The Leap to Corporate Partnership: A Case Study

PartnerFlat

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 Physicians Endoscopy (PE). "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 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. "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. 

 Staffing Challenges

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. The Leap to Corporate Partnership_JPG

"We'd have evaluations and tell people they were doing a great job, but we couldn't offer them additional pay," says Maria Mesiano, 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. 

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