Next to hiring skilled surgeons and clinicians, arguably the most important task of ophthalmic ASC leaders is acquiring the specialized technologies used to treat patients. It shouldn’t come as a surprise, therefore, that many centers take special care in evaluating and acquiring new equipment.
The Central Point Surgery Center in Dallas is one of them.
Jeffrey Whitman, MD, president and chief surgeon of the Key-Whitman Eye Center, and one of the owners of the Central Point Surgery Center, says major technology acquisitions occur about every 4 or 5 years and are typically triggered by one of two things: the deterioration of current equipment or advances in technology. He says acquisitions generally begin with a recommendation or request from a surgeon or other staff member.
“One of the surgeons, for example, might come forward and say he or she just read about this wonderful technology, and it’s only $280,000,” he says. The proposal is then brought to the ASC’s four-member purchasing board, which consists of three owner-surgeons and the ASC’s administrator.
“We need to decide if this is a good technology for us. We check to see if another ASC has it, so we can see it,” he explains. “We then put our heads together and decide whether or not it makes sense. If there is a substantial cost involved, it’s never a one-person decision.”
Indeed, all major users of the ASC participate in the decision-making and acquisition process, including trial periods, to some degree. Depending on the product being considered, other personnel and support staff — including nurses and technicians — may also be asked for their input, says Nikki Hurley, director of the Central Point Surgery Center.
“All of the end users need to be involved at some time in the decision-making process,” Hurley explains. “Even the technicians who use the equipment.”
The final decision on whether to acquire any given piece of equipment rests with the surgeons. A total of 11 surgeons use the Central Point Surgery Center; seven are part owners of the ASC.
“We do ask every physician because our volume counts on their use,” says Hurley. “For our last phaco purchase, we solicited opinions from a couple of surgeons who also operate at other centers. It was equipment they were already using elsewhere, so they were completely fine with it.”
The process described by Hurley and Dr. Whitman reflects that of many other ASCs.
A recent survey conducted by Ethis Communications on behalf of PentaVision Media, publishers of The Ophthalmic ASC, found that almost 60% of ophthalmic ASC facilities reported having an established process for identifying, evaluating, and purchasing diagnostic and capital equipment, surgical disposables, and pharmaceuticals.
The survey also found that, in many ASCS, that process is overseen by a committee often consisting of the surgeon-owners, the CEO, practice administrators, and, if the center has one, a VP of finance. Sometimes, technicians and surgical coordinators are also part of the committee.
Michael Jones, MD, an ophthalmic surgeon and a former owner of Illinois-based Quantum Vision Centers, says he isn’t surprised by the results.
“There’s got to be some kind of structure,” says Dr. Jones, who has owned and operated multiple ophthalmic ASCs in the past and currently owns two. “What I can’t tell you is exactly what that structure should be because every surgery center, even the ones I have owned, is a different animal — with different ownership structures, different politics, and all of that.”
Nevertheless, as the old saying goes, too many cooks can spoil the broth, and Drs. Jones and Whitman both caution against soliciting too many opinions — especially in ASCs with large numbers of surgeons and staff.
“If you have 20 people who are not owners, it can be like herding cats,” Dr. Whitman says. “Everybody wants what they want.”
Dr. Jones agrees. “The more mouths giving opinions, the more opinions you have to address.” Instead, he recommends starting any major purchasing process by querying the most progressive surgeons — those most invested in staying on the cutting edge of treatment. If the most progressive surgeons, don’t see the value, it’s probably not worth going to the more conservative physicians or other staff members, he says.
Top Factors in Purchasing Decisions
With respect to the factors that figure into an ASC’s decision-making process, both Drs. Whitman and Jones said the technology’s impact on patient outcomes is their number one priority.
“We always want to ensure that it’s going to make the surgery better,” says Dr. Jones. “If a new technology isn’t going to improve surgical outcomes, there’s really no reason to get it, even if it’s a ‘money maker’ for your surgery center.”
Only after meeting that standard, he says, should cost, potential revenue, and other factors come into play. The survey found that the top five most important factors considered by ophthalmic ASCs in evaluating and purchasing equipment are:
- Initial cost of acquisition
- Expected life of the equipment
- Cost and frequency of maintenance
- Revenue generated by the equipment
- Finance terms
“What you want to do is pro forma any piece of equipment, and that process includes all of those factors,” Dr. Whitman says. “It’s not that one factor is more important than any other; you take the whole and say, ‘OK, this is a really expensive piece of equipment, but the reimbursement is really good, and, in 2 years, we’ll have it paid off, and then it will be a profit-making machine.’ There are times when you have to look at a long payout for something that may make surgery easier and/or better for patients.”
Are Buying Groups for You?
A recent survey conducted by Ethis Communications for PentaVision Media, publishers of The Ophthalmic ASC, revealed that 43% of ASCs report belonging to a buying group. Indeed, depending on your ASC’s needs and circumstances, joining a buying group to purchase everything from diagnostic equipment to instruments and supplies may or may not be a good idea. So says Michael Jones, MD, who has owned and operated multiple ophthalmic ASCs during his career.
For individual physicians or owners, the biggest benefit of a buying group is not having to negotiate prices for equipment and supplies, says Dr. Jones.
“Prices are already baked in because the buying group itself has already negotiated these prices, and they’re usually very, very good prices,” Dr. Jones says.
The downside, meanwhile, is mainly the loss of flexibility.
“Prices are already set, but my personal experience with companies is that they’re often willing to negotiate beyond what they would offer to a large buying group,” Dr. Jones says. “If they see you as a strategic player or your city as a strategic market where they want to place their product, they may be willing to go lower than if you’re part of a buying group.”
Acquiring equipment also can take somewhat longer as part of a buying group, while owners who go it alone usually move more quickly.
“If you’re OK with getting group pricing, it’s not a bad idea,” Dr. Jones says. “But if you enjoy customizing your deals and you’re willing to put the work in, staying independent gives you more control.”
Hurley agrees that it’s not all about the money. “We want to use technology that is going to improve outcomes, but we understand that we sometimes have to increase volume to help offset costs.”
Once a technology has been selected, it’s time to explore how to maximize utilization to pay for that new technology, notes Dr. Jones.
“With these companies and our tax laws, you can usually get good deals. If I buy a femtosecond laser, I’m not going to write a check for $500,000. There are payment plans, and you can talk with your accountant about where you can depreciate the initial cost. So, for the first couple of years, the equipment is probably not costing much of anything.”
The key, he says, is identifying how to maximize utilization for a return on your investment, and that involves educating surgery center and clinical staff, as well as patients, about the benefits of the technology.
“If you’re not educating your staff on the benefits of the new technology you brought in, they’re not going to be telling patients about it, and patients aren’t going to be asking for it,” says Dr. Jones. “You have to educate your staff in the surgery center and in the practice, so they can spread the word to patients.”
Always Put Patients First
Ultimately, evaluating and purchasing new technology for your ASC is an investment in your practice, in yourself, and in your patients.
“It shouldn’t be intimidating,” says Dr. Jones. “It’s fun to evaluate new technology. This is how our profession advances, so it shouldn’t be a scary thing. But, always think about the long-term ramifications, and, if you always put patient outcomes first, everything else takes care of itself.” ■
7 Tips for Better Buying
Acquiring new technology can be one of the most complicated and stressful jobs in any ASC. Here are seven tips to help make it easier:
- Trust a process. Devise and implement a formal process to govern major acquisitions of equipment, and be sure it includes a “buying committee” to oversee this process. “You need something in place ahead of time so you can be a rapid responder when new equipment comes out,” says Dr. Jones. “You don’t want decisions to require 50 meetings.”
- Take a fiscal fitness test. From the start, understanding the financial aspects of your prospective purchase and its impact on your practice is vital. “You need your surgery center director, director of nursing, or other administrator to help evaluate the cost per case and how many cases you’ll need to make it work,” says Dr. Whitman. “At the end of the day, make sure you’re being fiscally responsible.”
- Shop around. Brand loyalty is good, to a point. “It’s very easy to say, ‘ABC Corp. has always been the biggest and best company for this product. We’re not going to try anything else,’” Dr. Whitman says. “But you risk missing the boat on some good, new technologies if you always stay with one company. And, you could get the worst pricing possible because there’s no competition.”
- Look at the whole package. Cost considerations don’t stop with initial acquisition. For example, with phacoemulsification technology, gowns, gloves, and other items may or may not be included as part of the deal. “So, when we evaluate costs, we have to look at all those things to determine the true, final cost of that piece of equipment,” Dr. Whitman says. “Package pricing can really help, and it’s definitely worth considering.”
- Go to trial. Don’t buy any major equipment, such as a femtosecond laser, without trying it out first, and for as long as possible. Some companies will leave equipment with your ASC for just a day, while others will leave it for several weeks so every surgeon gets a chance to use it, Dr. Jones says. “Try to convince them to leave it there long enough so you can get a good, real taste for it to decide if it’s going to work in your center,” he says.
- Pay a visit. Visit an ASC that’s already using the equipment you’re considering. “If you’re just giving it a trial run, you’ll still be coming across bugs in the system, and you may think — mistakenly — that it’s going to slow your throughput. But, seeing it in an ASC that has already worked out the kinks, you can see the equipment functioning at its highest capacity,” Dr. Jones says.
- Don’t “marry for money.” Adding equipment solely for the money it brings in rather than the outcomes it produces does not work long term. “Buying technology that’s not better for outcomes but is better for the center financially never works,” says Dr. Jones. “Always put patient outcomes first.”