More hospitals are considering setting up segregated outpatient surgery departments and acquiring ambulatory surgery centers (ASCs), but are often hesitant to make these investments. Physicians who work in these facilities are often hesitant to work in these hospital-operated settings.
The reason for the hesitation is the same for both hospital and physician: concern about the hospital turning the department or surgery center into an inefficient and unprofitable venture by managing and running the outpatient facility like an acute care facility.
An outpatient department or facility is doomed to failure if a hospital believes it can simply move staff and physicians into the department without first understanding what makes outpatient surgery departments and centers operative effectively.
There are many scenarios in which a hospital would come to operate an outpatient surgery facility. Some hospitals build departments while others acquire facilities. When a hospital makes an acquisition, it may share ownership with physicians or share ownership with physicians and a management company partner (ASC joint ventures); acquire all shares and keep the facility as a freestanding surgery center; or acquire the facility and turn it into a provider-based hospital department. Note: This final option has recently come under increased scrutiny, including from OIG, and should be considered with caution.
Regardless of the scenario pursued, by analyzing the critical ways where hospital and outpatient facility operations differ and understanding successful ASC strategies, hospital leadership will be in a better position to preserve and ultimately emulate the efficiencies found in the ambulatory surgery model.
Here are 10 steps hospitals should follow for all ownership structures.
1. Analyze surgical volume. Start with looking at your entire outpatient surgery portfolio, identify where surgery is performed and determine what cases to move into this new facility. If your hospital performs 10,000 surgical cases annually and you now have a surgery center with capacity for 3,000 cases, you need to determine what 3,000 cases will go into this facility. This determination should be based on multiple factors and requires more than a cursory review.
2. Identify needs to meet. There's no single rule to address what cases to move. Every situation is different and requires customizing to meet the following: physicians' needs, physical plant constraints, hospital's needs, payers' needs and patient needs.
3. Avoid redundancy. If you decide to use this facility for procedures requiring a piece of high-ticket equipment, it is important to move all of those procedures to the facility to eliminate the investing in the equipment for multiple locations. Of course, a hospital still needs the ability to perform emergency surgery for cases that come into the emergency department.
4. Think "healthy patients, elective cases." You will also want to consider the following mantra for all of your decisions: healthy patients, elective cases. A hospital by nature is a critical care facility accessible to anyone and open all day, every day. This is one of the many challenges hospital administrators face under shrinking reimbursements and higher healthcare costs.
Outpatient surgery facilities don't bear that same burden and, therefore, don't need the same level of staffing, equipment or access. They should be accessible only to those patients directed to the facility and physicians who are performing the procedures designated for the facility. And they should only open when procedures are scheduled, often Monday through Friday, with no afterhours care.
5. Apply the rule to staffing. If you remember the rule of healthy patients, elective cases, it will help prevent you from thinking the facility needs around-the-clock staffing or redundant equipment. Surgery centers have just enough staff, equipment and supplies to handle the procedures on its schedule safely, efficiently and cost-effectively.
6. Apply the rule to IT. Your IT team may want to implement robust systems into the new facility, but these may not be necessary. Before making changes that seem like upgrades, have the IT team address why the change is important. Does it lend itself to better outcomes? Improved efficiency? Cost-effectiveness? Competitiveness? Compliance?
By asking your IT team this question of "why are we doing this," and asking it of all departments and leaders working with the new facility, you will help prevent decisions not clinically or financially appropriate.
7. Apply the rule to nursing. The same holds true for nursing. In outpatient surgery facilities, you want the ability to shift nursing staff depending on caseload. Surgery centers often use pro re nata (PRN) staffing and operate a flexible staffing schedule. Many trained operating room nurses retired because they were not interested in working hospital schedules. Outpatient surgery facilities, with their flexible schedules, allow these nurses to re-enter the workforce. While you may feel an obligation to staff the facility with full-time nurses — and many of them — who are long-time employees of the hospital, remember the "why are we doing this" question.
8. Don't deviate. The concepts of remaining flexible and investing in just what is necessary are often difficult for hospital department and nursing leadership to grasp. That's because hospitals often set up processes based on the exception. They have to assume every possible scenario and operate for the one instance something entirely unexpected happens.
Surgery centers treat healthy patients and perform elective procedures, with every case planned in advance. There are a limited number of procedures that can and should be performed in an outpatient facility. Your chances for an anomaly are much less. You don't plan for the abnormal in a surgery center; you plan for normal.
9. Prioritize physician engagement. If you are acquiring a facility, regardless of whether the physicians remain owners in it, it is critical to keep them engaged. When you consider adding procedures or making other clinical-related decisions, focus on surgeon preference and surgeon satisfaction before considering employee satisfaction. Regardless of whether they are owners in the facility, physicians should serve on committees and advisory boards so they have routine and frequent opportunities for input into operations..
10. Grow intelligently. If you start to approach capacity for the facility, it may make more sense to open another facility as opposed to adding to the existing facility and creating the maze often seen in expanded hospitals. The best problem to have is more cases than you can fit into your physical plant. Surgery centers will often tackle this problem by building a new facility in a different location rather than expand or add weekend or evening hours. These are good practices to consider.
Remember: surgery centers are not hospitals
I cannot stress enough how important it is to acknowledge that when it comes to hospitals and surgery centers, you are working with very different types of facilities. An analogy I tell my hospital clients is the difference between a hospital and a surgery center is a hospital is an aircraft carrier while a surgery center is a little Sunfish sailboat. If you want to turn an aircraft carrier, you plan far ahead, make calculations and don't see the results immediately. If you want to turn a Sunfish, one person pulls a rope and it turns. That's much more the way an outpatient surgery facility should operate — adaptable, accommodating, efficient.
ASCs are well-positioned to thrive in today's lower cost healthcare environment, and hospitals should pay attention to the lessons they can learn from surgery centers. For example, if the surgery center you acquire has turnaround times half that of the hospital, you will want to ensure you do not lose the efficiencies of the surgery center and work to identify ways to bring those efficiencies into the hospital. As such, there should be a cyclical relationship between the hospital and outpatient surgery facility that lends itself to great learning opportunities for hospital leadership.
Joan Dentler is president and CEO of Avanza Healthcare Strategies, which provides hospitals and federally qualified health centers with strategic guidance, with a focus on outpatient services and population health management. She can be reached at jdentler@avanzastrategies.com.
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