January 19, 2021 - As I interact with surgeons across the country regarding their involvement in an ambulatory surgery center (ASC), I continue to hear certain questions. Answers to these questions tend to be ‘common sense’ for someone who develops ASCs, but I realized this guidance is not always readily available to surgeons and industry partners.
And without further ado, I welcome you to the inaugural ‘Insights from an ASC Expert’ column:
How many surgeon partners do I need to form a new ASC partnership?
The short answer is ‘it depends.’ No one wants to hear this, but it is much more complicated than one number. The focus should be on the revenue required for a successful ASC partnership. To determine projected revenue, we analyze historical outpatient case types and associated volumes for the interested surgeon partners. A carpal tunnel procedure reimburses very differently than a total knee replacement, but both can be profitable cases to the ASC partnership.
Example A: 4 total joint replacement surgeons each performing 250 outpatient TJA cases annually – results in ~$4,200,000 net profit annually. Each 20% owner would receive ~$840,000 in annual distributions from the ASC partnership.
Example B: 12 Orthopaedic/Spine surgeons performing a total of 2,400 cases annually (200 per surgeon) – results in ~$4,800,000 net profit annually. Each 5% owner would receive ~$240,000 in annual distributions from the ASC partnership.
Both examples represent actual ASC partnerships. Key drivers of the attractive financial results are clinical quality and efficiency. Other factors (which will be detailed in future "Insights" columns) to consider when evaluating a new ASC partnership from a financial perspective:
• Payer mix of the surgeons/practice
• Projected commercial payer rates
• CON state vs. non-CON state
• Time to complete each case and associated staffing costs
• Implant costs