Physicians are experts at patient care, but their medical training doesn’t include the financial aspects of running a profitable clinic. Even with excellent outcomes and above average patient satisfaction, the bottom line can be flat or even follow a discouraging downward trend.
The eight physician owners at Atlantic Gastro Surgicenter, LLC, better known as ACCESS, felt that their ASC could be doing better and took steps to make that happen.
“The medical-economic environment was changing, and we thought positioning ourselves with a strong partner would enable us to better grow the center,” says John Santoro, DO, FACG, AGAF, a gastroenterologist at ACCESS, located in Egg Harbor Township, New Jersey.
Santoro and his partners did their research before choosing PE GI Solutions. “We entertained a number of other partners, but PE was the clear winner. While others were just in acquisition mode, PE looked at us individually and had a clear vision of what they could do going forward,” he says.
In November of 2016, ACCESS and PE GI Solutions finalized their corporate partnership. The outcome has been outstanding, with updated equipment, better contracts, an improved organizational framework, and a brighter bottom line-all within the first year of business.
Pro Tip: A business that has been getting by for many years is doing just that-getting by. Instead, your goal should be to excel.
A Well-Established ASC
ACCESS was founded in 1996 as a physician-owned and operated GI ASC. They later branched out to include additional specialties such as pain management, orthopedics, podiatry, plastic surgery, infusion services and general surgery. With two procedure rooms and two ORs, they perform over 12,500 procedures a year.
Playing Catch Up
Over the years, though, capital improvement updates have lagged. Their equipment was well maintained, but some items, such as their scopes were beginning to age.
“Their focus had been on delivering terrific patient care, not always in investing in capital equipment,” says Lara Jordan, VP Operations at PE GI Solutions. “Like many centers, they’d just make things work for another year.”
Payer contracts were also an issue since some hadn’t been renegotiated in many years. According to Jordan, that’s typical for independent centers where owners may not be focused on the process. “When you don’t go to the payers and say, ‘We want an increase,’ they’re not going to come to you and offer one,” she says.
Equipment service contacts also needed to be renegotiated. The group hadn’t looked at budgeting or forecasting that could help them excel financially.
Payroll at ACCESS was not well-aligned with productivity or patient volume. Without tracking the center’s financial situation, it was hard to find money for staff raises.
“We’d have evaluations and tell people they were doing a great job, but we couldn’t offer them additional pay,” says Maria Mesiano, former Administrator at ACCESS.
Without access to the knowledge or training, Mesiano wasn’t able to propose changes to staff scheduling, budgeting or other operational issues. Also, the facility did not have a human resources department to consult. As a result, these challenges persisted for many years.
Starting Off Right
“The transition has been smooth overall, and getting smoother every minute. I know that Lara manages multiple centers, but it feels like we always have her personal attention.” – John Santoro, DO, FACG, AGAF
Even before the corporate partnership was finalized, PE GI Solutions representatives were on the phone or onsite talking with staff, reviewing agreements and contracts and otherwise assessing the center. After the acquisition was completed, Jordan spent time getting to know the physician partners, management and staff. Establishing these relationships helped her understand the culture of ACCESS and start prioritizing and implementing needed changes.
PE GI Solutions surveyed the equipment and replaced the cardiac monitors along with the washer/sterilizer. They also replaced the GI department’s obsolete Olympus EMR system with ProVation and added new computers at all patient bedsides. They are in the process of replacing all the scopes, and have budgeted for a new C-Arm as well as scope reprocessing machines in 2018. “There’s a standard of care the physicians and staff aspire to,” says Jordan. “When you’re telling the world what you can do, you want state-of-the-art equipment.”
Jordan and her team looked at all of ACCESS’s contracts and agreements with an eye toward saving money. PE GI Solutions has 58 centers, which translates into significant negotiating power. “Within the first few months we were able to save them close to $65,000 a year just on service agreements,” she says. PE’s experience and nationwide range also helped with payer contracts. With partnerships in most states, they have a good handle on who to talk to and how to make the best deal. That took some extra effort with ACCESS, since it’s a multi-specialty center. “We spent a tremendous amount of time looking at their procedures, looking at different insurance groups and negotiating better contracts,” Jordan says. That involved separate negotiations for the various specialty areas as well as requesting additional coverage.
For example, they made sure procedures such as implanting devices for pain management were covered.
A More Productive and Happier Staff
While the staff at ACCESS had high hopes for the future with PE, they were initially a little apprehensive. “Some of us had been through hospital mergers that involved downsizing, and they were worried about losing their jobs,” says Mesiano. “But that didn’t happen with PE.” Instead, PE conducted a meeting to listen to employees’ concerns and answer questions—a process that reassured the staff. In addition, Jordan worked with Mesiano to improve her skills at analyzing service contracts, interpreting financial information and managing the payroll to make sure staffing is appropriate. “If I had to grade how things were, I’d give some processes a ‘C,’ Mesiano says. “With PE’s guidance, we’ve come up to an ‘A.’ I’ve grown a lot as an administrator.” With more realistic staff schedules, along with better pricing on contracts and other changes, ACCESS was ready to offer raises for the first time in many years.
A Fresh Coat of Paint
With the infrastructure of ACCESS updated, it was time to make the face of the center reflect the changes. Old wallpaper was removed and all areas were repainted. Curtains and carpet were replaced, and the front lobby got new furniture. “A fresh coat of paint goes a long way,” Jordan says. “Making the place look more inviting helps patients feel more confident and comfortable.”
Pro Tip: Older equipment may function just as well as when it was new. But updating to new gives you the advanced capabilities that have been developed over time.
Long Term Outlook: PE GI Solutions negotiating skills and economy of scale will continue to benefit ACCESS, providing the best possible deals with contracts and agreements. Updating the equipment is also an ongoing process.
In addition, the PE GI SOLUTIONS / ACCESS partnership will include these ongoing benefits:
- A knowledgeable human resources department. ACCESS operated without one before the acquisition. Now they can turn to HR at PE for help with payroll, benefits, retirement planning, employee relations and more.
- Health insurance choices. PE brought ACCESS employees onto their health plan, which saves them money in their annual premiums and also provides more plan options.
- A dependable process for rewarding employees. The new structure will use evaluations on a regular basis and provide raises for staff who qualify.
- Help with accreditation inspections. Experts at PE GI Solutions consult with ACCESS to ensure they are following state guidelines and are prepared for AAAHC inspections. In the past, Mesiano was on her own with these processes.
- Strategic planning. According to Santoro, among the biggest advantages of partnering with PE are their management and planning skills. “PE’s methods and metrics are very good. When you see all the data assembled, it’s very useful and meaningful. You know not only where you’ve been, but also where you’re going,” he says.
“I’m looking forward to our next inspection because PE has us right on target. They’re here at least once a month, and otherwise they’re just a phone call away.” – Maria Mesiano, RN, CGRN
Pro Tip: Communication is essential to make any partnership work. Look for a corporate partner that is committed to listening and sharing information.
The Bottom Line
Managing an ASC can be a balancing act. While it’s essential to budget for equipment, payroll and other expenses, paying for those components depends on the center remaining profitable. “One of the biggest advantages we brought to them was financial stability. The bottom line is to always deliver the highest quality of care and to do so in a financially viable way, and we’re very mindful of that,” Jordan says. Santoro agrees. “We’re looking forward to an exciting future with a significant phase of growth, and that’s because of PE,” he says. “We didn’t know a lot of the advantages PE would bring until we got into the partnership. It made me wish we had made the move sooner.” – John Santoro, DO, FACG, AGAF
To learn more about a Practice Consolidation click here.