis, PA-C, CASC, administrator of Boston Out-Patient Surgical Suites in Waltham, Mass., urges stakeholders to speak with local surgeons in the community to better understand what they are experiencing in terms of volume and reimbursement, as well get feedback regarding whether the area truly needs an additional orthopedic surgery facility.

How likely will payors be to negotiate? Of course, this question is a loaded one. Payors are far more likely to negotiate with savvy leaders who understand the importance of building strategic relationships. “You must know your payors and develop relationships with them if you are going to negotiate profitable reimbursement rates,” says Mr. Uba.

Additionally, reimbursements can differ significantly based on the specific procedures involved. For example, total joints procedures are currently quite profitable because the case costs are so much lower at ASCs than at hospitals. “But that is not generally the case for carpal tunnel procedures, which typically secure lower reimbursements, yet have the potential for higher volume,” says Mr. Uba. He says profitability often comes down to your ability to negotiate suitable reimbursement rates with payors for less costly ortho procedures.

Realistic, well-researched answers to these two questions will go a long way toward dictating whether or not you should make a move.

The “one-stop-shop” concept is becoming the gold standard for comprehensive outpatient orthopedic care.

THE WATER’S FINE Twin Cities Orthopedics’ Eagan ASC also houses physical therapy services, including a small swimming pool.

Convenience is a crucial component for success in outpatient surgery, particularly in terms of patient satisfaction. That’s leading to a growing movement toward patient-centered facility design.

Chris Bailey, PT, DPT, OCS, chief development officer for Revo Health in Golden Valley, Minn., believes everything about the surgical experience should be viewed from the patients’ perspective, starting with the actual physical design of the facility. When Dr. Bailey and his team opened the 76,000-square-foot Twin Cities Orthopedics Full-Service Orthopedic Center in Eagan, Minn., five years ago, the goal was to provide an all-in-one approach to orthopedic care by locating a surgery center, advanced imaging, PT and more, all under one roof.

The center has thrived as a result, leading Revo to use it as a conceptual blueprint for a brand-new project slated for a tiered opening starting this fall. It’s a three-story, 70,000-square-foot facility that will house virtually every service an orthopedic services patient may need, including a surgery center scheduled to open in early 2024, urgent care, physical therapy, advanced MRI imaging scanners and private care suites.

“Having a one-stop shop is important to the consumer because of the ease of access to high-quality health care,” says Dr. Bailey. “We see having the surgery center attached to the clinic, the care suites and all the postoperative therapy in one spot as a real driver of convenience for patients.”

Location also plays a pivotal role in the convenience equation. Dr. Bailey says all Revo facility locations are carefully chosen to meet procedural demand and increase patient comfort, and the new center is no exception. Located in a thriving Minneapolis suburb, patients can access it via familiar roads without needing to drive into the city. He says that not only makes the experience better for patients, but also logistically easier for family caregivers who transport patients to and from the facility.

Revo also focuses on the providers and staff who work at its new buildings during the planning and design process, from the locations to the design of the operating rooms and procedure rooms, as well as colocation of complementary services. “We know we cannot deliver the highest level of patient care without a highly engaged staff,” says Dr. Bailey. To that end, the building was designed with wider hallways, brighter corridors, more windows in the staff break areas and even access to employee-only outdoor areas where staffers can take a breather during a busy day.

“These things all add up to a more satisfied staff, and the patient is the one who benefits,” says Dr. Bailey. “I also think that competition in the market is important. As we build new facilities, the bar is raised for competitors’ new facilities, and when the bar is raised, ultimately, the patient wins.”

As ambulatory facilities across the country continue their evolutionary path, OR leaders look for partners and solutions that will help them on their unique journeys into the future.

Credit: Stryker
Whether you’re growing your ASC or building from scratch, Stryker’s ASC business delivers tailored solutions for where you are today and want to be in the future.

Making the business decision to change the footprint of your ambulatory surgery center (ASC) for planned expansion of surgical services is a big one. Just as big is the vision to launch a brand-new ASC in a community that has demonstrated a need for more surgical services in the region. Both require collaboration and teamwork to encompass the requirements of multiple stakeholders.

Procedures have been migrating from the hospital outpatient department to ASCs for many years, but that evolution has accelerated. With the potential to provide more than $55 billion annual healthcare cost savings, this shift in site of care is expected to continue beyond the post-pandemic environment. In fact, today’s ambulatory surgery market is booming with leaders of ASCs taking on the challenges of expanding their businesses, adding service lines, or building a new facility from the ground up.

Those ambulatory leaders and owners who choose to go on these exciting journeys know that multiple layers of planning are necessary – and the choice of partners is critical in the complex process. Stryker has deep experience in this evolving market, understands the challenges of ASCs and has delivered tailored solutions to hundreds of centers.

Every ASC is unique, and in fact, each center has its own unique blend of clinical, operational, and financial circumstances. Stryker offers a customized partnership with a dedicated team who starts by listening and learning about each individual ASC’s situation and future needs. Instead of selling a pre-determined solution, Stryker tailors a unique solution that will deliver an exceptional experience for ASC owners and ultimately patients who will be coming through the doors for their surgical procedures.

The process involves not only the logistics of creating a new space or center, but also the capital equipment requirements and analyses of the workflow needs that will spell success for the facility. Stryker’s customizable agreements allow facilities to acquire the capital equipment when it is needed.

Whether planning an expansion, transitioning ownership, or adding a sub-specialty, Stryker can help navigate all of these changes with a comprehensive solution to allow for strategic growth. It’s all about increasing efficiency in a new or renovated space with an eye on continued future growth as the ASC specialty surgical markets continue to expand.

Note: for more information go to Ambulatory Surgery Center (ASC) | Stryker