Strategic Analysis with current research! Outpatient Surgical Center, Inc.
Today it is estimated that over 2, surgery centers are in operation throughout the United States. The health care industry is also experiencing growth and rapid changes effecting the delivery of care.
Change in reimbursement in health care is effecting all providers which, in turn, requires ambulatory surgery centers to operate more efficiently than ever before. This article submits that with careful and competent planning prior to actual development and construction, the risks inherent in developing a de-novo facility can be substantially minimized, greater efficiencies can be achieved and the goals of the principals developing the facility can be met and exceeded.
Background In the course of our practice, we see common mistakes made in the surgery center pre-development process which negatively effect the viability and purpose of an ambulatory surgery center throughout its life span.
These mistakes are exceptionally difficult to undo once the center is in operation. However, regardless of whether it is a hospital or a physician, the mistakes can be easily avoided through thorough research and the engagement of competent professionals to assist the principals in meeting their goals.
Thus, the following are four critical steps which, performed and executed correctly prior to development, will augment the viability of an ambulatory surgery center project. Development of a Comprehensive Business Plan We often use the analogy of building a house when meeting with new clients.
Before you build, you need to take soil samples and construct a proper foundation. The development of a business plan is the first step toward the successful development of any business, including an ambulatory surgery center. Thus, the business plan serves as the foundation for the project.
The business plan should include both micro and macro factors which will give indication as to the viability and most successful manner to structure the venture. Some macro-economic and macro-operational issues include whether there is an overabundance of competing facilities hospitals and surgery centers in the market, the ability for the venture to gain and retain key third party payor contracts due to pre-existing relationships in the market, the history of the development of independent for profit ventures in the market, and historic reimbursement in the market.
A synopsis of some micro factors include meeting with physicians and gathering data regarding the number of cases and types of cases that will be performed at the facility, political factors singular to the market, the mix or type of cases expected to be performed at the facility, the desires of the physicians regarding the operation and day to day management of the facility, the practice patterns and supply cost patterns for the physicians, and the financial resources of the owners of the facility.
The business plan should include detailed financial data including a minimum of three 3 pro forma financial forecasts based on volume of cases performed. Included should be a projected income statement, sources and uses of funds, balance sheet, supply cost per case assumption, revenue per case assumption, staffing pattern assumption, expected payor mix as a percentage of volume, assumption regarding equipment requirements, and a debt to equity assumption.
The data gathered described above should be used to make these assumptions. A key concern is overbuilding based on over optimistic projection of cases. Similarly, in almost every instance, it is important to be able to expand the size and scope of the project based on changing needs.
The business plan should also set forth a legal and operational structure for the venture. After conferring with the client and their legal counsel see belowa legal entity to operate the venture limited liability company, limited partnership, limited liability partnership should be selected which will meet the needs of the principals participating in the venture.
See Joint Ownership below. Lastly, if the project will be owned by more than one party, a capitalization structure must be set forth which prices the units of membership interest in correlation with the projected equity raised and debt incurred.
In summary, the development of the business plan has a threefold purpose. Second, the business plan should also be used to secure financing and other capital required for the project since nearly all surgery center development projects utilize debt financing.
Joint Ownership If there is one factor which contributes the most to the long term success of an ambulatory surgery center, it is the successful consummation of joint ownership arrangements with strategic partners prior to the development of an ambulatory surgery center. While there are many, and will continue to be many successful surgery centers owned solely by hospitals and physicians, the changing dynamics of the health care industry lends itself to provider alignment.
One physician owning too much of the surgery center which creates professional jealousy. A hospital owning too much of the surgery center which creates resentment by physicians because they feel that they lose control and direction over patient care which is a common reason for the establishment of a surgery center by physicians.
Control vested in the hands of too few, or one entity. The need for a mutually beneficial arrangement is of critical importance. There are numerous tax, legal and administrative issues which must be addressed during the course of negotiations.
Key factors include the balance of powers, rights, duties, and obligations as well as the division of equity in the project. These issues can be successfully addressed with competent advisors with experience in surgery center joint ventures and principals willing to make the effort to correctly structure a venture to augment its long term viability.Ambulatory Surgery Center Association (formerly called FASA) National Association of Health Data Organizations; NCHS.
National Survey of Ambulatory Surgery Sample Design.
Recommend on Facebook Tweet Share Of the hospitals, 35 were found to be out-of-scope (ineligible) because they went out of business or otherwise failed to .
1 Ambulatory Surgery Center Business Planning and Organization Formation Christian Ellison SVP, Corporate Development Health Inventures August 15, Comprehensive Business Plan Development Ensuring the thorough progression of a business plan is the first step in the successful development of all types of establishments, including an .
Neither indirect nor the direct competitions, Xyz, Inc and John Doe & Associates, offer ambulatory surgery center 24/7 customer service by phone and email Setting up or forming a limited liability company (LLC) online is simple, easy and affordable, inexpensive process for under $60 plus state fees.
Part 1. 1. Write a CLC Business Plan on Ambulatory Surgery Center that include. A. Description of service.
B. Business and industry profile. 2. The Collaborative Learning Community (CLC) Business Plan needs to be of professional quality, demonstrating a high level of thought, research, and writing skill.
Ensuring the thorough progression of a business plan is the first step in the successful development of all types of establishments, including an ambulatory surgery center. The business plan, therefore, is the foundation for such a project.