Getting Skin in the Game

Orthopedic surgery can be a demanding specialty, and with its rewards comes its challenges and opportunities. No one knows this better than J.F. James Davidson, MD, who specializes in sports medicine, shoulder and knee surgery and who is part of Canyon Orthopaedic Surgeons and also practices at Gateway Surgery Center, both in the metropolitan Phoenix area. He discusses life inside and outside of the OR.

Q: Why was the specialty of orthopedics right for you?

A: I greatly respect physicians in other fields such as family practice, oncology and trauma surgery, to name just a few. Good physicians can solve a complicated medical puzzle and potentially save a sick person’s life. These physicians carry the burden of a weighty responsibility. One reason I chose orthopedics and specifically the area of sports medicine is because our patients usually have treatable problems and the capacity for relatively rapid improvement. They usually do not have life threatening conditions and are highly motivated to improve in order to maximize their quality of life. I remember rotating through cardiology and nephrology in medical school and learning the serious consequences of chronic disease. On the first day of the orthopedic clinic we examined a man with a fractured patella. The patient jovially answered our questions regarding how he managed to be kicked in the knee by a goat. In spite of the discomfort of the fracture the patient laughed at his unusual predicament. I though, now I have found the right specialty.

Q: The practice of medicine is becoming more challenging in terms of medical malpractice, tighter reimbursement, etc., so how do you cope with these modern challenges?

A: I have had some very good teachers and role models. Bill Brainard, MD, one of the founders of our group, Canyon Orthopaedics, taught by example the benefit of finding enjoyment in working with patients and colleagues, and in performing surgery. Our practice has the innate rewards of helping people, solving problems, interacting with others. My partners and I feel fortunate to do what we do. The negatives certainly can be a drain on the system, but we try to focus on the positive reasons that we come to work each day.

Q: Most physicians are never trained in business, and when they become medical entrepreneurs, they can be unprepared for the rigors of business. What has been the most valuable lesson you have learned about being a medical entrepreneur?

A: As I mentioned, I have had some very good teachers. Dave Ott, MD, was the driving force developing our successful orthopedic ASC, Gateway Surgery Center. He proved that bringing traditional competitors together for a common business goal can lead to a win for all. Prior to Gateway’s development, Canyon Orthopedics consulted with a national firm regarding the viability of creating a small ASC as an extension of our six-man group. The consultant determined that the project would be worthwhile, but with lower volume than ideal. Instead we became part of the 30-physician Gateway ASC. This has proven to be far more efficient and successful than the project we could have done on our own. Currently under construction is the Southwest Orthopedic and Spine Hospital, an orthopedic specialty hospital in Phoenix. For this project 37 orthopedists and spine specialists have partnered with Catholic Healthcare West and USPI to build what we are determined to be the highest quality orthopedic facility in the region. Finally, a number of currently independent orthopedic groups in greater Phoenix are now working on the merger of our established practices to form a single large orthopedic group. We are hopeful that this of relationship will benefit from similar synergy as Gateway Surgery Center.

Q: What clinical lessons have you learned from sports medicine that you carry over into your other practice, and vice versa?

A: A high school athlete with the goal of a college scholarship is driven to return to the playing field as quickly as possible. A few extra days off the field may mean missing a game and a chance to help his team win and shine for a college scout. The athlete wants aggressive treatment to get him back in the game as quickly as possible. In worker’s compensation cases, an injured worker may or may not have similar motivation to get back to work quickly. However, fast-tracking treatment leads to more rapid return to the job, and less time on sick leave. Similarly, the injured worker (and his employer) benefit from avoiding unnecessary operations, but meanwhile not delaying the inevitable procedure. If a surgery ultimately will be required then spending time on additional therapy is not advantageous. Making this determination requires experience and judgment. The same is true in the treatment of the athlete. On the other hand, many middle-aged athletes as well as injured workers have degenerative changes seen on an MRI. It is important to make clinical decisions as to what changes seen on scan are degenerative and incidental versus acute and painful. An over-read of an MRI can lead to a potentially avoidable surgery in both the athlete and laborer.

Q: What are the technological/clinical advancements in orthopedic surgery that get you most excited?

A: I’m excited by a number of new devices and procedures. I’m always on the look-out for methods leading to better or more reproducible results; easier or less invasive ways of doing procedures; and faster or less painful recoveries. Throughout the year the Arthroscopy Association of North America (AANA), hosts cadaver training courses to teach new techniques and improved ways of performing standard techniques. I have been an assistant instructor at the AANA shoulder courses for years and always learn from the master faculty leading the discussion and training. Two areas of special interest are the use of preoperative MRI to determine the pattern of rotator cuff tears and method of repair; and the use of an MRI to preoperatively design cutting jigs to add to the precision of total knee replacement.

Q: What do you believe is the future for outpatient orthopedic surgery in terms of keeping up with the ever changing medical and economic environment?

A: Practicing-physician involvement in management and ownership is one key. No one has a greater interest in maintaining a top-flight center than the orthopedist taking care of the patients, doing the surgery, and watching the bottom line. As we discussed earlier, my partners and I are betting on “big is better.” We built Gateway without a corporate partner. Last year for a number of reasons we sold a portion of our center to AmSurg. We are hopeful that this association will lead to economies of scale in purchasing and a stronger position in contracting. Cooperation with our colleagues has led to success in business and has improved our practice of orthopedics as well. We consult one another, adopt best practices, and learn from each other’s successes and failures. Healthcare is changing rapidly and we will all need to stay nimble to adjust to these changes.

J.F. James Davidson, MD, graduated with honors from Yale University and received his MD degree from Columbia University. He then completed his orthopedic residency and sports medicine fellowship in Phoenix. He is board certified by the American Board of Orthopaedic Surgery and is a fellow of the American Academy of Orthopaedic Surgeons. He has also served as an officer in the American Orthopedic Society for Sports Medicine and the Arthroscopy Association of North America. Davidson has published scientific papers and spoken nationally on topics ranging from anterior cruciate ligament reconstruction to arthroscopic rotator cuff repair. He is the lead spring training physician for the Chicago White Sox as well as the team orthopedist for several local schools. His special interests include disorders of the shoulder and knee. Davidson has been with Canyon Orthopaedic Surgeons since 1994.

2010 Management Guide

Dealing with Survey Deficiencies

After receiving 23 pages of citations and a threat of losing its license, a Texas ASC (that had gone three years without a state/Medicare survey) recognized its desperate situation. While many of the citations concerned the new conditions for coverage and multiple notes for the same deficiency, the center still needed to respond with corrections within 10 days. Typical of smaller facilities, the employees responsible for compliance activities are the same individuals involved in routine care. While intending to comply with regulations, patient treatment takes priority and administrative paperwork falls behind.

In addition to their daily routine, management now needed to research, evaluate and interpret the regulations in order to rewrite/update their policies within the response time. The practitioners (both administrative and physician) realized that the task they faced required the resources and skills of an outside expert. The facility searched for a consultant that could help solve their problems. Separated by 1,500 miles, with the days ticking away, recognizing travel arrangement difficulties and skyrocketing travel expenses, they requested FWI Healthcare’s assistance.

Receiving and reviewing their citations, FWI presented a cost-effective proposal to the client that was accepted. The client faxed requested documents for our analysis. We discussed existing materials and the need for changes. FWI also developed some revisions to their policy manual and the plan of correction for submission. This information was provided to the client and after telephone clarification and minor adjustments; the transcripts were ready for use.

The plan of correction was accepted and upon the surveyor’s return for a follow-up visit (finding everything to be acceptable), she recommended the license and certification be renewed.

Many small ASCs do not have personnel with experience, knowledge or time necessary to rapidly respond to deficiencies cited by survey agencies. This is where relying on the resources of consultants (who provide assistance on a fee for service basis) is invaluable. All of FWI’s work was completed with minimal expense and without either party leaving their office.

By Roger Pence, president, FWI Healthcare www.fwihealthcare.com • 419.298.3700

Challenges Unique to De Novo Facilities

De novo projects can be a long and not always painless process, but like turnarounds, they have incentives as well. With a new development, we are able to construct the center from the ground up to ensure our high standards are met and so high-quality care can be administered efficiently from day one. We are also able to form a great group of physician partners with the right balance for a successful ASC. Now, just because we get to make initial decisions on the facility and the business with our partners, it is not always roses when developing a new center. We deal with doubting partners, setbacks, stumbles and roadblocks. In the case of our new de novo facility in Mt. Dora, Fla. we hit an unusual roadblock — gopher turtles. Yes, gopher turtles. This protected species was living on our construction site. We had to have the turtles moved, but that could only be done after three consecutive days of 50 degrees or warmer weather. The turtle relocation caused about a six-week delay in the building process, and while no one could have anticipated a gopher turtle infestation, we took care of the situation and did what we could to get the project back on track.

We found that the perspective of the partnering physicians in de novo projects is quite different from that of partners in turnarounds. While in turnarounds we are often thought of as better managers than we are, sometimes in new developments we are thought of as worse. Partners focused on financial returns view any stumble on the way to distributions as a failure, when in fact, stumbles are a part of the process and sometimes result in positive outcomes. The objective is to have the “wiggle room” to adjust, correct problems, and move forward.

No matter what we encounter along the path to developing a new center, we are committed to our partners and the success of the center and look forward to developing new, successful centers across the country.

By Tom Mallon, CEO, Regent Surgical Health

www.regentsurgicalhealth.com 708.492.0531

Ostrich Strategies for ASCs: Never A Good Idea

The phrase “burying your head in the sand” has become synonymous with hiding from the truth or hiding at the first sign of danger. Ostriches are alleged to do that, but they actually do not. However, owners of distressed outpatient centers sometimes really do.

Our firm gets involved in helping distressed outpatient centers, including surgery centers, and our experience has shown that it is the rare owner who does not “bury his (or her) head in the sand” hoping that something will occur that will cause the source of the distress to simply go away. Employing an “ostrich strategy” is a bad idea, as well as a waste of valuable time and resources because the sources of distress rarely go away simply and easily.

The “ostrich strategy” usually results in the center being behind in payments to lenders, landlords, the taxing authority, staff and most vendors by the time we get involved. The task of pulling your head out of the sand and developing workable strategies is complex and multi-dimensional, and involves lawyers and lots of different personalities. In addition, there are always varying degrees of trust among the owners and the managers (who are also often owners). Getting to the core problems requires information analysis, lots of conversation and a site visit or two. Once those core issues are made clear, then the people leading the charge put a simple strategy in place. It needs to be simple because additional and incremental complexity will only complicate matters and likely make things worse. Our firm often leads the charge, but many times we do it in tandem with the center’s lawyers. Depending upon how far behind the center is with various creditors and what legal actions have already been taken, the lawyers may well take the lead.

Follow your strategies, keep your head out of the sand, stay calm and focused, engage the right professionals for you and you may be able to yourself of the sources of distress that caused you the problems in the first place.

By Robert S. Goodman, managing partner, The Mansfield Group www.mansfield-group.com 609.267.0990

Adding Specialties to Increase Profitability

Foundation Surgery Affiliate of Huntingdon Valley, Pa. is an AAAHC-accredited, multi-specialty ASC that opened in 2003. With four operating rooms, two procedure rooms and 19 surgeon partners, this 18,000-square-foot facility was profitable; however, there was still a tremendous opportunity for growth through increasing OR utilization and case volume. “We continually strive to develop new tools and methods that will enhance the profitability of our centers while also adapting to the changing outpatient surgery environment,” says FSA chief operations officer Thomas A. Newman. He recalls the FSA specialty and case analysis:

1. Take inventory. FSA creates a checklist of all specialties that can be performed at an ASC.

2. Analyze and evaluate. Management performs an extensive cost/benefit analysis, weighing equipment and labor costs against typical revenues provided by the specialty.

3. Determine which specialty is most worth pursuing.

4. Recruit surgeons. Utilize data collected in steps 1-3 and tap existing surgery partners as a primary resource for new partner candidates.

In the case of Huntingdon Valley, a surgeon partner suggested that the center consider adding fertility as a specialty. Based on that recommendation, FSA performed steps 2-4. During the first month of adding fertility, case volume increased 12 percent and overall revenues increased by more than 25 percent. As a result of this exercise, FSA formalized the process and rolled it out to all of its centers.

“Our center was already doing quite well when FSA performed the specialty and case analysis and presented the impact of adding gynecology partners specializing in fertility,” says center administrator Robert Puglisi. “Now, return is even higher as a direct result of adding our reproductive medicine partners.”

Larry Barmat, MD, one of the center’s fertility partners, says, “Reproductive medicine is almost tailored to the ASC environment because the procedures are of short duration and low risk, thereby lending them to being done in an outpatient setting.”

Chairman of the board Robert Mannherz, MD, says, “The addition of reproductive medicine has been positive for the center on several levels. It has increased the utilization of the center and our cash flow, as well as diversified our services to patients.”

By Caleb Germany, Foundation Surgery Affiliates www.foundationsurgery.com800.783.0404

Reimbursement and Billing Compliance Issues

A full financial, business office and clinical evaluation was performed by Surgery Consultants of America (SCA) and Serbin Surgery Center Billing (SCB); however, this case study is reporting only reimbursement and billing compliance issues. The initial findings were determined during the evaluation. The current improvements are results obtained after twelve months of reimbursement management by SCB.

The Medicare-certified, multi-specialty center was open 18 months, has two ORs and performs an average of 100 cases per month; the physician-owned clinic shared the same site with the ASC. The challenges were as follows:

» Practice software not meeting all ASC needs

» Billing outsourced to clinic billing staff resulting in:

•overwhelming volume

•increase in errors due to lack of ASC billing knowledge

» Revenue stream reduced to trickle

» Days in A/R escalating – 97 at time of evaluation

» Claim backlog growing – minimum 7 to 10 days lag time between services rendered and subsequent posting and billing

» Denial rate climbing – 20 percent to 25 percent first time denial rate

» Cost of staffing and supplies as a percentage of revenue continuing to increase because of claim backlog

» Non-compliance concerns mounting

Our findings and recommendations were as follows:

Processes

» Using practice software

» Recommend acquiring ASC software

» No CMS list of ASC covered services or matrix of insurance contracts

» Recommend providing both to scheduler and insurance verifier

» No up-front collections

» Recommend notifying patient of financial responsibility before DOS

Reimbursement

» Billing not up-to-date

» Recommend hiring additional staff or outsourcing

» Coding inaccuracies identified

» Recommend coding audit by certified coder – rebill where necessary

» Not following up on submitted claims

» Recommend audit to determine timely filing, refunds, resubmission claims

Compliance

» Receptionist making patient contact calls

» Recommend moving these calls to back desk for HIPAA reasons

» No notification to payor of out-of-network status

» Recommend notifying payor at time of verification and again at billing

» No advance notification of financial policy to patient

» Recommend providing written policy prior to DOS via phone or brochure

Our evaluation resulted in the following changes:

» Appointed separate ASC administrator

» Changed to ASC software

» Revised fee schedule

» Acquired copies of payor contracts

» Initiated use of bank lockbox

» Created new insurance verification position

» Established process to collect co-pays

» Developed financial policies to handle self-pay patients, payment plans, financial hardship cases, etc.

» Made changes in business office task responsibilities

Improvements included:

» No billing backlog

» Decrease in days in A/R – 58 percent (97 days to 41 days)

» Increase in average net revenue per case – 14 percent

» Increase in average charge per case – 31 percent

» Meeting billing compliance guidelines

By Caryl A. Serbin, RN, SSN, LHRM SURGERY CONSULTANTS OF AMERICAwww.surgecon.com 888-453-1144

Florida ASC Increases Revenues

Acting as a strategic business partner, NovaMeda dedicates an experienced team of experts to help our ASCs grow and prosper, while assuring the best possible experience and outcomes for both patients and physicians.

We recently increased the revenue of our Florida ASCs by employing a comprehensive managed care strategy. Over the last two years, we have renegotiated contracts with major payors in Florida and increased the value of the contracts by as much as 20 percent. This has equated to an increase in revenue of 5 percent to 10 percent for each of our four ASCs in Florida.

Developing and executing an overall managed care strategy can lead to major revenue enhancement and overall improved financial performance of our ASCs. Our strategy is founded upon the principles of maximizing the revenue of all our managed care contracts, assuring that the ASC is getting paid what it should based on the contract, and monitoring the performance of managed-care contracts to ensure the ASC is realizing projected revenue.

Executing our managed-care strategy begins by reviewing our ASC’s total book of business and managed-care contracts. Using best-of-breed financial models, we assign a value to each contract based on payor case/mix and market dynamics, and then negotiate (or renegotiate) each contract to ensure maximum revenue generated for our ASC. An ongoing process, we employ a proactive stance on managed-care contract negotiations to ensure the profitability of our ASCs.

By Lisa Streit, director of managed care, NovaMed www.novamed.com 888-NOVAMED

Implementation, Cons & More

The Practice Partners in Healthcare (PPH) team met with the physicians and began to plan for the implementation of the single-specialty center. During the planning process PPH reviewed volumes, expenses and thresholds in the CON. It was determined that additional surgeons would be necessary to make the center successful. PPH began to recruit additional surgeons to the project. To recruit physicians it was necessary to modify the operating and partnership agreements to make the arrangement fair for all physicians and not have the initial group control the project. PPH negotiated with the groups for a successful operating agreement and partnership arrangement to allow the entry of new physicians.

The ability of a third party to develop an independent plan, negotiate and execute is necessary to assure the original group and joining physicians that the best plan for the total partnership is presented. During the negotiations it was clear that the groups combining were fierce competitors and the role of PPH was to make fair and strategic decisions that would demonstrate to both groups the combined strength in the ASC setting but allowing the market forces to continue in the practice setting. Furthermore, the individuals had to work together to develop block time schedules and utilization of the center that would present the most favorable results. In doing so PPH developed a block time schedule that interfaced with both practices clinic schedule and inpatient surgical schedules. PPH developed a strategy and schedule designed for each group’s physician to follow block time by that same group. In doing so the potential conflicts of another group adding on patients and extending the operative day would only affect that group and not the competitor.

When administrators are considering modifying of implementing block time considerations on the impact of running over to other physician block time may reduce issues by this practice. The physicians could then work within their individual groups to correct reoccurring situations. Additionally, when administrators are planning for block time the utilization of historical operative or procedure times should be utilized when evaluating the duration of the individual block to allow for the anticipated daily throughput for each surgeon.

By Larry Taylor, president and CEO, Practice Partners in Healthcare, Incwww.practicepartners.org 205.824.6250

Joint Venture Feasibility

In early 2005, Alegent Health engaged Health Inventures (HI) to perform a feasibility study for joint-venturing (JV) outpatient surgery services with physicians at their Lakeside and Bergan Mercy Medical Center campuses in Omaha, Neb. HI conducted extensive physician interviews to educate physicians about the JV process and gauge interest. Based on positive feedback from the interviews and HI’s financial forecasts, it was determined that a JV was feasible.

The degree of physician interest showed enough case volume to occupy two new facilities. However, HI determined the most immediate opportunity to establish a JV was to convert an existing two OR HOPD to a free-standing ASC in a medical office building (MOB) on the Lakeside Campus. The conversion process included obtaining licensure and certification to operate as an ASC. This facility would operate for 18 months while a new facility with four ORs and one procedure room was built in the same building.

Throughout 2005, a steering committee with representatives from HI, Alegent Health, interested physician groups and legal counsel met regularly to determine the terms of the operating agreement and the governance structure of the JV. Meanwhile, valuation firm performed a third-party valuation of the existing ASC. Based on financial projections and this valuation, HI and deal counsel developed a private placement memorandum (PPM) and subscription agreement and opened the “offering” for physician investment.

The offering closed in December 2005. Two major surgeon groups and 19 individual physicians invested in the facility for a total of 31 physician users/owners. Alegent maintains 51 percent ownership in the new LLC that leases operating space from Alegent in the MOB.

The owners appointed a management board (MB) and clinical operations committee (COC) as the principal decision making authorities. The MB has equal physician/Alegent representation and the COC is physician-controlled.

In September 2007, the physician owners moved their cases from the upstairs ASC to the newly constructed facility on the ground floor of the MOB. The high subscription rate of the offering and cash flow from the existing facility provided adequate funding for the construction without any term debt financing. Only a line of credit was needed when the facility opened.

By Catherine A. Martin, contract manager, Health Inventures, LLCwww.healthinventures.com 877.304.8940

Compiled by Jessica Barreras

ORs of Tomorrow Can Yield Pay-offs Today

The operating room (OR) of the future is closer than many facilities think. While the level of sophistication in equipment and technology depends upon a facility’s budget and ability to retrofit to accommodate exciting new developments in OR modalities, facilities should be aware of the changing dynamics of OR design and planning.

The challenges of efficient and effective surgical planning are numerous, according to Charles Martin, AIA, and Lynne Shira, RN, BSN, both principals with the Seattle architecture firm NBBJ, who were part of the Designing High-Performance ORs, a day-long symposium presented by STERIS Corporation last October. Martin and Shira explain that owners/operators of medical facilities must find a way to juggle their increasing equipment needs, technology demands and compatibility issues. They see an upward trend among healthcare facilities in the overall demand for additional space to grow their surgical service lines, including new ORs, procedure rooms and the requisite spaces needed to support these new rooms. Today’s facilities require much greater flexibility in the infrastructure and its operational capacity to accommodate more integrated systems both in and out of the OR. Not only can this flexibility create an environment to better foster staff recruitment and retention, Martin and Shira say, but it can improve the patient experience.

The size of ORs has been increasing over time, with the OR of yesterday being about 400 to 500 square feet, with a total department space of about 2,000 square feet. The OR of today and tomorrow is now an average of 600 to 800 square feet, with a total departmental space between 3,200 and 4,500 square feet. The reason for this expansion can differ greatly from facility to facility, but many institutions are creating hybrid ORs that encompass and integrate surgical and interventional services, imaging and clinical services. This kind of OR can accommodate multiple care-delivery models and new technologies, as well as support clinical and administrative uses.

Fred Bentley, practice manager for syndicated research at the Advisory Board Co., says that ORs have been invaded by numerous “space-eating” technologies, such as PACS, C-arms, endoscopic towers, robotics and inter-operative MRIs. The space around the operating table has become increasingly cramped; an OR of 300 cubic feet frequently must accommodate about 115 cubic feet of surgical and anesthesia personnel and about 150 cubic feet of equipment, leaving just about 35 cubic feet of free space. It can be a struggle for facilities to balance comfort and efficiency, Bentley adds, that an OR of less than 400 square feet is now considered to be an anachronism because of its cramped, inflexible space; the 500-square-foot OR is now a tight fit; and an OR with more than 800 square feet is probably an over-indulgence and has the potential for too much dead space. The sweet spot, Bentley says, is an OR of about 600 to 650 square feet, which has enough space to accommodate equipment, but facilitates enough unimpeded circulation throughout the room. To cope with smaller ORs that cannot be immediately retrofitted, some facilities are opting to move some bulkier pieces of equipment out of the OR, such as a mobile C-arm that can stored in a corridor alcove or an adjacent equipment closet, or using utility booms to get equipment lifted off of the floor. Other facilities are opting for more streamlined integrated interventional suites that come turn-key from manufacturers such as STERIS.

A hybrid OR is quickly becoming a favorite option for some facilities wishing to make better use of their OR space. Neurological surgeon Jeffrey Yablon, MD, of the Lake Norman Regional Medical Center in Mooresville, N.C., defines a hybrid OR as “an actual operating room located within the surgical suite that accommodates uncompromised interventional, open and minimally invasive surgery within a given specialty.” Yablon says that a number of trends are driving the hybrid OR craze, especially recent technological advancements and specialists’ desire to expand their sphere of expertise amidst competing services. Another driver is the limited space with which many facilities must contend; Yablon says a hybrid OR can be used for several services or procedures and will provide maximum utilization of space. Yablon also cites increased competition for procedural services, with cardiothoracic moving into interventional cardiology, interventional radiology moving into vascular surgery and interventional cardiology moving into interventional radiology. Another factor is tighter reimbursement; Yablon says a hybrid OR’s flexibility will allow for this space to be fully used with a continual stream of reimbursement dollars. He adds that increased readiness and flexibility results in fewer complications and better outcomes, which ultimately achieves lower costs and higher profit margins.

Hybrid ORs are a win-win situation for surgeons, Yablon says, because they allow for improved patient care because of integrated technologies, and because they provide room flexibility and improved workflow. Nursing staff members like these ORs because they improve staff productivity, workflow and ergonomics, as well as improve room utilization and reduce scheduling challenges. And administrators like them because they help to retain surgeons and nurses as well as optimize capital monies. Yablon adds that hybrid ORs are not without their challenges – including costs, simultaneous competition for the room’s unique resources among surgeons and the need for continual future upgrades – but says the advantages frequently outweigh the challenges.

One healthcare system that has moved boldly into the OR of the future by embracing cutting-edge technology is the Carondelet Health Network in Tucson, Ariz., whose hybrid ORs boast the BrainSUITE iCT, a dual-room intraoperative large-bore, multi-slice CT with sliding-gantry from BrainLAB. Neurosurgeon Eric Sipos, MD, FACS, medical director of the Carondelet Neurological Institute, says the advantages of a two-room CT scanner system include the minimized disruption of the familiar surgical workflow with a maximized CT scanning range providing the widest range of patient positioning. The surgical table position for scanning can be stored prior to draping to avoid collisions with scanner, and once positioned for surgery, the patient is not moved, especially outside of the sterile air field; the anesthesia is fixed and constant throughout the surgical and imaging procedures. With a sliding gantry moving between two ORs, there might be the opportunity for cross-contamination, but Sipos emphasizes that the preservation of the sterile environment is achieved and the patient in the adjacent OR is not compromised in any way. Carl Colombi, technical consultant with the Integrated OR Solutions (iORS) Division of BrainLAB, says the BrainSUITE fully integrated intraoperative CT surgical operating room can facilitate surgical planning and navigation, as well as achieve data management and coordinated equipment integration.

While this level of technology might be reserved for the larger health systems, ASCs shouldn’t count themselves out of the technology game nor assume they cannot replicate a hybrid OR set-up. “Over the years, we have seen more and more surgical cases migrate to the outpatient environment, primarily due to the advances in anesthetic agents and minimally invasive technologies,” Shira says. “Our previous thinking that an outpatient surgery is for ‘minor’ surgical procedures simply doesn’t hold true any longer. The equipment and technology required for minimally invasive work demands a surgical footprint and boom configurations that are not unlike the inpatient environment. ASCs that want to plan for this technology in the future need to remember this as they are planning.” Shira continues, “Recognizing that ASCs are held to a different building standard than hospitals, there should still be planning for proper air exchanges, good surgical traffic patterns with non-restricted, semi-restricted and restricted zones understood with the design. And of course, there can be no compromise on safety protocols and cleaning protocols regardless of the location of the surgical environment.”

Martin and Shira emphasize that the numerous rapid advances in imaging technology are dictating some OR planning and design elements, and note that many imaging interventions are transitioning from diagnostic to therapeutic, thus blurring the boundaries between imaging and surgery. The goal of many facilities is to integrate these departments into a single service with common support in terms of supplies, equipment and staff. If designed correctly, this concept also can eliminate the all-too-common duplication of pre- and post-operative functions, as well as eliminate the duplication of space, equipment and supply storage. Martin and Shira add that integration of staff with similar skill sets can greatly improve operational efficiencies. The integration concept also can apply to universal procedure rooms that specialists can share, as well as universal prep and recovery areas that can accommodate varying patient volumes throughout the day, as well as minimize patient transfers and reduce the number of supply-distribution points.

While we have seen how the physicality of the OR is evolving for the future, it’s important to note that healthcare professionals are following suit. Bentley points to the trend of surgeons and interventionalists becoming one and the same in the future; in the past, these two groups have performed distinct classes of procedures, while in the present, some surgeons are learning select interventional techniques. In the OR of the future, it may be no surprise to see surgeons familiar with nearly all major interventional procedures and perform them frequently; there may also be the rise of the multi-purpose proceduralist. Bentley says these proceduralists can be co-located on the same floor of a facility, or they can even be housed in the same suite, functioning in what Bentley calls a “multi-purpose sandbox” to accommodate all kinds of disciplines.

No next-generation OR can be planned and executed without buy-in from all stakeholders during the project planning and management process, including surgeons and clinical personnel, administration, the architect, the engineer, the IT department and key vendors, according to collaborators Chris Kantorak, technical consulting manager with BrainLAB, Inc., Brian Hartman, project design manager with STERIS Corporation, and Paul Niehaus, project manager with Philips Healthcare. They say that advanced OR suites require space for technology, personnel and ancillary equipment, and that design input from all user groups must be obtained to ensure an optimal environment for all. More specifically in terms of roles among stakeholders, the architect is responsible for evaluating trends such as fixed-based imaging versus mobile imaging, and OR integration; providing for the expansion to a larger OR footprint ; and understanding the changes in sterility needs when going from an imaging suite to a flexible hybrid OR suite, for example. They must also design into the OR future flexibility, such as empty conduits for information/video routing, blank structural plates and positions to accommodate new equipment in the future. To this end, the equipment manufacturer can help plan for the support of new technologies as they are added. In turn, the vendor plays a key role by helping to maximize functionality and the placement of multiple technologies, offering design expertise with proper sequencing of design needs, and planning for both existing and future technologies or evolving clinical procedures.

EMR 101: An Overview of Key Benefits

It’s no secret the Internet is everywhere, so it is a contradiction that millions of Americans feel secure enough to do their banking online, but the U.S. healthcare system is still wary of transitioning health and medical records into an electronic format.

As I sat with Ron Pelletier, vice president of market strategy, at a SourceMedical conference in Las Vegas, he stated, healthcare in general, grossly underutilizes the internet. We discussed one of the main reasons outpatient centers have been slow to change. “On the ASC side, things may not have been broken. Reimbursements were good, now that is changing. These centers are under pressure with reimbursements shrinking and costs going up. Many are saying, ‘In order to stay competitive and keep my business afloat, I need to find better ways of doing this.’ The necessity now is driving them.” states Pelletier.

This series of articles will cover some of the key points that need to be addressed when considering the implementation of an EMR in your ASC, including key benefits of EMRs, what to look for in a provider, how to get your staff ready for this impending transition.

To begin, we should consider the many definitions of an EMR. “There have been so many people out there that have said ‘I am selling an EMR’ and all it is is scanning in your paper and saving it to a computer,” says Craig Veach, senior vice president of operations for Amkai. “Then there are others who have a forms-based system. In the PIIM study, of the original 50 that were considered, none of those were even the forms-based systems because PIIM thought they were not commercially viable. You want something that is a true work-flow manager. Our EMR handles communications within the organization using an internal email and instant message (IM) that allows people to pass info and stay HIPAA compliant. It’s customizable on how it is set up to manage an individual organization’s workflow,” Veach adds. The Parsons Institute for Information Mapping (PIIM) study Veach refers to recently reviewed the top six EMR systems available on the market today.

This brings us to some of the key benefits a facility can gain through implementing an EMR. Michael Nolte, vice president and general manager of marketing for GE Healthcare IT, is aware that there are many questions and concerns from administrators and staff, but says that the long-term benefits will by far surpass the short-term apprehension. “In particular, for a smaller business, it’s a pretty big transition. There are three key benefits. First is the quality of care that you can deliver as a provider; when an EMR is used effectively it’s a really powerful tool. Both from a medical and a legal perspective, you have ensured that you have the right documentation in place that you are making good care decisions and that you have the ability to deliver the best quality of care for your patients. Second, is when our providers get really good at using a piece of software, and are transitioning from something that is usually more paper-based, it makes them more efficient. The ability to use their time more effectively, spending more time in the operating room and less time in the office is definitely enhanced by use of the software. And third is accuracy from a billing and reimbursement standpoint. In terms of getting a clear, well documented perspective on activity so that clinicians are getting paid for what they do everyday.”

On a more fundamental level, there are cost benefits in paper saving. “A lot of these centers are drowning in paper,” affirms Sean Benson, co-founder of ProVation Medical, part of Wolters Kluwer Health. “They are documenting everything on paper and with that come a lot of cost and inefficiencies. That includes the cost of paper, storage of charts, doing a chart pull, and assembling charts. All of those costs are really taken out of the system when you move to an electronic medical record. You are taking a lot of the redundancies out of the system.”

Oftentimes, hearing the benefits from peers can be most beneficial. Daren Smith, BSN, administrator at Fremont Surgical Center in Fremont, Neb., also shares his thoughts about the benefits. “It has so much capability to increase the level of quality of care that you are able to give to your patients. The EHR system capabilities to cross-check medications and make sure that the required information is there. Also, the ability for that information to be shared widely makes it very important. We have also found that it lends some credibility to your organization; that you are ahead of the game, ahead of the curve.”

What should an ASC look for in a provider? Administrators may want to consider what type of ASC in which they are working. If the ASC is a brand-new facility, it makes sense to start with an EMR. “For new ASCs, it’s almost a no brainer in terms of EMR and full-automation. We find that it is a straight forward conversation when you ask a new ASC, ‘why would you start by duplicating the old paper-based workflow when you have a chance to start fresh?’ The question is usually positively viewed since it just makes sense to go electronic from the outset. Existing ASCs are also interested, but have a little more adaptation to existing processes that they might see necessary. Actually, it’s an opportunity to look at current workflow and adapt it a little to realize the benefits from the software,” Don Fallati, senior vice president of marketing, Amkai states.

The existing ASC wanting to convert to an EMR has various items to address. While a new staff in a new ASC can face the implementation of an EMR with ease, staff members in current less technology-based facilities may be quick to decline the idea of learning anything new. The biggest part of getting ready for an EMR system is to realize there will be change. “If the staff, especially the internal champions or the leaders of the organization are resistant to change then they are going to be real problems. If you can identify key leaders within the organization, who understand that change is an important part of the process, and the short term challenges are worth the longer term benefits moving to an electronic system then you are really on the right track.”, states Benson.

Joe Macies, CEO of Amkai adds, “These systems today are modular. You don’t have to swallow the entire package and it doesn’t have to change every single facet of workflow. My two words of advice would be: get started. The EMR benefits are so great over such a long term, and eventually so necessary, I think, in any healthcare provider organization that you can get started and have a fairly graceful migration of your people at a reasonable pace over time when you’ve got modular software that fits users needs. It’s helpful not to approach EMR as having to find the perfect solution.”

Stay tuned to the second part of this series, EMR 202: How to Get Ready for Implementation where SurgiStrategies speaks to some ASCs that are in the process of EMR implementation or have an EMR in place where they discuss concerns challenges and advice.

The Building Blocks of Patient Safety

Patient Safety Awareness Week is March 7-13, 2010, and this observance is always a good opportunity to review the patient safety initiatives you currently take at your ambulatory surgery center (ASC), as well as ask yourselves what you could do to take safety to the next level. I like what Doni Haas, RN and Lorri Zipperer, MA, have created in their “ABCs of Patient Safety” to remind healthcare professionals of common-sense ways to protect patients. With kudos to Haas and Zipperer and the National Patient Safety Foundation (NPSF), here are the ABC’s they recommend:

Accountability is not always about a person.

Blame hides the truth about error.

Cultures must change.

Document facts.

Error is our chance to see weakness in our systems and people.

Focus on prevention.

Gather evidence to support facts.

Hear when you listen.

Investigate cause.

Justice should include compassion, disclosure and compensation.

Knowledge must be shared.

Learning from others’ mistakes benefits all.

Make the effort to look beyond the obvious.

Nothing will change until you change it.

Opportunities for solutions are lost by blame.

Partner with patients and practitioners.

Question until you can no longer ask “why?”

Reporting error is suppressed by blame.

Systems are where practitioners practice.

Think about the blunt and sharp end.

Understand the role of accountability.

Value the patient’s perspective.

Why, Why, Why, Why, Why = root cause.

X-ray vision sees the deeper story.

You can make a difference.

Zeroing in on cause brings us one error closer to zero error.

For more resources, visit the NPSF at www.npsf.org.

Source: Haas D, Zipperer L. ABCs of patient safety. Focus Patient Safety. 2000;3(1):3.

Know Your APCs for ASCs

APCs for outpatient procedures performed in ambulatory surgery centers (ASCs) are part of an averaging and bundling system using CPT® procedure, HCPCS Level II and revenue codes submitted to Medicare on CMS=1500 forms, with UB-04 claim forms used by ASCs to file claims to most other payors. The APC system utilizes “packages” of CPT® and HCPCS Level II codes, based on clinical and facility resources and establishes payment rates for each APC grouping. This means the physical and human resources needed to provide the service and the geographic costs are bundled together using annually adjusted formulae, much as in hospital inpatient billing. Certain medications, services, and durable medical equipment are considered “pass through” and can be reported separately from an APC revenue code.

APCs are assigned based on the CPT® and HCPCS Level II codes reported by the provider for each service. Usually, more than one code will fall into an APC category. More than one CPT® and HCPCS Level II codes can be reported if needed.

But not all CPT® and HCPCS Level II codes qualify. They are all assigned a status indicator denoting the code’s relation to APCs — whether they qualify and how. The ASC must be careful to avoid reporting a code denoted as not reimbursable for ASC services unless a modifier and documentation support it. As a result, a limited group of modifiers are recommended as well. The status indicators can be found on CMS files including the CPT and HCPCS Level II codes, and most commercially published codebooks include them as icons.

Examples of the indicators include the following:

• A: Services furnished to a hospital outpatient that are paid under a fee schedule or payment system other than OPPS. This means fiscal intermediaries are reimbursing this code via a fee schedule not under APCs.
• C: Inpatient procedures. This is the kiss of death for an ASC claim’s success. This procedure is expected to be done in a hospital with the appropriate resources and an overnight stays.
• N: Items and services packaged into APC rates. This is paid under the APC OPPS and payment is packaged into payment for other services; there is no separate payment for this.

Restricted CPT® modifiers include:

• 50: Used when the exact same procedure is done on the exact body part of the opposite side. Also known as “bilateral”. Some insurance companies prefer the biller use the CPT® code twice instead. Ex: 10220-RT, 10200-LT. Check with carrier on which to use. Payment should be 150 percent.
• 51: Indicates multiple procedures were performed. The 51 appends to the second CPT® code and all CPT® codes thereafter. Medicare does not recognize modifier 51 for ASC services as this modifier is for use on physician claims only.
• 52: Indicates reduced services. Use when procedure is not completed as described in the official CPT® description.
• 73: Used when a procedure is discontinued before the anesthesia administration. Patient must be in the room where the procedure would have taken place. Payable at 50 percent of the Medicare allowable rate. Typically seen when patient’s blood pressure arises to a dangerous rate.
• 74: Used when a procedure is discontinued after the anesthesia administration. Patient must be in the room where the procedure would have taken place. Payable at 100 percent of rate. Typically seen when patient’s blood pressure arises to a dangerous rate.
• 78: Used when the patient has to return to the operating room during the global period for a procedure related to the first procedure, such as control of bleeding following a colonoscopy or sinus procedure.
• 79: Unrelated procedure or service by the same physician during the postoperative period. (Same day for an ASC setting.)

Rhonda Buckholtz, CPC, CPC-I, CGSC, COBGC, CPEDC, CENTC, is vice president of business and member development for the American Academy of Professional Coders (AAPC).

Innovation & Excellence Intersect at Renaissance Surgical Arts of Newport Harbor

Even before the Centers for Medicare and Medicaid Services (CMS) issued its new conditions for coverage relating to improved infection control practices in ambulatory surgery centers (ASCs), Bruce Wallace and Anthony Pings knew that infection prevention would be the cornerstone of their latest development project — a world-class multi-specialty ASC that would be destined to set the bar enormously high in terms of innovation, patient care, and surgeon and staff satisfaction.

Wallace, the CEO of Congero Development, architect Ping, the CEO of Anthony C. Pings and Associates, and Kathy Just, vice president of Congero and interior designer on the project were the driving forces behind Renaissance Surgical Arts of Newport Harbor, LLC, designed to be a preeminent medical facility led by notable surgical specialists working with cutting-edge operating room technologies within an innovation-rich, patient-focused, healing environment.

“This facility was truly designed around exceptional patient outcomes,” Wallace says, “and much of that has to do with integration of some newer equipment and emerging technologies that were not readily available before in the U.S. It also more fully addresses the needs of healthcare providers, as we have identified the challenges that their lifestyles incur and we have provided solutions for them.” In addition, Congero desired to bring a center of excellence to Orange County, California, as well as a project that was scalable to emerging technologies as they became available, with minimum invasiveness to the operations overall.

This 360-degree approach starts with the patient. “I conduct a lot of direct research with patients and physicians to determine what makes them happy,” Pings says. “We don’t ask patients what they want; instead, we ask them to describe their experiences and that’s when they are going to tell you what works and what doesn’t. Nobody wants to have surgery, so when we work on a project like this, we want to provide patients with the physical and emotional support they need.” To that end, Just worked to ensure that Renaissance was designed as a healing environment, with a sophisticated and rich décor that promotes pre-operative calm and facilitates post-operative recovery. To maintain normothermia and ward off post-surgical complications, patients are provided with forced-air heated garments and blankets, as well as IV solution warmers.

Pings adds, “We start a project like this from a patient-focused standpoint and blend that with needs of the clinical staff to create solutions that supports both parties in the best possible way.” For example, the center places a high priority on patient privacy; patient entrances and exits are separated, and private spaces have been created all throughout the pre- and post-surgical experience. “We believe in giving patients separate waiting areas,” Wallace says. “Because we are multi-specialty facility we don’t want patients sitting just anywhere — we don’t want a woman who has had a mastectomy sitting next to a woman having augmentation.” Wallace continues, “We accommodate patients in a tremendous number of ways, including doing what we can to make them feel welcome, lower their anxiety and make them comfortable. I want them to feel as though the staff and center was there for each of them personally.”

From the time the patient is prepped for surgery until recovery, aseptic technique is an omnipresent concern. “Infection control considerations were integrated into every decision we made,” Wallace affirms. That starts with the replacement of traditional gurneys with operating tables that first function as patient transport systems and then transfer – along with the patient – to a fixed base in the OR. Not only does this system – the first of its kind in the U.S. — save as much as 40 minutes in transfer time, but it helps eliminate cross-contamination during patient transfer. What’s more, the German-made tabletops by Trumpf can be completely sterilized.

“The tabletop you are on was never shared by another person between being sterilized,” Wallace emphasizes. “A classic place where bacteria transfers is the OR table itself. At other facilities, someone goes in with a squirt bottle between patients and they have 5 minutes to sterilize the table and the fact of the matter is that the table is definitely not sterilized in 5 minutes.”

Recognizing that proper decontamination and sterilization of medical devices and surgical instruments eliminates infections and produces operational cost-savings, the facility features a system that has taken patient and staff safety to the next level. Driven by selective automation, Renaissance’s sterile processing department, supported by Belimed equipment, is able to achieve efficiencies in the way surgical instruments are transported, washed and decontaminated, sterilized, reassembled and contained. Upholding the dedication to stringent infection control practices, instruments are sealed in trays and then pass from a “dirty” room to a “clean” room where they are sterilized and processed further, all in a department that has been designed with the goal of becoming more environmentally responsible in water and energy usage. All instruments have been marked with RFID technology, bar-coded, catalogued and tracked from purchase, and when an instrument approaches a sterilizer, the cycle is automatically set to the individual manufacturer’s care parameters – thus ensuring a longer instrument life and a repeatable sterilization process that ensures uniform processing and meets infection prevention standards. According to Pings, the backbone of the facility is a chamber sterilization system comprised of two discreet, low-intensity, stand-alone sterilization areas located between the operating rooms, and a central, high-intensity processing area in the operating corridor. The combined effect of the chamber system, sterilization process and smart utility use, allows for the elimination of up to eight full-time employees, with processing cut to a fraction of standard times while delivering vastly improved sterility assurance.

“Our system reduces staffing in central sterile (CS) and eliminates a lot of the cross-paths that exist elsewhere,” Pings says. People think if you are six feet away from dirty, you are OK, but those numbers don’t work anymore. Hospital CS departments are essentially one big room with workstations, and even the best-trained staff will violate those boundaries. That’s why the chamber sterilization concept works.”

Contributing to maintaining the line between sterile and unsterile is Congero’s proprietary LED system built into the floor and walls with a laser that resembles a light fixture placed before each terminal end of the OR corridor; this system replaces the traditional red-line tape used to delineate non-sterile areas from sterile areas. The center also features sterile lounges in the sterile corridor for staff to use on surgery days without having to gown out into non-sterile cover-ups to conduct business outside of the OR corridor. Staff can use phones and computers in the area while saving vast amounts of time in gowning out both ways; it adds up to a cost savings of approximately $8 per trip per staff member.

Contributing further to physician convenience is an adjacent, separate entity, the “hot office” area, instead of a conventional medical office building set-up where surgeons can have a place for pre-op and post-op patient consults, a design that extends the full use of the facility to office-based surgery convenience, according to Pings, who notes, “When you provide ways for physicians and staff not to work harder but to work more efficiently, they prefer it, and they are happier people.”

Pings continues, “What I push for the most is an understanding of the different needs of everyone involved at the center, and that includes surgeons. That physician lounge is one way to provide them with the productivity tools they need without having to leave substerile. We wanted to give them the support tools they need within their domain; for example, while they chart they can observe monitors that assist them in real-time tracking of pre-op and post-op patients. Go into the average surgical corridor and you see surgeons sitting on stools trying to have some sort of defendable territory between cases, and that’s neither appropriate nor conducive to surgeon satisfaction.”

The center is powered by a sophisticated IT platform that enables a number of progressive processes such as ultrasonic tracking of patients, staff and physicians for quick-location purposes; biometrics identification for narcotics dispersion; Bluetooth wireless monitoring of patient vitals; advanced telemedicine capabilities; RFID-driven nurse call system and much more. The IT capabilities extend to center management and operations such as inventory control, setting par levels and supplies ordering, plus patient scheduling, patient flow and H&P, and coding and billing, all handled with HIPAA-approved transmittal processes. The center’s eight ORs are equipped with state-of-the-art LCD displays, booms and an audiophile system, as well as CT and MRI in-room imaging. Renaissance is also home to a showroom and telemedicine center of excellence for Olympus Corp., which has installed a digital integration system utilizing rigid and flexible scopes, with one cart handling multiple surgical specialties.

How Renaissance fit into the existing Pacific Medical Plaza building is an achievement in itself, Pings says, since the entire project was a retrofit and where the anchor of the building was the nearly 19,000-square-foot ASC. “We were able to be extremely aggressive in our design in the allotted square footage,” he says. “The original ASC design had elements that were extremely challenging when you realized our space limitations. The design had to be created around the main stairwell in the very center of the structure and we relocated a second stairwell from one side of the building to the other.”

The innovations abound at Renaissance, which required a coordinated process of value engineering driven by the collective experience of the development team to deliver a cutting-edge ASC for very close to the cost of a standard facility. “We knew the challenges related to cost control for an ASC as ambitious as this,” noted Wallace. “However, what we could not have anticipated was trying to accomplish this amid one of the worst economic environments in U.S. history.” The upfront effort will continue to be realized through much lower operating costs thanks to better outcomes, automation and other inherent cost controls. “Cost is an overriding concern at any center but you must remember that upfront costs are ameliorated by cost savings in patient safety and efficiency,” Pings notes.

Key to Renaissance’s success is the partnership between stakeholders, according to Wallace. “This center is a culmination of many years of collaboration with Tony and Kathy as well as the relationship with a cooperative landlord who was of tremendous help in the development process and extremely supportive through the financial crisis. It was also critical to have physicians buy into your vision. We couldn’t have done it without the overwhelming support of the physicians; most of them put their money in, signed on the dotted line and sat back, leaving us to do what we were supposed to do.”

According to Wallace, the center is 70 percent physician owned, with Congero operating as a minority management company. Being a physician-driven facility, the opportunity to do things differently presented itself repeatedly, including how the center was staffed. “We created our own registry and share our staff with other facilities in the area,” Wallace explains. “By doing so we can reduce the labor-related load on the facility; for instance, on slower days with a lower case volume, we can share our staff with other facilities in the area. We believe having people standing around is bad for morale and bad for efficiency’s sake, and this arrangement is better for staff, if they need to take a day to meet personal or family obligations. The registry concept is a better way to accommodate staff who can work the hours they would like to work. And it allows physicians to have a schedule that fits their lives, too. It creates a real team spirit. We also incentivize staff to help increase the efficiency and profitability of the center, linking together their individual success and the success of the center for even better outcomes and operations.”

Making Infection Control Central to an ASC’s Operations

In my parallel life, I also edit one of our company’s sister publications, Infection Control Today (ICT) magazine, so as you can imagine, infection prevention in all healthcare environments is dear to my heart. I have been following closely the new conditions for coverage (CfCs) issued last year by the Centers for Medicare and Medicaid Services (CMS) addressing infection control in ambulatory surgery centers (ASCs), and the sense of panic that these CfCs have triggered. ASCs have traditionally enjoyed a very low infection rate, but some rather high-profile infectious outbreaks at outpatient facilities prompted a greater investigation by the government into the state of infection control at surgery centers and a few bad apples have forced a new regime. But perhaps that’s a very good thing in disguise. It’s true that human nature being what it is, people don’t always do what they are supposed to do, and so rules are made to enforce mandatory compliance. It’s always a shame when doing the right thing must be legislated instead of met voluntarily, but the bright spot in the new CfCs relating to infection control is the hope for even better patient outcomes — a distinct hallmark of the ASC industry in the first place.

In this issue you’ll meet Bruce Wallace and Anthony Pings, two people who have made infection control the focus of every decision they have made in the design and development of Renaissance Surgical Arts at Newport Harbor, LLC, a brand new multi-specialty ASC that will surely be a destination for healthcare in the Orange County, California region. Central to the center’s long list of innovations is the numerous concessions made to making infection control an imperative, from the multi-chamber sterile and substerile areas in between the operating rooms, to the extensively automated surgical device and instrument sterilization systems, to the use of touchless scrub sinks and surfaces impervious to bacteria.

Working with Distributors What You Need to Know

According to the Healthcare Distribution Management Association (HDMA), the U.S. healthcare system saves nearly $32 billion each year with distributor’s streamlined, aggregated ordering and efficient shipping logistics. SurgiStrategies spoke with ERI, a medical imaging equipment distributor to discuss some key components of what a distributor has to offer.

Q: describe the key roles of a distributor in the outpatient marketplace — how do they serve the niche between manufacturers and the end user?

Simply stated, a distributor must know what they are selling and the products’ appropriate applications. This permits a customer to receive accurate answers to presale questions allowing them to purchase with confidence. Furthermore, post sale support is just as critical. We often work with customers to properly integrate their new equipment and use it to its fullest potential. Given our extensive experience and our close working relationships with manufacturers, we can recommend best installation and operating practices to provide an optimal end-user experience.

Another important role for vendors is to serve as the flexible middleman between manufacturers and end-users. Given the manufacturers’ high overhead, they typically require significant minimum orders and demand very specific payment methods. Furthermore, manufacturers will often implement irregular production cycles, causing inventory surplus and shortages that are not readily apparent to the customer. This in turn may cause significant delays when ordering equipment and supplies. We anticipate these cycles and account for additional environmental factors. For example, we see a significant increase in gel-warmer sales as winter approaches and we adjust our inventory accordingly.

Q: can distributors bring value – added services that a direct – from – manufacturer approach can’t, and why?

In addition to providing purchasing advice and post-sale support, we also offer free equipment demonstrations and trials. This has been a very effective sales tool for our company and illustrates our confidence in our products and support. Customers are afforded the opportunity to put our equipment through their daily processes and workload. Relative to the manufacturers, our company is small by comparison but we believe that works to our advantage. Customers won’t become lost in the inherent bureaucracy of large companies, which allows for immediate and straight forward service. Customers frequently call in with a desperate need for equipment to be delivered the next morning. Our small stature allows us to quickly process and ship their order for overnight delivery.

Q: how are distributors addressing the perception that distributors are the expensive middleman in the healthcare supply chain, so to speak?

The first obvious solution to the “expensive middleman” perception is to not be expensive. We maintain low prices by controlling our overhead business expenses and make smart purchasing decisions from our manufacturers. The next step is to fighting this perception is to promote our value added services discussed above, i.e., equipment demonstrations, flexibility, and prompt customer service. Lastly, we believe we save our customers money by advising the right equipment for their needs and not pushing equipment that is disproportionate to their requirements.

Q: what advice can distributors offer to customers in terms of savvy purchasing practices?

Shop around for lower prices! This difficult economy has caused a strain on everyone’s budget and you may be pleasantly surprised to find that you can save a significant amount of money by searching the Internet for a better deal. Also, ask your distributors for bulk discounts or flat rate shipping options. You may be able to save money on shipping costs by combining regular orders. Do not be afraid to call and ask questions if it’s your first time ordering this particular piece of equipment. It also helps to be knowledgeable about the equipment’s intended application and any other equipment that it will be connected to. If you feel outside your comfort level, encourage the end user to ask these questions directly.

Advocacy Committee Creating Unified Voice for the ASC Industry

In an effort to continue to represent the ASC industry on Capitol Hill and to create a bridge between two existing organizations, the ASC Advocacy Committee was launched last August and has been busy educating Washington policymakers about the value of ambulatory surgery centers. The committee is sponsored by the ASC Association and by the ASC Coalition, an affiliation of ASC associations and ASC management companies.

The Advocacy Committee includes ASCA, some of the largest state ASC associations, and more than a dozen major ASC companies. The funding is provided by the members; separately, ASCA, many state ASC associations, and many companies have their own PACs for direct political giving, according to Andrew Hayek, president and CEO of Surgical Care Affiliates and chair of this new committee.

Despite a health reform-related injection of chaos on Capitol Hill, Hayek says that the committee’s objectives have remained steadfast: “First, to create a clear, compelling message of how ASCs benefit the healthcare system; second, to hire the resources to help communicate this message (e.g,. PR firm, lobbyists, external studies); third, to create an active grassroots network among ASCs to communicate with legislators and policymakers; and, fourth, to create an open, collaborative organization, in which any parties interested in supporting ASCs are welcome to join us and participate.”

One of the most important roles of the committee is to educate lawmakers and to tell the ASC story. Hayek says the committee is in the design process of a PR campaign that will launch early next year. “We have added greater lobbying resources to help us communicate with legislators, policy makers and regulators in Washington, D.C.,” Hayek adds. “We have activated a much greater degree of coordinated grassroots efforts, and we are in the design phase of a grassroots database that will help us take this coordination to a much higher level. Lastly, we are coordinating our messaging across ASCA, state ASC associations, and companies to a greater degree. All of these components work together to help us tell our story in Washington, D.C.”

Another critical item on the committee’s agenda is to help define and promulgate the role that ASCs can play within the context of healthcare reform, and to continue to address key issues of reimbursement and physician ownership. “We have been active in communicating the very positive role that ASCs play in the healthcare system — providing outstanding clinical care at a lower cost to beneficiaries and Medicare,” Hayek says. “We have been active both on the Hill and with the Administration in advocating for higher ASC reimbursement rates, to help facilitate a greater migration of surgical cases from the HOPD setting to ASCs, which will help improve care and save beneficiaries and Medicare money.”

Hayek continues, “We have also engaged in conversations sharing the value of physician ownership in ASCs — ensuring the highest levels of patient care and greater efficiency in the delivery of services. One of the reasons that ASCs provide such outstanding care and simultaneously operate so efficiently is that physicians are ultimately responsible for the operations of the ASCs — clinically, operationally and financially. This leads to aligned interests in ensuring outstanding care, delivered in the most efficient manner.”

Counted among the ranks of the most ardent supporters of the committee is William Kennedy, senior vice president of business development. “We were original members of the ASC Coalition and are now active and enthusiastic supporters of the new group headed by Andy Hayek,” Kennedy confirms. “What we hope to accomplish is to make our industry known in Washington, and that includes CMS as well, so that they understand the good work that surgery centers are doing in terms of delivering low-cost, high-quality patient care to the community. And that we are also a very attractive surgical service at a very attractive price for very attractive outcomes. We want to ensure that our voice is heard above all of the noise made by the hospital associations.”

Kennedy emphasizes the importance of advocacy efforts at the grassroots level as well, something that physicians, administrators and nurses can accomplish to help protect their livelihoods. Because so many issues are springing up at the state level, Kennedy encourages ASC owner/operators to kick complacency to the curb and get involved.

“Many people think that issues impacting our industry are going to start at the state level and will proliferate, rather than coming down from Washington,” Kennedy says, “so there’s a critical need to be involved in your state ASC association.” Kennedy points to the restrictions on ASCs in New Jersey as a recent example. “Legislators are looking to restrict physician ownership and limit the surgery center industry. Grassroots advocacy will ensure that your voice is being heard by your Congress members. There are numerous ways to do this, and our industry has become much better at writing letters to legislators and providing some Congressional pressure. Holding open houses is a great way to get our story to the community; and when it does get out, it is very appealing to healthcare consumers. ASCs make good sense because we deliver the same results for about 40 percent less.”

While not every physician feels that he or she is cut out to be an industry advocate, Kennedy says the industry cannot afford to be bereft of its physician champions. “There’s a core group that galvanizes around advocacy efforts and then there are other people who say someone else can do the work — it’s kind of like public radio,” Kennedy says. “It’s critical to show physicians how not becoming involved can hurt them in dollars and cents. But at the same time it’s also about giving them a sense that they can make a difference. One of the things we are spending a lot of time on now is going back to people who have sent e-mails and letters to legislators to ensure they know their work has paid dividends.”

Hayek welcomes any ASCs or organizations with an interest in the ASC community to join the ASC Advocacy Committee’s efforts. “The Advocacy Committee is designed to be open and transparent — and we welcome both financial support and grassroots support,” he says.

Hayek can be reached at (205) 545-2755 or andrew.hayek@scasurgery.com. Or contact the committee’s executive director, Marian Lowe, at (202) 266-2606 ormarian.lowe@shcare.net.

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