asc management
Seven Steps to Building Your ASC
We learned how to plan, build and operate an ASC through experience. What we learned can help you.

By Larry Patterson, M.D., and Ray Mays

In this, the last article of this series, I'll discuss what I think are the most valuable "lessons learned" from our experience in planning, building and opening our own surgery center. I've condensed what we've learned into the following seven essential guidelines for success:

Don't try to do it alone. Put together a good team. Your team is an investment, not an expense. Each member of the team needs to bring a certain expertise that contributes to the overall mission.

This begins with a consultant. The consultant first needs to assist in determining if your project is feasible and from there help develop a plan of action. Next is the architect. The architect and the consultant must be able to work together to design an ASC that fits your particular style of practice. Only after this process is completed can a budget for the project be determined.

Build a cash flow model. About 2,400 years ago, the famous Chinese military strategist Sun Tzu wrote: "The general who wins a battle makes many calculations in his temple before the battle is fought. The general who loses a battle makes but a few calculations beforehand. Thus do many calculations lead to victory, and few calculations lead to defeat."

The spreadsheet is the most powerful business tool ever created. Use it. Build your model and then "what if" every possible scenario. Challenge your assumptions. Know what the "worst case" is. Make sure that everyone understands the cash flow demands while the project is in planning, in construction, and especially in the first few months of operation.

Bring the contractor in early. The contractor's knowledge of the local market is valuable, and can save time and money during the planning stage. He's especially valuable in determining a budget and a timeline. In our case, a simple suggestion about a style of brick that was more available in our area resulted in a savings of several thousand dollars, but cost us some time added to the project.

Have financing in place. Before the first shovel of dirt is moved, develop a good working relationship with a lender. The lender should understand what it is that you're doing and how you plan on doing it. Banks want and need to lend money to you, but they want and need to have that money paid back.

Prepare your package from the banker's point of view and use bankers language, not ophthalmic language. Include your accountant and banker in your team and the process should go fairly smoothly. Be prepared for the lender to get nervous toward the end of the project, especially if there are cost overruns (which there will be) and project timeline extensions (which there will be). Keeping the lender's representatives informed will calm them down and keep them confident in your team.

Hire the nurse administrator at least 3 months before opening. This person needs at least this long to organize, schedule and coordinate inspections, hiring, training, in-servicing, ordering, stocking, inventorying, writing the operational manuals and preparing for the first surgery. This is a hectic and frustrating time, give yourself plenty of time to get everything done.

Get busy with third-party payers. Contact your provider reps early and keep them informed. Prepare applications in advance so that as soon as your state and Medicare assign your number, these applications can be sent.

Lastly, get efficient. It's OK to make mistakes, but learn from them. Visit other ASCs. Have your staff attend seminars. Have your consultant assist in developing plans, policies and procedures that make your operation smooth and efficient. Everything counts, each bandage used unnecessarily affects profitability.

Larry Patterson, M.D., is practice owner, and Ray Mays is practice administrator of Eye Centers of Tennessee, a general ophthalmology practice serving 300,000 residents of middle and east Tennessee. You can reach Ray Mays at raym@ecotn.com.

In May 2002, Eye Centers of Tennessee, LLC, a five-location practice serving a large portion of middle and east Tennessee, began operating its own ASC. Each month of this year, practice owner Larry Patterson, M.D., and practice administrator Ray Mays provided information they believe will be helpful to other practices considering planning and building their own ASCs. This column is the final one of the series.