In a session titled "Physician Hospital Alignment — Specialty Focused Ortho/Spine JV Surgery Center," at the Becker's Hospital Review Annual Meeting, CEO of Blue Chip Surgical Partners Jeff Leland and President of Sentara Potamac Hospital Megan Perry discussed the best methods for physician-hospital joint ventures on orthopedic and spine surgery centers. Sentara is an integrated health system largely in Virginia had been looking for ways to stay afloat in today's volatile healthcare market.
"Our board of directors recognized where healthcare reform was going," said Ms. Perry. "We had one basic training area, but we realized we had to grow to survive. We felt we needed sufficient physician coverage for our core business. We had a commitment to the community to provide ER coverage to insured and uninsured patients, but we needed to figure out our margin. We wanted to find the right surgeons who have the right skills and attitude — it wasn't about critical mass."
One of the struggles Ms. Perry and her colleagues had was figuring out how to align with physicians within the legal perimeters and ensure long term viability of their critical strategic programs. She worked with Mr. Leland and Blue Chip on a joint venture where the physicians, Sentara and Blue Chip all held a percentage of the surgery center. For physicians, she said the alignment offered improved work/life balance, professional satisfaction and economic stability.
"Hospitals often want to own 51 percent of the surgery centers, but surgeons only have a small percentage individually, so in that case there are a few surgeons who carry the load," said Mr. Leland. "We think that is a flawed model. This project includes 12 orthopedist, a few spine surgeons and pain physicians. The doctors own 42 percent."
Virginia is a CON state, so in order for them to move forward with the project the hospital had to decommission an OR. The ASC was built five to 10 miles from the hospital campus and included an ER and imaging. "We put the ASC in a neighborhood with a lot of families and it's becoming a sports medicine focused area," said Ms. Perry. "We have trade agreements with athletic trainers for the center and we do fracture clinics to get the kids back on the field quickly."
When orthopedic and spine surgeons are involved, it can sometimes be challenging to keep costs low because instrumentation is so expensive. "It's a challenge to organize the cost of instrumentation," said Mr. Leland. "Sentara adds credibility to the center, so we believe we can do a better job contracting. We are trying to create a culture of physician leadership and educate the surgeons at the same time."
In the future, Ms. Perry's team may be able to expand to three or four surgery centers with physician leadership where there will be a high return. "It's more expensive to build four ASCs than one, but they have the doctors that come together because they want to be there," said Mr. Leland. "They are becoming educated and know what Sentara can bring to the table."
"Our board of directors recognized where healthcare reform was going," said Ms. Perry. "We had one basic training area, but we realized we had to grow to survive. We felt we needed sufficient physician coverage for our core business. We had a commitment to the community to provide ER coverage to insured and uninsured patients, but we needed to figure out our margin. We wanted to find the right surgeons who have the right skills and attitude — it wasn't about critical mass."
One of the struggles Ms. Perry and her colleagues had was figuring out how to align with physicians within the legal perimeters and ensure long term viability of their critical strategic programs. She worked with Mr. Leland and Blue Chip on a joint venture where the physicians, Sentara and Blue Chip all held a percentage of the surgery center. For physicians, she said the alignment offered improved work/life balance, professional satisfaction and economic stability.
"Hospitals often want to own 51 percent of the surgery centers, but surgeons only have a small percentage individually, so in that case there are a few surgeons who carry the load," said Mr. Leland. "We think that is a flawed model. This project includes 12 orthopedist, a few spine surgeons and pain physicians. The doctors own 42 percent."
Virginia is a CON state, so in order for them to move forward with the project the hospital had to decommission an OR. The ASC was built five to 10 miles from the hospital campus and included an ER and imaging. "We put the ASC in a neighborhood with a lot of families and it's becoming a sports medicine focused area," said Ms. Perry. "We have trade agreements with athletic trainers for the center and we do fracture clinics to get the kids back on the field quickly."
When orthopedic and spine surgeons are involved, it can sometimes be challenging to keep costs low because instrumentation is so expensive. "It's a challenge to organize the cost of instrumentation," said Mr. Leland. "Sentara adds credibility to the center, so we believe we can do a better job contracting. We are trying to create a culture of physician leadership and educate the surgeons at the same time."
In the future, Ms. Perry's team may be able to expand to three or four surgery centers with physician leadership where there will be a high return. "It's more expensive to build four ASCs than one, but they have the doctors that come together because they want to be there," said Mr. Leland. "They are becoming educated and know what Sentara can bring to the table."
More Articles on the Becker's Hospital Review Annual Meeting:
5 Key Financial Ratios Healthcare Providers Should Track
What is a Healthcare Leader Worth? Determining Hospital Executive Compensation
The Most Common Medical Staff Problems and Issues and How to Handle Them