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Dawn Pfeiffer – Ask the Expert: Best Practices for Opening a New Surgery Center
130 Plays1 year ago
This is a special LIVE edition of This Week in Surgery Centers!
Dawn Pfeiffer is the Director of Integration at Regent Surgical Health and a tenured ASC consultant. She has had a hand in opening many successful surgery centers, so we spent an hour with her covering as many best practices as we could and exploring effective strategies for a smooth process and successful opening. Together, we addressed common challenges, shared proven solutions to avoid missteps, and answered questions on the fly from those who attended live.
We covered the following and more:
• Feasibility Assessment: key components, CONs, red flags
• Facility Construction: planning, finding an architect, inspections
• Regulatory/Certification Process: state licensing, accreditation, life safety issues
• Payer Contracting: timing, negotiations, terms
• Quality/Clinical Preparation: reporting, initial clinical hires, staff recruitment
• Business Preparation: capital equipment, vendor contracts, software selection
• Opening & Marketing Ideas: community education, media coverage
• Continuous Improvement: QAPI, benchmarking, new technology
Interesting in learning more about opening a new surgery center? Check out our two previous episodes:
• Michael McClain – Opening an ASC: Navigating Payer Contracts
• Wil Schlaff – Opening an ASC: Conducting a Comprehensive Feasibility Assessment
Brought to you by HST Pathways.
Recommended
Transcript
Introduction to the Podcast
00:00:01
Speaker
Welcome to This Week in Surgery Centers. If you're in the ASC industry, then you're in the right place. Every week, we'll start the episode off by sharing an interesting conversation we had with our featured guests, and then we'll close the episode by recapping the latest news impacting surgery centers. We're excited to share with you what we have, so let's get started and see what the industry's been up to.
00:00:27
Speaker
Hi, everyone. Here's what you can expect on today's episode.
Guest Spotlight: Dawn Pfeiffer
00:00:31
Speaker
So last week, we held a live online event with Dawn Pfeiffer. Dawn is the Director of Integration at Regent Surgical Health and an ASC consultant, and we spent an hour with her covering best practices for opening a new surgery center.
00:00:47
Speaker
Having done this herself many times, Dawn shared effective strategies for a smooth process and practical advice based on her own firsthand experience. Dawn also has 25 plus years as a nurse under her belt, so her clinical background mixed with her business background really makes her the perfect guest speaker to cover this topic.
00:01:08
Speaker
And as you may have noticed, we have been focusing our most recent episodes on tips and tricks to successfully open a new surgery center. So we will continue this series into October.
00:01:20
Speaker
covering topics such as the regulatory and certification process, how to find your dream team, clinical preparation, what to do when you're 30 days out, and a lot more. So if you know anyone who is daydreaming about starting a surgery center or is in the process of doing so, make sure to share these episodes with them as there's so much to learn together. Hope everyone enjoys the episode and here's what's going on this week in surgery centers.
00:01:51
Speaker
Before we jump into the poll and some other things, do you mind just sharing a little bit more about yourself and the experience you bring to the table today? Sure. Thank you, everybody, for joining. I know you're taking time out of your schedule to listen to the conversation. So thank you very much. And thank you, Erica, for having me. So my name is Dawn Pfeiffer. I am a registered nurse. I've been in the nursing field for 25 plus years. I'll just say that to not age myself for everybody to know.
00:02:19
Speaker
I've been specifically in the ASC market for the last 20 years. I do currently work at Regent Surgical Health and I'm director for their integration process. So I help take the projects from syndication and maybe a step or two before syndication, but syndication all the way through accreditation with one of the accreditation bodies. So we're gonna kind of cover that scope today to be able to answer some of your questions. Again, it will be high level, but we'll have a lot of fun and we'll see what we can get shared knowledge.
00:02:48
Speaker
Thank you, Dawn. And I just wanted to share this slide with you as well. I always think data is interesting. But again, as you remember, during that registration process, we had asked, is there one specific area that you wanted to focus on and learn more about? And the other day, I went in to pull the data and see which direction we should take the conversation. And as you can see, it was pretty evenly split.
00:03:17
Speaker
So regulatory and certification process did win out a little bit, but I was really hoping we would be like, okay, we'll just focus in one area, but nope, so we're gonna cover them all today. And then last request here, so I'm gonna issue a poll. If you don't mind just taking a second, give everyone about 30 seconds to fill it out. I'm just curious with the people we have on the call today,
00:03:45
Speaker
um, where you are at in your journey. Um, and see if we can even continue to tailor the conversation even further that way. Okay. Just give everybody about 10 more seconds. We have about 70% participation. So let's see. We can get to a hundred. All right. I'm going to end the poll and share the results with all of you just so you can see them.
00:04:13
Speaker
Um, so it looks like a lot of people are here just to kind of learn more. Um, but we do have a bunch of people that are within two years of opening one year, three months, which is very exciting. Awesome. All right. Thank you to everybody for sharing. Okay. Let's get into it.
Feasibility Assessments in ASC Development
00:04:33
Speaker
Let's start with the feasibility assessment. And also, Dawn, in your experience, what are some
00:04:39
Speaker
common drivers that you see why somebody wants to open up a surgery center? Sure. So the way the market is today, we find that a lot of physicians are looking at surgery centers as another source of income for their portfolio. Selfish reasons are not. Physicians are usually business people are looking to invest into surgery centers. So one of the big
00:05:06
Speaker
common denominators that we have is physician ownership. Because a surgery center is not like a CVS on the corner. If you build it, they're not going to come unless there's physician involvement and or hospital involvement if you're doing like a joint venture with a large healthcare system. So that feasibility is important when you're doing the assessment because, like I said, it's not like a consumer is just going to walk in and go, oh, this looks like a new surgery center. I want to have my surgery here.
00:05:35
Speaker
It's usually always directed by a referral from that physician. Gotcha. That makes sense. And with the feasibility assessment, again, I know this is kind of a beast in and of itself, but what are the key components of every feasibility assessment? Sure. If you want to know that the physicians who are interested in the project have the volume and the cases that are qualified to be done first off in an outpatient surgery center,
00:06:01
Speaker
and the patient selection and criteria that's being done in an outpatient surgery center. It's very different for a physician to say, I want to invest in a surgery center and I can bring 100 cases a month. Well, you have to dig into it a little bit deeper. Are the 100 cases a month that you're going to bring me? A, are they on the Medicare fee schedule for an ambulatory outpatient center? And then you have to drill down a little bit further. What is your patient criteria like?
00:06:28
Speaker
So we do have stipulations of types of patients that can be done. All of that has to be put into your feasibility to make sure that the volume that the physician say they can bring is truly the volume that you can expect. I always try to tell everybody, try to remain as conservative as possible. When you're looking at those numbers, it's better to have a physician tell you they want to bring 100 cases. And then by the time you drill down into your homework, it may be 50.
00:06:55
Speaker
then they surprise you and they have 75. So it's always a win if there's more, to be very detrimental to the business. If they say 100 and then truth be told, it's maybe 20. Because you've projected budgets and numbers and operating capital off of their numbers. One of the red flags of the thing that we want to look for, right, when we're building and looking at these feasibility assessments, is the physician owner interest in other surgery centers in the market.
00:07:22
Speaker
And also whether they are in any non-competes with larger hospital systems or other entities in the area. So, you know, physicians have the one through third rule they have to participate by. And so if they have ownerships in six centers around, so there's no way they're able to adhere to that one third rule. So it's things like that that you want to be careful of. And also physicians who just maybe want to buy in,
00:07:50
Speaker
for the distributions that will come later to that surgery center that are just interested in buying in that maybe don't have the volume to support being a true partner. And so those are the things that really take full effect when you're looking at that feasibility of do we have a project? Is it really capable of fruition and becoming a profitable center within 18 months of opening?
00:08:15
Speaker
Gotcha. And so it sounds like when they're working on their feasibility assessment, the physician piece of it is really the core of it. And then that's how you determine potential revenue, expenses, relationships, et cetera. Yeah, absolutely, Erica. That is very, very important is to have engaged physicians who want to participate not only in the survey center,
00:08:38
Speaker
but bring the volume and bring the right patient criteria there so that they're not putting a liability on their other partners or any other management companies that are involved by bringing in the wrong patients or over inflating what they're capable of contributing to the partnership. Gotcha. That makes sense. And for someone who has never done one of these assessments before, how long should it take them to do it? Should it be something that
00:09:04
Speaker
holds them up. Can you overcomplicate it? Can you undercomplicate it? You can do both. It really depends on how fast the physician wants to turn the data around and how engaged they are. We'll have some physicians that we'll talk to yesterday and today when I woke up in the morning, I already have their numbers in my mailbox. I have other physicians that I have to hound down after we've met with them and said, hey, you promised me these numbers. I haven't seen it yet.
00:09:31
Speaker
So it just kind of depends, you know, in all reality, it's usually a four or six week process. If they're willing to give you the data, they have the data to come out of their practice management software, right? To get the data to know what their CPT codes are. And then you run it against, you know, the Medicare fee schedule. And then again, to see how further down you can drill, then you have to add the layers inside of there. What is their ownership? Do they have any other ownership in other centers? Is there any non-competes in place? And then all of that has to be taken into account
00:10:00
Speaker
or you can truly come up with a solid performance and projections of what their investment and potential could be into the service center.
Navigating Regulatory Requirements and Financing
00:10:09
Speaker
Gotcha. So one theme I saw a bunch in the questions that we received was around the certificate of need process. Any recommendations for streamlining that process or making sure that you have enough information to get your application right the first time.
00:10:27
Speaker
So yeah, it is really a, so there's only so many states that have this certificate of need. Some states do, some states don't. So it's very important to know that if you are in a certificate of need state, to know what those rules are. And one of the things we do here at Regent Surgical is we use a CON consultant in that state. We have found that it's worth the extra spend. They know the state regulations. They know the process. They know the timeline.
00:10:55
Speaker
that's involved in those processes and all the legal hoops that you have to go through. So that's one of the recommendations that we make is that if you are in a strict CON state, it may be worth talking to a CON consultant in that state that you're going to open the Survey Center to make sure that you can meet all the timelines and the requirements. It can be very extensive, right? So we have a project ongoing right now in New York
00:11:21
Speaker
And that CON process is extremely extensive. We just passed the CON process in Illinois. That one was less intense and less restrictive. So again, but in both states, we've had a CON consultant, one in New York and one in Illinois. And we're a management company, right? But we still do rely on strong consultants that specialize in their area to help us through that process.
00:11:47
Speaker
It's interesting too that you mentioned just consultants in general. Do you recommend at this point bringing on, so obviously consultants for the certificate of need process, but just consultants in general at this point, whether it's an independent consultant or more of a company or whoever, like getting help at this point, is this really where you should start evaluating your weaknesses and lack of knowledge and where you might need support?
00:12:14
Speaker
I do, you know, take a grain of salt. I do work for a management company and I have a consulting firm. So however, what's important to remember is that it depends on the experience of the physicians and possibly your practice administrator or whoever's coming to the table with you to build the surgery center is what experience do they have that you can leverage, right? And if you have a bunch of great physicians that maybe have not opened multiple surgery centers
00:12:42
Speaker
or have not opened one in the last five or 10 years, or just don't have the bandwidth to it, then it may be in your best interest to hire either a consultant or look at talking to a couple management companies to figure out what is the best options and opportunities that you have out there. I know there's a variety of different management companies out there. So I think some offer like a full service, some you can do like Alucard,
00:13:09
Speaker
So I think you just have to see where your weaknesses are as a physician group that's going to open the surgery center and then just kind of wrap around the services that you need to fulfill those gaps in knowledge that you have to open a certain center. Sure. That makes sense. One question that that came in, you covered this a little bit, but how do you decide on what surgical services to focus your opening efforts on?
00:13:34
Speaker
So it really depends on the type of physicians that you're bringing in that are partners, right? So if you're opening a multi-specialty surgery center, then everything from your blueprints to your design to the way your performance is all set up is based off of those case volumes and those specialties that you're bringing in, right? So if you're doing I's or ENT or GI, those are very high volume type of lines of specialties. And so that, but the revenue
00:14:03
Speaker
reimbursement on it may be a smaller. So at that point, you're looking at volume, right? So you have to have a significant volume to make up a profit margin. If you're doing total joints and so forth, then you have to look at that. So all of that has to be considered early on in that feasibility study and the group of physicians that you're surrounding yourself with when you're gonna build this surgery center to know what kind of specialties you're in there. All of that will affect like the blueprints behind them. These are examples of different types of surgery centers
00:14:31
Speaker
on specialties and non-specialties and multi-specialties and cardiovascular. So all of it kind of depends on what you're going into, what type of cases you're going to do there and what the future is for that. I always believe in building futuristic surgery centers and never get yourself pigeonholed that if you only build a GI center, that's all you can ever do there. Because what if your market changes in two or three years and you want to look at bringing in
00:14:58
Speaker
or expanding your ability to offer services at that surgery center. Just something to think about when you look at design and so forth at your center. Got it. That's great advice. One final question here, and then we will keep moving just for the sake of time. Financing. Any tips or recommendations or gotchas when it comes to financing the surgery center? Sure. Start early. That's all I can say is start early.
00:15:25
Speaker
Shop around the rates. Don't just go with one bank. Look at your national banks. Look at some of your local banks. You need to have that conversation with the doctors early on if they're going to be holding personal guarantees with money coming into the project, which most of them will have. And so start that financing piece often and make sure you shop around for the best options out there for loans, whether it's a construction loan,
00:15:54
Speaker
and an equipment loan, whether you're going to tie those two together. But then also one thing, and one of the biggest mistakes I see in surgery centers is people don't put enough into A, capture the current cost of construction that we're facing in today's world, but also the operating costs. And we're going to talk about it a little bit more in a couple of slides from now, but that operating costs, once you go through your accreditation, but before you're getting revenue in,
00:16:19
Speaker
You have a gap of time there where you have staff hired, your buildings open, operational, you're paying your electric and your light bill and your HVAC bill, right? But you don't have revenue coming in. So you need to make sure that you have enough operational cash. And we call it a cash burn analysis. So know what you're going to spend and then some, you will find I'm probably a little bit more conservative than most people in the market. But again, I would rather have a conversation with my physicians to give them back money because we've got revenue in sooner.
00:16:50
Speaker
that I would have to go back and go, I am so sorry, but I need to do a cash call because we weren't prepared for this. That's just a conversation no one likes to have, especially very early in a project. So take it out a little bit longer and give your doctors back the money. Perfect, great advice.
Designing and Building Your Surgery Center
00:17:07
Speaker
All right, so feasibility assessment goes great. We are ready to start constructing and planning. We are ready to start. Tell us about this process.
00:17:18
Speaker
I love construction and planning. Who would have thought all those years ago in nursing school that I would love construction, but I've learned all kinds of things about construction. So you're right. We've, we've done the feasibility. So let's just pick on, we're going to do a multi-specialty ASC the rest of the presentation. So we'll kind of focus that way, right? So we're going to build a multi-specialty surgery center. We've decided based on the feasibility of the numbers that it's going to be like four ORs and one procedure route.
00:17:44
Speaker
So now that we kind of have an idea, we've got to find the right real estate. We have to know if we're going to rent space or if we're going to remodel a place or whether we're going to go into something called a green space. We're going to build from ground up, right? Found a lot we're going to build, right? So the physician group should have decided during that feasibility whether they're going to own the real estate or rent the real estate. Most rent it, but there are some out there that own it and that's wonderful. Keep the two separate things, the ownership separate, right?
00:18:15
Speaker
So have a business license if you're going to own the building that operates the building. The ASC physician owners should have just a tenant lease inside of the building, okay? It's important to keep those two things separate. So then the biggest plan that you have is finding the right architects and finding the right engineering firms. You want an architect, you're going to want to do the interviews. I know everybody says, do you really still do interviews today, Dawn? I absolutely do.
00:18:43
Speaker
Do the interviews, talk to the architects, ask the tough questions, and don't be afraid to ask the tough questions. Even if you're a nurse and your doctors have tasked you with doing this because you're running their surgery center and you want to build a new surgery center, ask the tough questions. How long have you been doing this? How many surgery centers? And I don't want to know about hospitals or HOPDs or MOBs or dialysis center. That's great. How many independent surgery centers have you built in the last three years?
00:19:12
Speaker
asked to see where those are, asked to talk to the administrator of those centers. You want an architect and you want an engineering firm that does ASCs all the time. There's a difference between those who do it some and then those who do it all the time and you want to go with the ones that do it all the time. It makes your job a lot easier and you'll have a lot less stressful sleepless nights if you if you decide to
00:19:38
Speaker
Physicians are wonderful. I love physicians, but they always have a brother, cousin, somebody who went to architect school who can design it on the cheap. Those are the conversations you want to avoid. Smile, be nice, entertain it. Thank you. I'll call him. Meanwhile, you stay focused on the correct ones that are in your marketplace and do this for a living. Yeah.
00:19:58
Speaker
That makes sense. Yes. One question that did come in, what recommendations do you have to expedite the design and construction phase? It sounds like going with an expert would help, but going with an expert helps. Having friends in the industry, emailing me, having connections through ASCA and things like that is really saying, hey, listen,
00:20:22
Speaker
we're looking at a 16,000 square foot 4OR, does anybody have a floor plant that you love, right? You can just put that in your ask a membership thing and just, there'll be people who'll say, oh my God, I love my surgery center, or oh, don't do this, I don't want to ever do that again, right? And so just kind of asking around and then once you engage with that architect, it's totally okay to say, listen, I asked a couple of friends, they love their surgery center, this is what it looks like.
00:20:49
Speaker
And sometimes that can help. Now I will tell you not all the times. Usually when we start a project, it can be three months by the time we sign the contract with the architectural firm and we get final drawings, what they call issued out on CDs. It takes that length of time in there. The only way to shorten that time is if you go with a templated design that the architectural firm already has that they're just charting out these ASCs and they might be able to cut some of that down. It doesn't cut it all down.
00:21:19
Speaker
but it could cut off a couple weeks here and there. That's good to know. Someone had just asked, how many bids do you recommend getting for construction? For construction, I usually interview, again, I know I'm an old school member that 25 plus years, I'll just leave that there again. I usually entertain two to three GCs construction firms, again,
00:21:43
Speaker
I'm very particular, if they've built a Kohl's, love to shop there, but I don't want you building my surgery center, right? So I will specifically interview two or three general contractors that all they do is healthcare and they do ASCs also. And they've done ASCs again, four to five in the last two years. If they've not done four to five in the last two years, I don't even entertain them. So again, interview, talk to them, figure it out, make sure they're in the market.
00:22:13
Speaker
One thing I've learned about doing ASCs, ASCs is just a really tight, compact hospital, right? So we can't share HVAC, we can't share electrical, we have to be solely contained. And on a complexity level, an ASC on a scale of one to 10 on complexity, an ASC design and engineering is about an eight, and a hospital that does open hearts and all that is about a 10, right? And so you have to remember
00:22:43
Speaker
you want to interview and select your best candidate because your complexity level of an ASC is really up there. And it is a complex build. And so you only want the right partners in there. Interview, ask the questions. You don't know what to ask. Send me an email. I can tell you what to ask. So I sometimes, I do have a couple little cheat sheet questions as a nurse that I've come up with. And it kind of lets me know right away if that GC knows what I'm talking about. And if they don't,
00:23:11
Speaker
i'm out, thank you very much for the conversation, but I ended right there. I love it that's perfect I imagine with your background it's just leads right into this and being able to really ask those right questions and we doubt people who know what they're what they're talking about. yeah. Perfect anything else about construction before we we move on.
00:23:32
Speaker
No, enjoy wearing a hard hat, get you some still-toed shoes. They have them now in tennis shoes and they're so much better than the boots. Oh, that's actually very good. They're like $50 on Amazon. They're worth it versus those nasty boots. God, you got to get an Amazon affiliate link and we'll send it out.
00:23:51
Speaker
Okay, so this, we got a lot of questions about the regulatory and certification process, mostly just about how to make it go faster. But starting at the top here or wherever you would like to start, what are the best things to know about going through this process? You know, we're kind of relooking at this process internally at Regent, just lessons learned throughout the years. One of the very first things that I recommend is you've syndicated, you have a group of doctors,
00:24:21
Speaker
who want to build a surgery center, we'll just pick on, well, we won't pick on Tennessee because we're a CON state. So we'll pick on Texas. They're not a CON state. So you have a group of doctors, da-da-da, know right away, even maybe before you syndicate, but definitely after you syndicate, get in touch with your state licensing first. Figure out what your state licensing rules are to open an independent ambulatory surgery center. Again, whether you're joint venture or not, but to know what your state regulations are.
00:24:51
Speaker
From there, you can kind of make yourself a tracker to say, OK, I have to submit this license 90 days before opening. So then you kind of pull back and say, OK, this is the date I've got to submit my state license. Then you have to know what accreditation body you're going to go to. Because most ASCs, I've never heard of one.
00:25:15
Speaker
None of them are going to wait that year to 18 months for the state to come in and accreditate you. And some states don't even offer that anymore. But no one's going to wait that 12 to 18 months that takes the state. So most people are going to go with either Joint Commission or AAA or QA or somebody. So then know what that application time is, right? So then again, put that on your calendar. Just know, okay, when do I need to submit that application for my accreditation, okay? And then you've got to do your 855B.
00:25:44
Speaker
for your Medicare number, right? So that's good for six months, but it takes about 45 to 60 days to get it approved. So you have to kind of build yourself a chart, right? I call it a pull chart because we use that term a lot in construction. You kind of have to build yourself a pull chart and say, okay, based off of what the state says, this license is due here, this accreditation one's due here, the CMS is done here.
00:26:10
Speaker
Now, while you're figuring out the timeline for all your regulatory and license and stuff like that, you've got to get ready to say what the state of, so remember, we're picking on Texas right now. You've got to know what Texas state regulations are and when the Department of Health comes out to inspect and what they expect to see that day. Every state's a little different. Some want you to be fully ready to see patients the very next day. That's the state of Texas, right?
00:26:39
Speaker
That means your crash cart's stopped, your staff is hired, you have your DEA license, all of that stuff. Other states, not so much. So that's why that call to the state early is so vital to know what their expectations are throughout the inspection process. Joint Commission, AAA, Quad A, they're all about the same on understanding what that guideline is.
00:27:05
Speaker
Once you determine what accreditation body you're going to go with, buy their handbook. Go ahead and tell your doctors, you need to buy the $200 or $300 book. Do it. I'm old school. I want the book. I don't want the PDF. I want the book. I'm going to color, highlight, circle, mark. Buy the book. Just expense it. The doctors will appreciate it later. There's great worksheets and tools in there that will really highlight what their process and what they're looking for when the accreditation process comes in.
00:27:35
Speaker
That kind of covers the CMS certification process because they kind of go hand in hand. Just remember that 855 application is only good for six months. So that's where understanding your construction timeline, like we talked about on that other slide and understanding a good GC, that timeline and when you submit that 855B application are vital because it will expire after six months. So you don't want to submit it too soon.
00:28:05
Speaker
They usually won't get to it for 45 days. So there's just that window there. So you have to kind of time when you expect to see your first patients and that's your first 10 free patients for accreditation,
Credentialing and Payer Negotiations
00:28:17
Speaker
right? So understand the difference there. With medical staff and accreditation, you're going to start that before you even open. And a lot of times we're chasing doctors, nothing personal. If there's any doctors listening, I do love you guys, but
00:28:33
Speaker
Sometimes they're not the best at turning in their paperwork. Some have to ask their wife or their ex-wife or whoever where their social security card is and where their medical diploma is. Some of them realistically think, oh, just call the hospital, Dawn, they'll give you my full credentialing packet. It doesn't work that way, right? So I recommend starting that medical credentialing process early because you're chasing the doctors a lot for paperwork. So
00:29:01
Speaker
I would start that six months before you open myself, just because it is gonna take you a couple months. I've never had one doctor give me an entire thing I need on time. The certificate of occupancy is a very, very important date to know. Again, you will work with that GC to figure out when your certificate of occupancy is. And that's a fancy word. You hear some people call it the COO or the certificate of occupancy or when you can take possession of the center. That date's important because legally,
00:29:31
Speaker
You can't have any staff working in this space until you pass that certificate of occupancy. Some states did a little bit of give room there, but you're really not supposed to because that's when the state and the fire marshal are coming in to say, hey, this space is safe for truly occupancy is exactly what it says. So just know what your state and your city requirements are before you just automatically assume
00:29:56
Speaker
They're almost done with my office. There's still a little construction going on. I can move in. That may not be true. So know what your state and your city says. And life safety. The best thing I can tell people is you just got to get in there and learn it. Don't be intimidated. I was for years. Don't let that I'm a nurse. I don't know the electrical boxes or I don't want to touch that big gray box because I think I'm going to get electrocuted.
00:30:21
Speaker
The best thing you can do is when you start your very first de novo and you start your very first remodel or whatever you're doing is step outside of your comfort zone and start asking the questions. Hey, what is that box? Can I touch it? How do I open it? What's inside of here and so forth? The more you expose yourself to the life safety regulations, the more you're able to keep your building safe
00:30:47
Speaker
your employees safe and your patients safe. And at the end of the goal, that's what matters. So we have to get outside of our comfort zone to know what we need to be looking for. I have a couple cheat sheets I've made that translate life safety codes to nursing codes that we understand to say, okay, what? So again, if you want to email me, I'm happy to send that to you, but I've kind of translated like this and an electrical term means this and over here,
00:31:16
Speaker
That way, when I talk to a life safety inspector, he says, where's this, whatever, whatever, I can go, oh, it's right on here in L2 and life safety panel this. And then they're like, okay, usually once they figure out that you know a little bit more than their average, then it breaks the rest of your inspection go a little bit easier. Yeah, it's interesting because we got a lot, a couple questions about life safety issues and
00:31:42
Speaker
kind of what to know there specifically. And I don't have a clinical background and I had to look it up myself. I'm like, what are all these life safety questions coming in? But it makes sense. I was reading through it. I'm like, oh my gosh, there's so much there. It is. Yeah. And I've had surveyors in my past tell me that you have to open the battery thing to test the battery acid. No, you don't. So you do not. And you don't want to do that. And that's a huge OSHA violation. There is a different type of battery that you have to have in your generator.
00:32:12
Speaker
But when the generator guy or girl comes out next time to do your check, just take a time outside, kind of go outside to learn about this generator. Don't be afraid to learn about it. Know how to open it. Know where the emergency switch is. Know what the battery that they're talking about is. Ask the right questions. The more you ask, the more knowledgeable you'll be. The easier your life safety inspection will be. Perfect. Thank you, Dawn. I wish we could actually ask about 20 more questions here.
00:32:40
Speaker
Let's keep it moving here. So payer contracting was another hot topic here. When should you really begin these conversations with payers? So you can notify the payers early that you have syndicated about six months before you open. You can just notify the payers in your marketplace. Hey, we are opening a new surgery center. Here's our name. Here's our doing business as this is our location.
00:33:08
Speaker
So you can do that introduction to your payers early. Most of the time, you're not going to get really far down the negotiated role until you get through your accreditation, where you can start negotiating rates. Some payers will negotiate with you a little bit earlier, some will not. So it's really driven by the market. So know your marketplace on what your payers will and will not do.
00:33:34
Speaker
And if you don't have a great person to negotiate contract rates, this may be where you pull in a resource, hire a consultant to a management company. Something, right? Because those negotiated rates are so vital to get right the first time. To go back and renegotiate those afterwards is painful at best. Because sometimes there's a clause in there.
00:33:59
Speaker
that said you can't renegotiate for a certain period of time. And so you want to be very cautious of that. So just know the rates and know the process. And again, if you don't have that skill set, it is a very different skill set. I would never negotiate a peer contract because this is not my wheelhouse. I would reach out to another consultant or someone else in my management company that would say, hey, this is how we're going to do it because this is the gist of what the rates are in this marketplace.
00:34:29
Speaker
So and then just learn to speak the language of what is a network out of. Sometimes I look at my insurance, my personal insurance on my network. I don't know. I call on the typical patient. I call and go, do you take my insurance? Right. So and understand that language, because that's going to be important very early on. So after you open your surgery center and you get the little famous letter from
00:34:57
Speaker
An accreditation body says we're recommending you for accreditation, right? That's your date you can start. Sometimes you won't be able to drop the claims until you have a Medicare number. So sometimes you're holding that date, right? You're holding claims for so long until you get your CCN number and you can start dropping claims. Now, some payers will allow you to go out of network and in network, understand the difference of what your regulations and your state and your payers say.
00:35:26
Speaker
teach your front desk staff that to the patients. So when the patients call in and they go, listen, my doctor wants me to come to your new surgery center, but I know you're out of network and it's going to cost me a whole lot more and the hospital's in network. So what am I supposed to do? Because he's saying you're going to honor this. How, how can you do that? You want to have a solid answer. So work with your front desk staff, have a scripted legal answer, right?
00:35:54
Speaker
from either a consultant or some other team who knows how to do these contracts of explaining to the patients what it means to be in-network or out-of-network and what it means when you're going to honor in-network or out-of-network benefits. And then be very clear on the cost associated with the patient. Nobody likes that surprise that morning when they show up and they've been NPO or they prep for their surgery and then all of a sudden you're telling them that morning
00:36:22
Speaker
you're gonna have to pay $3,000 cash. So please don't do that to your patients. Have that conversation before the morning of your surgery. Absolutely. We did have one question. How much leverage do you have for negotiations? You know, you have some leverage, but I will tell you most payers, the rates are market-based and regional-based, right?
00:36:47
Speaker
most have a general idea of what they're already paying other ASCs in your marketplace. So to think that you're gonna go in and demand 300% of Medicare because you have these phenomenal surgeons, I would say good luck. And if you get it, I would say call me because I'd be interested in hiring. So just know that you do have some leverage, but never set yourself, never go in with your bar set low, right?
00:37:16
Speaker
Don't ever go, we're happy with 110 times Medicare. No, you're not, right? So set the rate much higher and allow them to back down, right? It's kind of the opposite of when you're buying a car, right? You're not going to go in and go, geez, you're only asking $27,000, there's Honda, how about I pay 30? That doesn't happen, right? So you see on a car, right? You're picking, if you're going to pick a Honda Accord, you're asking 27, I'm going to pay you 23, right?
00:37:43
Speaker
You go low ball, right? You're buying a car and then, you know, you guys meet in the middle. It's the same thing with the insurance. You're going to want to start high. So let's just lift it, right? Start high, they're going to go low, try to negotiate, right? And use public data, right? So don't go call your friend at the friend and try to get confidential information because that's bad and it's illegal. So don't do that. But
00:38:10
Speaker
Do some marketing research. Know what the HOPD rate, which is another reason to be a member of ASCA. Know what the HOPD rate is. Know that Blue Cross in your area is paying for a knee replacement at an HOPD X amount of dollars. So know that you could, and you want to negotiate your ASC at this amount. So know what the rate is. Don't be afraid to go high. Let them back you down. Never go in super low because they'll accept that.
00:38:38
Speaker
then it's a long time before you can renegotiate out of that rate. Yep. Great advice.
Clinical Preparation and Anesthesia Partnerships
00:38:45
Speaker
All right. Quality and clinical preparation. So I just put a couple of bullets in here, things we saw during registration. We have some other questions as well. What is the process like preparing for the clinical side of the house? Sure. We start about four months out from opening with the clinical side of the house with onboarding an administrator.
00:39:09
Speaker
policies and procedures that are specific to not only that surgery center, but to those state regulations, you have to take all of that in consideration, making sure that you're following the correct organization guidelines, whether it's ARN or APEC or so forth. So all of that starts early on. And then know what, as we're coming into
00:39:32
Speaker
scores and mandatory reporting in 2025, you're going to, you're wanting to know which quality reporting software that you're going to go with. And so there's multiple different softwares out there. We use PressGaining, doesn't mean you have to, that's just who we've moved to. So know that you've got to get those softwares in place. I would not wait to the deadline to get them in place. I would try them out several months before the deadline is coming so that you know how to use the software
00:40:02
Speaker
you know how to rearrange your questions so that your patients use the software. So just know that that regulation is coming down in 2025, so get ahead of it early. If you're not there yet, you might wanna do that after that we get off this podcast. So, and then know what positions when you go to hire are gonna fulfill that quality need also, right? So staff hiring is important. Like I said, we bring the administrator in about four months before opening.
00:40:31
Speaker
If they're not an RN, you do have to have an RN on staff to open and run the surgery center, right? So just know that if you're hiring a business administrator, you can't cut corners and hire, you know, an LPN or something like that. You have to have an RN who's going to oversee the clinical side. A lot of times we'll initially open a center with that dual role, and then as the center grows, we'll split it off. We'll have a strong administrator and then a strong director of nursing, right?
00:41:00
Speaker
Either way you want to do it is fine. But those key staff members are very important when it comes to your quality program, your QAPI stuff, your infection control, life safety, and all of those different subcommittees that are inside of there. Perfect. One question that came in. In terms of organizational structure, any tips for what it might look like for a small surgery center that has limited staff? Yep.
00:41:30
Speaker
go first thing do is go look at your state regulation and be creative on your staffing based off of your state regulation. So if you're a small single specialty pain center, GI center, whatever the case is, try to utilize and use your nurses to the top of their license or the text to the top of their license. So it's important to know what your staff, your state regulations are as you're building your staffing.
00:41:56
Speaker
And because you might be able to use LPNs or even scrub text in certain positions where you've traditionally had to use an RN, or we thought you had to use an RN. So that is important. Again, ask us a huge member base, put a question in there about your state regulation. There's already someone who's done this, so don't recreate the will. Start getting on there asking the questions, right? But then work your staff to the top of their license.
00:42:24
Speaker
and then look at ways that you can mix up your staffing while ensuring excellent patient care. I'm a huge fan of team nursing. Again, a member of that 25 plus year nursing thing. We had team nursing back then. I loved it. I still love it. So know that you can have RNs, LPNs, and techs working. Utilize them. Everybody has a place in healthcare because our common goal
00:42:51
Speaker
is to get great patient care. So don't overlook staff that are in your area that have the potential to help your surgery center and cross train your staff as much as possible, right? So I've taken some of the meanest OR nurses in the country, and I could pick on one of them right now in Houston, Texas, and I love her to death.
00:43:14
Speaker
She's like, I've not taken care of a bedside nurse since I got out of nursing school. I'm an OR nurse and I'm not doing that. And I go, so you are, we're going to work through this, right? So cross-trade your staff as much as possible. There's probably some OR orange right now that are going to put down booze signs and that's okay. Cause I still love you guys, but cross-trade your staffs, right? Cause if a patient goes bad, if you need an extra set of hands, we're in a small center together. Remember that independent, you have to be totally isolated.
00:43:43
Speaker
It's the same when it comes to patient care. You're independent, you're small, you don't have a huge hospital resources to pull from. Cross-training is going to be vital for your center and it's going to help your camaraderie there to build a successful center also. Perfect.
00:43:59
Speaker
We got a lot of questions around finding the right anesthesia partner. I actually put this on the next slide as well, but it feels appropriate to talk about here too. Any tips for finding the right anesthesia partner and just making sure you always have the resources that you need? Yeah, again, if you find a great one out there that's not charging you stipends, can you have them call me? I'd be interested in the questions.
00:44:28
Speaker
Anastasia right now is a painful subject across the nation. We're seeing it in the hospital space. We're seeing it in the ambulatory surgery space. It's hard to find anesthesia providers. It's hard to find an anesthesia group that's not going to come on and charge you a stipend. So you're a new surgery center. You're trying to get your feet wet. You're trying to build cases. You know you're not going to make revenue and get out of the red for maybe 18 months.
00:44:56
Speaker
and then to have to pay a stipend to an anesthesia partner, it's very painful. And it's a hard sell to your doctors, right, and your board. Look at your smaller providers. Look at your smaller anesthesia in the community. Ask around. Interview anesthesia groups, just like you do an architecture GC, and it's okay to do that. Talk to different ones and find out. Figure out, you want them to have skin in the game in your surgery center.
00:45:23
Speaker
So you may have an anesthesiology group that's local to your area that maybe just wants a small position of ownership in the surgery center, right? You have to remember, they're not bringing you volume, right? So you have to remember, take that in consideration if they're wanting to join as an owner way back in the feasibility. But there's some give and take to that because yes, they're not bringing you revenue, but they're going to be engaged to keep that center making money and give you the coverage you need because they have a little bit of ownership, right?
00:45:52
Speaker
I wouldn't give them a ton of ownership, but that might be something to think about, right? Because you know that and maybe reduce the amount of stipend that you're having to pay. Not saying they're not going to charge you still, but maybe they wouldn't charge you as much because they know they're paying for it ultimately in the end. Right now it's just, it's a shortage that we're dealing with. And I think we just have to be, we have to be desperate and look around to see what's available in the marketplace and look at national level.
00:46:22
Speaker
organizations too. Yeah, definitely. I have two in mind. I'm going to ask them if they charge stipends now. You do that. If they don't, will you send them to me, Erica? I'd be very interested in talking to them. I absolutely will. OK, so clinical prep, business prep. Got a lot of questions here as well. Where do you start preparing for the business side?
Business Management and Community Engagement
00:46:51
Speaker
Early on.
00:46:52
Speaker
early on, you want to make sure you have solid policies and procedures for your business office. Know how you're going to handle cash. Do you have a little safe in there? Today's the world's a little crazy. You know, we're doing a lot of outpatient surgery centers now that do bariatric patients that do plastic surgery. So it would not be uncommon to have a patient come in and just give you $10,000 cash, seeing it happen, right?
00:47:16
Speaker
So take some of that in consideration early in your design process of your surgery center. Do you have a little say? If not, maybe see about putting one inside of there. But you're going to want to start your business preparation early. It comes with selecting the right software that's going to manage it. We use HST. We always have. HST has been a big partner and big process in our life. We can use any software. We just use HST.
00:47:45
Speaker
other ones on the market, but to track your spend, to track your capital, to know what your case costing is, to load in your equipment, to be able to inventory where that CRM is or how many implants that you have or so forth. Understanding the software that you used is going to be vital to controlling the spend of your surgery center. One, I think I read a statistic, don't quote me on it,
00:48:10
Speaker
a couple months ago that the number one loss of revenue in a surgery center is from supply chain and not understanding what money is going out the door with supplies and case costing. So having a solid business department and revenue cycle department is paramount in top of inventory control and knowing what you're buying, what your contracts look at, right? Because all of this gets tied together, right?
00:48:40
Speaker
So we know the doctors that are coming in based off of the specialty, right? So we know now what our payer contracts are going to pay us for that specialty. So now we've got it married up with the supplies, and then we know the staff, right? So all of that has to start balancing, just like you balance your personal checkbook at home, right? You know how much your mortgage is, you know how much your car insurance is, you know how much your car payment is. What the bottom of your personal budget, you don't want to see red, right? So it's the same on your case. So if you're doing a colonoscopy,
00:49:10
Speaker
By the time you know what Blue Cross is going to pay, know what the anesthesia is going to take out, know what it costs to process the scope, both material-wise and human-wise for your staff, know what the supplies are needed, and know what your pre-op and packing cost is, you don't want that bottom number to be red, you want it to be black, right? So ensuring that your business side of the house is solid will help your bottom line. If it's messy, you're going to have a messy business and you don't want to do that.
00:49:39
Speaker
So you want to focus as much attention on the business side of the house than you do the clinical side of the house, because they really do work parallel. Because what happens if a business is starting to hurt financially? Where do they start cutting costs on supplies? They're going to go to cheaper implants, cheaper disposable, cheaper scopes, cheaper this. That's going to affect your clinical side of the house, right? Clinical quality is going to start going down.
00:50:07
Speaker
you could see your infection control rates go up and so forth. So it's important to have a strong house both clinically and on the financial side. So I see this is probably one of the number one things I see on independent surgery centers is not focusing enough on the strength of their business. Yeah. And it makes sense because having clinical backgrounds
00:50:33
Speaker
and that's their experience has been their exposure. This might be the side of the house that you might need to lean more heavily on some consultants and people have more experience. That's exactly right. That's exactly right. One of the things I recommend that independent surgery centers do specifically is if you don't have a revenue cycle audit done on your business once a year, you should. So if you're using revenue cycle XYZ have
00:51:02
Speaker
higher revenue cycle ABC to audit XYZ, right? Once a year to make sure they're not leaving any money on the table, right? Make sure that every penny that could be collected is collected and just have them audit a percentage like 10% or something to see what they're doing. It gives you the ability to know that the revenue cycle company that you're working with and the process that you have at your surgery center is strong.
00:51:32
Speaker
If not, then it gives you an opportunity to go back and fix it or go back and say, eh, maybe I want to look in another direction because they don't really see, right? You do have some revenue company out there that will only collect based off of what the contract has with their payer. And so you want to be very cautious of that. There's more that they can do, but are they doing that for you? And so just like you're interviewing your architects and your GC,
00:52:01
Speaker
interview those revenue cycle companies and find out. And if you have one that you think's doing a great job, they shouldn't worry about an audit. If they're doing a great job and they're gonna audit you, they should welcome the audit. If they push back pretty hard, that should tell you the exact reason why you need to do that audit. Yes, now we did just get a question. Do you have any examples of revenue cycle companies that will perform an audit? Yeah, so I use one based in Chicago,
00:52:31
Speaker
And their name is Accurate Revenue Cycle. I always get it wrong. It's Accurate. Mike Orsino is the CEO, but I think it's Accurate Revenue Cycle. And they do an audit, and I've always been extremely happy with the audits. Perfect. Thank you. All right, coming down to the wire here. This is when the sleepless night starts, if you're open. It's time to open.
00:52:59
Speaker
So obviously there's so much more to actually, but this also could have just been, you know, maybe titled a marketing slide, but we find that a lot of surgery centers don't think about this part of it and actually connecting with their community. So any quick tips here? Yeah. You know what? It's a great time to highlight what a wonderful job that your architect has done that your physicians are doing to the community, to the jobs that you're bringing to the community.
00:53:28
Speaker
what your general contractor has done. So it is an absolutely great time. They want to show off their work just as much as you want to show off your surgery center for great surgeries, excellent patient care, no infection control rates, right? So we all want to show off our surgery centers like that, but your architects and your GCs, they want to show off the surgery center that they built too. Team up with them to have an open house, to hold something in your community,
00:53:56
Speaker
Obviously you'll have to terminally plan again. And we know that because I had people go, I don't want people stomping around. You want to show you're off your center and it's okay to show off your operating rooms. You terminally clean. You do all the safety stuff that you have. You do an ICRA before you do an open house and you do all that. But you want to show it off. So team up with your architect and your GC and publicize it. You also absolutely want the physicians who are investors
00:54:24
Speaker
to bring their office staff to that surgery center. That scheduler at that physician's office is key to your success at that surgery center. You want him or her in that surgery center as soon as possible to see it, to know what it looks like. So when she starts scheduling, when he or she starts scheduling surgeries, they're moving them from maybe out of a hospital over to your new surgery center or out of a competitive surgery center into this new one this doctor owns.
00:54:51
Speaker
You want them to be excited about that surgery center because they've seen it. They know what it's like. And so that is, those are the people that you want to get into that open house right away also. And maybe do a private open house for the physicians and their friends and family and their schedulers, right? And so it's worth the money that you spend for open houses. I know ASCA does a great job at offering open houses. They have marketing abilities and all that stuff. So tap into your resources.
00:55:21
Speaker
Connect with your vendors, whether you're using Striker for Equipment or Arthrex or HST. Tap into your vendors also. They may want to highlight their services. So know that it does cost money to have an open house, but sometimes if you partner up with some of your vendors or contractors, sometimes you can share that cost and get to share the rewards of people highlighting and seeing your new center.
00:55:48
Speaker
Yeah, that's perfect. I love the tip about the scheduler. I have not heard that one yet, but I can imagine if they're on the phone with the patient and the patient is stressed, they can assure them it's beautiful. I've been there, you know, and have that dialogue with them. Very much so. All right, coming down to the wire here.
Future-Proofing Your Surgery Center
00:56:06
Speaker
So you're open. You have patience. How do we continue to improve?
00:56:13
Speaker
We, it's constant, right? So every day you treat it like it's a new surgery center. You do physician recruitment. You keep your physicians that are investors happy. You know, you make sure that they're starting on time and so forth, right? Investors doesn't mean that you want to lose them. So keep that physician recruitment going. Follow your quality improvement programs. Know where you are on those. Follow a guideline that you have.
00:56:41
Speaker
Do your benchmarking, whether you use Ask or any other company, make sure that you're doing your quality studies. For those who don't have idea of what quality studies is, send me an email, I'm happy, right? You can make a quality study out of almost everything, but keep a little tracker in your office of something that says, you know, are our discharges too slow or how many IVs starts you were doing? There's always an opportunity for improvement. People look at benchmarking and quality studies kind of sometimes negatively,
00:57:11
Speaker
They just give us a highlight to say, hey, we need to improve in this area and this is what's going to give us that option for improvement. So kind of turn the table on that. Your physician and patient satisfaction are a requirement that you're going to need to do anyways. So make them engaging for the physicians. You want that feedback, positive or negative, turn it into something that you can say, we learned from this, the patients are telling us this, what can we do to correct it or change it, right?
00:57:38
Speaker
So take the feedback, good or bad, and do well with it. That's going to be important. Cross-training your staff, we talked about that early, and it's going to be paramount. And new technology, get your staff over their fear of change. And we've always done it this way for 20 years, Dawn, and we're going to continue to do it this way. Actually, no, we're not. We're going to change. And so don't be afraid of new technology.
00:58:03
Speaker
In the staffing shortage that we're in right now, we're going to be short 1 million nurses in this country by 2025. The only way that sometimes you're going to be able to get through a problem is to use the new technology that's out there to fulfill a position that maybe you were having a nurse do, the pre-op calls, some of the other stuff, encouraging your patient to use the portals, right? Embrace the new technology. We're going to have to use it so
00:58:32
Speaker
So go forward, look forward to the new technology and don't be afraid to try to use it. Perfect.