OASC | SUBSPECIALTY SERIES

Integrating a New Subspecialty Into Your Surgery Center

Insights from ASC owners who have expanded their offerings

By Virginia Pickles, Contributing Editor

Does your long-range plan include opening your surgery center to other ophthalmic subspecialties? How will you know when the time is right? Which subspecialties should you consider? How do you go about finding a good fit? Although there’s no single blueprint for surefire success — numerous variables will be unique to your center and your business plan — some of the factors involved in bringing in a new subspecialty are universal. We asked the owners of two ophthalmic ASCs to share their insights on the timing and benefits of diversifying.

Anticipate Expansion

Expansion is a natural result of success, says Jay S. Pepose, MD, PhD, medical director of Pepose Vision Institute in St. Louis, and case volume, revenue, and available block times all factor into any decision to expand the scope of a surgery center’s offerings.

“It takes about 3 to 5 years for a practice to mature, and after a certain number of cases — for cataract surgeons, roughly 1,000 procedures — an ASC becomes profitable,” he says. “At that point, fixed costs are known and surgeons and staff are performing efficiently. Consequently, routine cases are taking less time and your ORs may be inactive for a portion of the day. If your center is underutilized, it makes sense to bring in surgeons from other subspecialties, as long as the surgeries can be performed efficiently.”

Another consideration, Dr. Pepose says, is the finite number of cases a surgeon can perform in a given time frame. “You don’t want to become the limit to your growth,” he says. “If you tell a patient he has a cataract and can no longer drive a car but your first available surgery date is 3 months out, it’s likely he’ll find another surgeon. We anticipated that we would need to bring additional doctors on board to continue to grow.”

Dr. Pepose and his partner designed their surgery center to be multispecialty from the beginning, and they didn’t limit its potential to ophthalmic surgeries. “We made some accommodations during construction, just in case,” he says. “For example, we had the ceiling reinforced to bear the weight of a ceiling-mounted microscope, something that might be required by a non-ophthalmic specialty, such as an ear, nose, and throat surgeon. We really tried to keep our options open, because you never know what your needs will be in the future, particularly in the current healthcare environment.”

Benefits of Diversifying

Andrew Gillies, MD, is managing partner for Dedham Ophthalmic Consultants and Surgeons and Surgisite Boston, where cataract, cornea, glaucoma, oculoplastic, and retina surgeries are performed. Dr. Gillies says that keeping your OR running at close to capacity by inviting in surgeons from other specialties has advantages beyond avoiding down times.

“As reimbursements decrease and costs increase for cataract surgeries, diversifying the types of procedures you offer in your surgery center is a smart financial decision for the long term,” Dr. Gillies says. In addition, he notes, one-stop shopping for vision care is appealing for patients, particularly when they require surgery. “Most eye specialists in our region are in downtown Boston, and patients must go into the city not only for their surgeries but also for post-op care,” Dr. Gillies says. “As an alternative, we offer patients accessibility to state-of-the-art retina surgery, cornea transplants, and so on, at our suburban ASC. Our ability to meet all eye care needs has increased our brand awareness in the community, resulting in more referrals.”

Another benefit of offering a variety of eye surgeries in your ASC has to do with the rise of accountable care organizations (ACOs), particularly in light of changes to reimbursements for facility fees in hospitals. Dr. Gillies explains: “Hospitals are eliminating eye surgeries in an attempt to free up OR space for more lucrative procedures. ACOs must find a way to cover eye surgeries cost-effectively. Thus, a surgery center that can offer bundled services for cataract surgeries, including any associated retinal or corneal complications, has a distinct advantage.”

Which Subspecialty?

About two and a half years after opening their practice and surgery center, Dr. Pepose and his partner invited a retina specialist to join them. Several factors influenced this decision, including the results from a review of some practice statistics.

“Looking at the number of patients we were referring out, we found that our number one referral was for retina, followed by facial plastics and glaucoma,” Dr. Pepose says. “We realized that if we were sending out that many retina cases, we already had a strong enough base in the practice to support a retina specialist. We felt this would be an attractive environment for a retina specialist, and it would mitigate our risk while increasing the volume and profitability in the ASC. It was a win-win decision on both sides.”

In general, Dr. Gillies believes retina is an attractive subspecialty to consider. “While reimbursements for cataract surgeries are decreasing, retina revenues are increasing, and retina surgeons who are no longer operating in hospitals are looking for new homes,” he says. “The initial cost of a vitrectomy unit can be considerable, but other than that, case costs and reimbursements are good. With glaucoma, the drainage devices are costly, and I believe the facility fee is decreasing, so carrying costs may be substantial. For corneal transplants, the corneas are donated, but the cost to acquire them can run between $4,000 and $5,000.”

When weighing the economic pros and cons of retina, Dr. Pepose notes his surgery center had a valuable asset. “We were fortunate to have the Stellaris system (Bausch + Lomb), which can be upgraded for use in anterior, posterior, and combined procedures,” he says. “Being able to use the same device for anterior and posterior surgeries has been cost-effective. We don’t need two different pieces of equipment, requiring two maintenance contracts and taking up twice as much floor space.

“Overall, retina surgery has become much more efficient,” Dr. Pepose says. “The instrumentation is microscopic. Trocars self seal, and, for the most part, turnover is quick, particularly for puckers, holes, and peels. Case mix is important, however, as severe diabetic retinopathy or cases that require silicone or perfluorocarbon may require hours in the OR and are less profitable, so they may be better suited to the hospital setting.”

Find a Good Fit

Once you’ve decided which subspecialty will best suit your surgery center’s needs, recruitment begins. If you have a deep pool of local talent, you may decide to approach surgeons in your community. If you anticipate the need to cast a wider net, you may want to employ a recruiter. Regardless of your approach and the subspecialty involved, the basic requirements will be the same.

“There’s no question you want someone who’s well trained with good technical skills, coming from a good fellowship program,” Dr. Pepose says. “The next most important trait is good people skills. Our surgeons need to get along well with patients, staff, and other doctors. They need to be self-starters with a strong work ethic and the desire to grow a practice, which requires meeting with optometrists and ophthalmologists in the community and being personable to patients to ensure continued referrals.”

On the other side of the interview table, so to speak, surgeons will also be looking for a good fit. Dr. Gillies notes an ambulatory surgery center is an attractive environment, particularly when compared to the hospital setting, as an ASC can offer quick OR turnover, the latest instrumentation, and well-trained surgical staff solely dedicated to eye surgeries. Dr. Gillies cautions owners to keep the big picture in mind when finalizing the details of a new relationship and to not quibble over relatively minor details. “Why haggle over a $200 instrument if that’s what you need to get a top-notch surgeon in the door to do cases that will increase your profitability?” he says. “By meeting your surgeons’ needs, you’ll maintain a positive atmosphere in your ASC. The surgeons will be happy, because they’ll be able to operate in a manner to which they are accustomed, just in a different setting. They’re more comfortable. They’re more relaxed. There’s much less stress on the OR staff. Patients are happier. And the efficiency is there.”

In fact, both Drs. Gillies and Pepose agree, if there’s a single trait that will differentiate one highly skilled, personable eye surgeon from another in an ASC, it is efficiency. How do you find efficient surgeons who meet all of your other criteria?

“Having worked in my community for more than 20 years, and having operated in hospitals, I can tell you there are some surgeons who take hours to perform a case, while others in the same group would have completed the same case in half the time,” Dr. Pepose says. “That makes a giant difference in a surgery center’s bottom line. If a case is taking twice as long, our personnel expenses are doubled, while reimbursement for that case stays the same.”

Keep in mind that efficient does not equal rushed, says Dr. Pepose. “Rushed is not a good thing. Rushed leads to complications and bringing patients back to the OR. By efficient, I mean a surgeon who is meticulous and methodical and who consistently achieves excellent outcomes with maximum productivity and minimum wasted effort or expense.”

A Reimbursement Reminder

If opening your surgery center to other ophthalmic subspecialties makes sense for you, Dr. Pepose has a final word of advice. “Like any other venture, an ASC is a business, so you need a business plan,” he says. “You need to calculate your breakeven point, determine the appropriate case mix, and, in this day and age, you must determine your reimbursements per insurance plan, because they can vary tremendously.”

For example, when his surgery center first opened, retina cases were referred out, so negotiated contracts with various insurers didn’t address the specifics of retina surgery. “At that time, we negotiated with much more focus on reimbursement for cataract surgery and corneal transplants,” Dr. Pepose says. “We weren’t as cognizant of reimbursements for vitrectomy or retinal detachment, because we were not performing those procedures. When you bring in a new subspecialty, you may have to renegotiate some of your contracts.”

Continued Growth

Offering a full spectrum of ophthalmic surgeries has ensured continued growth for Dr. Pepose and Dr. Gillies and their respective practices and surgery centers. Dr. Pepose now has a facial plastic surgeon affiliated with his practice and operating in his surgery center, and he is currently seeking a glaucoma specialist. Dr. Gillies’ group is planning to open a second surgery center northwest of Boston to accommodate surgeons and patients in that area. “Opening our surgery center to all of the ophthalmic subspecialties has been a real practice-builder for us,” Dr. Gillies says. “It enables us to refer patients, regardless of their needs, to surgeons we know and trust.” ■