By Stephen W. Earnhart

We just opened our newest ambulatory surgery center (ASC) in Texas this week. We think it is our 206th, but we could be off on that number. While it is an ASC, there is some useful information for our hospital readers here. Please read on!
The center is a six-OR single-specialty center with an anticipated 8,000 cases in year one. We certainly will exceed that number in year two, as the total count for the physician investors current volume exceeds 15,000 cases in four area hospitals and two other surgery centers. There is no hospital investor. They were not invited by the docs.
While opening a new surgery center is not a big deal anymore, there are issues around this center that intrigued me. These issues offer lessons to other surgery centers, as well as surgeon offices and hospital outpatient departments, about how to achieve cost savings. Let’s start with obvious:

• Equipment.
We will have spent a little over $2 million on equipment and instrumentation at this site. We came in under budget by about $200,000 because the surgeons (seven different practices) all agreed to a common set of major equipment systems and agreed to change their instrumentation needs, which is not an easy accomplishment, as many of you know. There was a lot of compromise, and a lot of vendors were upset, but the result was a huge savings for the ASC.
I always wonder, in these terrible economic days, why hospitals don’t do the same. The money they could save by being firm on the systems they purchase and maintain would be enormous. Granted they would lose some surgeons that didn’t get what they wanted, but they probably would lose them anyway if that is the way they function.

• Staffing.
We did not want to anger the local hospitals and other surgery centers (they might read this!) where the surgeons operate by cherry picking their staffs, but we had several applicants from those institutions anyway. Most of the applicants were from the hospitals.
Since Earnhart & Associates is managing this center for a long time, we were as picky as the surgeons about whom we hired. We wanted hungry staff! Of the 25 FTE positions we hired, only two or three came from the hospitals. The majority of the staff are new RNs and a few experienced scrub techs.
Most of the hospital staff members that applied did not want to be cross-trained (a requirement), wanted a full retirement plan year one (come on — it is a new center!), wanted the current salary they had at the hospitals where they had been for 15 years plus (and a bump even to that!), and they wanted facility-paid health insurance for entire family, not just the employee-paid. In other words, they wanted status quo and no risk. The surgeons gave us a clear understanding that they would much rather train new, energetic staff who were interested in growing their careers rather than staff that were at the end of their careers and had no interest in making the new center a success.
This information is a lesson to some: Often we have to take a chance when we are making change in employers. The new staff at the surgery center has no call, no emergency cases, no weekends, generally healthy patients, and no big hospital hassle. Often tradeoffs must occur!

• Physical building.
Due to size of the new center, we had to buy a building, tear it down, and start from scratch. Again, in these economically interesting times, you would think that cities would embrace a new tax source. Oh, no. They put up as many roadblocks as possible. Again, some people just do not get it. In spite of the city and the length of time it took to get permits, we still came in under budget on the building and opened two weeks early.
We were able to do our first case 12 days after our certificate of occupancy, which meant we beat our old record of 18 days. Thus, the city will get its revenue regardless.

• Vendors.
I know that I am usually hard on vendors in my column, but I have to hand it to these ladies and gentlemen: They really helped us obtain the best pricing, and they gave us outstanding service! I asked one of the reps why he was going out of his way to help us stay in our budget, and he told me it was because we were trying to be budget-conscious! That was cool.

• First patients.
Anesthesia cancelled our very first case. Medically necessary. A bummer for some, but I was delighted! We were setting the marker that patient safety was a huge issue for us.
Our second patient — well, really our first real patient — was 45 minutes late. Of course. That was even with the two pre-op calls and directions. He finally showed up, and his “responsible adult” took off as soon as the patient walked in the door. That was fun getting his ride home to come back to the center. The patient did, however, get into the operating room 4 minutes early (yes – I track that), had general anesthesia, and was discharged an hour later. So in spite of everything, the system still works.

Once again it proved to me why I love my job so much! Nice job by everyone.

By Stephen W. Earnhart

CMS is now proposing to implement a quality reporting system under which data collection would begin in 2012.  For the first two years, ASCs would not be financially penalized for failure to report quality information.  However, beginning in 2014, CMS would begin reducing Medicare payments to ASCs that fail to report data on specified quality measures.

CMS proposes eight measures for the initial reporting period:

• Patient Burn
• Patient Fall in the ASC
• Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant
• Hospital Transfer/Admission
• Prophylactic IV Antibiotic Timing
• Appropriate Surgical Site Hair Removal
• Selection of Prophylactic Antibiotic (first or second generation cephalosporin)
• Surgical Site Infection Rate

By: Stephen W. Earnhart

The most frequent request we handle is developing a surgery center.  The mistake that may people make is hiring a surgery center company to do this for them.  Unless you want a company to own part of your surgery center and manage it forever, your best option is to hire a consultant to do this for you.  Unlike a surgery center company, a consultant such as Earnhart & Associates, will get the job done for you quickly because most ASC development projects on a flat fee, and will leave when you tell them to go.  With a surgery center company that owns part of your surgery center, you are typically locked into a contract with them that can last for decades. This is either for a physician group, a hospital, or both.  Developing a surgery center is a long and labor intensive process requiring over 1,100 individual forms and 1,700 man-hours of effort!  The typical development process can take between four to eighteen months to completion and involves activities as varied as creating legal partnerships, hiring staff  and  marketing the new facility. By hiring a surgery center consultant – not an owner – you stay with the same person that you start with, not rotating staff members that can quickly lose sight of your goal.

There is no magic about the development of a surgery center. But it does require a strong ability to identify, analyze and solve problems, meticulous attention to detail and a through understanding of all aspects of the legal, technical and management areas of building a facility. There are virtually hundreds of steps involved and many issues that will arise along the way. Can you do it yourself? Certainly! The question is, how much time can you afford to devote to a project that will consume your energy, stretch your administrative capabilities and still continue to manage your healthcare business?

When we say we provide a “turnkey project,” we mean just that. After a detailed feasibility study we manage every step of the project beginning with creating a legal structure and ensuring financing.  We take care of virtually every detail from recommending architectural firms to medical staff by-laws. At the end of the project, you have a Medicare Certified ASC that is designed to be cost efficient, properly staffed, and meets the needs of your community and users.

Even with all that in a new facility with all new staff – we actually got the patient into the operating room 4 minutes early!  The patient was discharged after 40 minutes in PACU after his general anesthesia.

Really proud of the staff!  Six more patients to go today and 35 more to go this week.  Next week we get serious with cases.

Thought you would want to know.

After a talk I gave last month, someone came up to me after the meeting and asked me this question, “After all the years you have been doing this [surgical consulting], what are some of the things you have learned?”
I sort of blew off the question with a short quip, but the more I thought about the question, the more I wondered: What have I learned? I enjoy writing, fiction mostly, but I can and do plan on writing a book about my experiences in this industry. The following will certainly be within the pages:
•    I learn something from everyone I meet. It could be a surgical tech, the instrument processor, or the CEO. Everyone has a story, and if you listen, you can hear it.
•    If you build it, they will come. Oh, no they won’t!
•    The rudest people are the loneliest people.
•    Surgeon’s perceptions are reality. Don’t confuse them with facts. Demonstrate with actions. • Ninety percent of the meetings I’ve ever attended were a waste of time.
•    Vomiting just comes with our industry.
•    A screaming child in PACU is mostly scared and needing a hug rather than in pain and needing a shot.
•    A pre-op patient that says they are going to die during surgery should not have surgery that day.
•    If I had to be stranded on an island — I would want an OR nurse with me.
•    The louder the people talk, it seems like the less they know, but don’t want you to know it.
•    Breaks in surgical techniques happen more than we realize. We can thank our immune system for keeping us out of trouble.
•    I use to think that a good “boss” could not be a good “friend” to the people he or she worked with. I’ve changed my mind on that.
•    Every “rep” works off of commission. I have bought many a surgical product not fully understanding that!
•    It often costs more to store the equipment after the orthopedics trade shows then the equipment itself cost.
•    Most administrators are afraid of the OR staff. Way to go!
•    It just plain is not true that the older the building, the greater the character! It is actually the older the building, the more odors it has.
•    Old patients are just as scared as young patients in pre-op.
•    Some staff members are content where they are in the scheme of things and do not want added responsibilities.
•    Lastly: Sometimes things are just meant to be.
I know that many centers are having a slowdown in activity and reimbursement from Medicare and Medicare is getting tougher and tougher. I do see turnaround but not in the near future. We all need to dig in and ride it out, because it will get better.
I talk with a lot with people in the industry that think they understand what is going on — (I don’t think they really do!) but they all feel that all of us are in the right place at the right time. Hang in there.

By: Stephen W. Earnhart

The kids are back in school (Thank GOD!), the heat is starting to break, the floods are receding, and the fires are burning out.

It was an interesting summer. I spoke at several conferences, and I have to say that the Gulf States ASC Conference & Tradeshow in Biloxi, MS, was one of the best conferences I have had the pleasure of speaking at. The Ambulatory Surgery Center Association conference in Orlando was great too.

These conferences left me with a question: How many of your centers and hospitals are paying someone or some company a management fee? How much? Are you getting ripped off? Well, according to the results of a survey by HealthCare Appraisers in Delray Beach, FL, 56% of centers are paying between 3% and 6% of the net revenue of the center for the pleasure of telling you what to do. For hospitals, the average is about $25,000 per month, not including personnel. Are you in that range? Are you angry? (For information on how to access that report, see note at end of the column.)

A. Here are some questions for you from that survey. See how many you get right.

1. What, referring to the same survey, is the least desirable specialty in surgery centers (and I am adding hospital outpatient departments as well)?
2. What is the most desirable specialty?
3. What percent of surgery center companies were looking to purchase surgery centers last year?

B. Here are some of my questions based upon responses from the conferences I spoke at over the summer (not quite as sophisticated):

1. What I hate most about working in surgery is ________?
2. What I like most is _______?
3. If I could change one thing it would be _________?
4. The most exciting people in healthcare are _________?
5. The most entertaining surgeons are ___________?

OK, that was fun. However, on a serious note, most of us are concerned about the future of our industry. But the reality is that we need to focus on what we can do at our own workplace and not worry about the global issues. I will recommend that all of you Google the following words and understand their meaning. These words are going to impact your lives over the next 10 years to a much greater degree than ever. You need to understand them.

* cash flow;
* Return on Investment (ROI);
* Stark law;
* Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA);
* breakeven;
* distributions;
* economic credentialing;
* passive investor;
* one-third one-third regulation;
* under arrangement.

Most of you know this stuff, but it still is a good exercise.

C. Last question for the ambulatory surgery center group: “Who is the most important person in your facility?”

1. Surgeon?
2. Investor surgeon?
3. Anesthesia (Sorry. Even I had to laugh at that!)
4. Vendor
5. Staff

D. Last question for hospital staff: “How many meetings do you attend per week?”

1. 1-3
2. 4-7
3. 8-11
4. 12-18
5. More than 20

Answers for questions from group A:

1. Plastic surgery
2. Orthopedics
3. 82%

Answers for questions from group B:

1. The early start time
2. The job security
3. A better retirement plan
4. Nurses
5. Orthopedic surgeons

Answer for questions from group C:

1. The investor surgeon because they bring the patients to the center while being concerned about the running of the center.

Answers for questions from group D:

1. 12-18 per week. (Oh, come on people!) 

By: Stephen W. Earnhart

This has been a grand month so far. I had the pleasure of speaking at the Ambulatory Surgery Center Association (ASCA) meeting in Orlando in May and The Gulf States ASC Conference in Biloxi in June. I reacquainted with old friends and made new ones, and I gathered many months of ideas for my column.

The one thing that impressed me more than anything at these meetings was that as an industry, we are marching forward and are not daunted by the economic woes around us. Of course, being in healthcare and not real estate helps, but still, I gathered an upbeat mood from surgery center owners, companies, hospital department heads, surgeons, techs, and vendors. It was refreshing to witness. We should all feel good about our career choice! Here is my take on what I observed:

1. Surgeons are investing in their future.Granted, some physicians are becoming employees of large healthcare systems, but I see that as positive as not everyone is an entrepreneur and there is comfort in the pack for those individuals. But this trend helps to clear the vision for others and does carve out a larger niche for surgeons who wish to pursue a business venture (i.e. their own surgery center) combined with professional satisfaction and growth.

2. More and more hospitals are partnering with surgeons. Again, some are hiring them as employees, but mostly they are partnering in surgery center projects. This is heartening as it not only brings more business to the industry, but it also validates it. Not that we need it, of course.

3. A lot of people and companies are looking to buy surgery centers. According to Healthcare Appraisers, 52% of the health care companies plan to buy surgery centers this year. Could you be one of them? Better smile at strangers walking through your center. You never know!

4. The “giveaways” (the little trinkets on their tables) at the vendor’s booths are cheap and paltry. COME ON! We are professionals spending real money here. Cough up the good stuff if you want us to stop at your table!

5. Seemingly, as a group, we are getting older. Are there going to be enough new nurses to replace us in the next 10 years? I don’t think so.

6. There were many private meetings going on all around me involving business-type people (they wore suits) with surgeons (they wore scrubs, so they would be easy to spot in their casual indifference) discussing all manner of things that could only be good for all of us.

7. It appears, according to all the vendors present, that many of us are outsourcing services from our facilities. And, based upon all the equipment vendors, we are breaking a lot of our stuff!

All in all, it was great. I know that many of you that read this don’t always have the opportunity to go to these meetings. It’s such a shame and a missed opportunity for you. You need to let your department head or supervisor know your desire to attend. You will come away like I did: rejuvenated, inspired, and networked!

You also need to get involved in your organization, whatever it might be, because it does make a difference. For example, almost every state has a hospital and surgery center association. Google yours to find the contact info. Surgery centers also can go to http://ascassociation.org/about/state to find their state associations.

I received my first real break in this industry by attending a conference years ago. I was so inspired by the speakers that I signed up to speak at the following year’s conference (completely forgetting about my fear of public speaking at the time), and that was the start of what I do now. Whether you work in a surgery center, a hospital outpatient department, or a surgeon’s office, the networking and experience is well worth your time!

By: Stephen W. Earnhart

Oh my. This is such a litigious time we live in. People are hurling themselves in front of moving buses, throwing themselves down steps, and falling in food stores, all in an effort to cash in on unearned and undeserved booty from insurance companies in frivolous lawsuits. Fortunately many of these antics are caught on video cameras that businesses set up for just such shenanigans, but still far too many dishonest people collect their retirement early because it is often cheaper to pay them off than to fight them.

The health profession has long been the target of lawsuits — some perhaps deserved, some not. But as an industry, we spend billions of dollars in blatantly unnecessary tests, procedures, and protocol to cover ourselves.

Look at the TV ads on new drugs: “Suicidal thoughts.” “Changes in vision or hearing.” “Erections lasting longer than 4 hours?” All of this information is intended to keep us aware of remote side effects so we don’t sue them should they occur. While I would never want to take a drug that could cause my “tongue to swell” and my “throat to close,” sometimes you have no choice. The billions of dollars spent to keep these companies out of court does work, but not always I would guess, based upon the attorney ads for “bad drugs” on TV. You can do only so much to protect yourself, but protect yourself you must!

How can we, in our own little microcosm, avoid the steely stare of some prosecutor in court? Quite a bit actually.

Bear in mind, I am not an attorney. I don’t want to get sued here by giving advice! Consider for example that something happened to me in your operating room that didn’t necessarily cause me to lose an arm or other valuable appendage, but just maybe made me uncomfortable or inconvenienced me. If I liked you and knew it was just an accident, I could let it go. If I got a Bovie burn on my thigh or an infection and I thought you we sincerely sorry and empathic to my situation, and you made it right by not charging me for scar revision or meds, I could let it go. But if I didn’t like you, or I thought you were rude or unsympathetic, or you charged me for other services needed to correct what was done wrong, look out! I’m a comin’ for you.

Thus lesson number one is that if you see something is wrong or some untoward event happened, show a truly sympathetic and caring manner. Patients and visitors can spot sincerity, so let it flow naturally. Avoid an “attitude!” Rarely is there anything more gratifying then nailing someone that cops an attitude. Saying you are sorry is not admitting guilt. It can just mean that you are sorry.

Lesson number two is obvious: Follow procedure! While you may be caught in a widely cast net by some attorney in a malpractice suit, if you followed procedures established by your hospital or surgery center, chances are you will be OK. It is only when we act outside of those procedures that we get in trouble.

A good example would be allowing a staff member to drive a patient home after surgery, and they get into an accident. I don’t know of any facility that would allow that to occur, but I know it does. You would be on your own for that infraction, along with your employer! Other examples could be looking the other way when you know a staff member is incapacitated in some way but still doing patient care. You are responsible for reporting that situation, and if you don’t, you are just as guilty in a jury’s eyes as the person who did the misdeed.

Lesson three. Never, ever, ever, ever try to cover up something! We all make mistakes, and we are responsible for them, but they are still just mistakes. Once you try to cover up something — be it on the chart, the med dose, or whatever — you have crossed the line from making a mistake to conducting an illegal act that could have disastrous results for you and your employer. A true professional will never ask you to “cover up” something that happens in the workplace. If they do, you need to refuse and report them to their boss.

By: Stephen W. Earnhart

Question: Our surgeon group has been approached by the local hospital to buy an interest in our surgery center. We (the nursing staff) are fearful of this for our jobs and also dealing again with the “hospital culture” that we came to this center to get away from. We found one of your articles that you do these types of mergers, and we want to know what we can expect — from the nurses point!

Answer: First and foremost, you should not see this as a threat to your jobs. That is always the no. 1 concern of employees at the acquired facility: that they are going away and be out of a job. The reality is that usually in these situations, part of the deal is that the current staff remains unchanged. Some contracts even have it in writing. Most hospitals that purchase surgery centers usually know that that is a “culture” that they typically cannot match and are usually content to stay out of the way when it comes to management and operations. Good way to check is to ask the surgeons that own it and see what they say. If they are vague and don’t look you in the eye, you might want to polish up that resume!

Question: What is going to happen to ambulatory surgery centers (ASCs) when (and if) healthcare reform ever fires up?

Answer: Likely nothing. It should be business as usual. Specialty hospitals might have some challenges, but by and large I have seen nothing that will adversely affect ASCs. Some leaders are projecting that because more patients will be insured, more will undergo elective surgery.

Question: Our hospital is bringing in an outside consulting group to manage our surgical department. Have you ever heard of this? To us it seems like a pretty serious move. Thoughts?

Answer: It is not that uncommon actually. Often there is a specific reason they are bringing in outside people: adding new procedures or specialties, assessing staff and leadership, anticipating new or rapid growth within the department, and the like. Usually the staff has nothing to worry about and can learn from having an outside group come in.

Question: Social media is running rampant, and I think it could help our hospital surgical department communicate with the community and the surgeons. My supervision disagrees and has pooh-poohed the idea. What do you think?

Answer: I think it is a great idea! We just did it as a company and have had great results. Bear in mind patient privacy issues, and see if you cannot get him to change his mind. Show him this article! (Editor’s note: For more information on using social media, see these Same-Day Surgery stories: “Are you Twittering, getting friends on Facebook, and YouTube? – Social media embraced as marketing, educational, and recruitment tools,” November 2009, p. 105, and “Social sites continue posing risk problems,” November 2010, p. 126.)

Question: We just opened a new surgery center, and we (the nurses) think we need to open up the third operating room that is just shelled in right now because the owners don’t want to pay to open it up. They say that we should be doing more cases in the other two rooms before we spend that money. (They are very cheap.) Isn’t there some regulation that requires you to only do so many cases in a room per day?

Answer: Cheap though they might be, you should have a quantifiable reason to open up a shelled operating room. The rule of thumb that I go by is that you should be utilizing about 76% of your available time before you take that next step. Once you go above that utilization benchmark, you lose the ability to “flip-flop” cases into other rooms.

Question: Our orthopedic surgeon is going to open up an “office-based surgery center” and is trying to get some of the staff, me included, to join him at the new center. He says it is much cheaper to build than a fully licensed and state-certified surgery center and that he will share that savings with the staff. How good of an idea is this?

Answer: Well, probably not too good. Maybe your surgeon does not know that rarely can an office-based center receive reimbursement from health care providers for the facility fee/charge. There are exceptions, but not many. Because these centers are not state licensed, they are not eligible for Medicare certification and therefore not eligible to enter into those contracts. These are good for plastic surgery centers and some others, but not for a typical orthopedic practice. You might want to ask him about that before you and others jump ship. It will make you look cool when he realizes his potential error, but he probably will hate your pointing it out to him.

By: Stephen W. Earnhart

If your block booking of procedures is working for you — great! You are one of the few. Pat yourself on the back, and go have lunch. If, however, you are among the majority of us, read on.

It makes no difference if you are hospital-based or freestanding; an effective block schedule is difficult to manage — really difficult. Since I get paid to deal with issues like this all the time, I am going to take some editorial license here and speak from a position of authority.

First, block scheduling is an active, dynamic process. Unlike what many might believe, you do not set it up and forget it. It is a fluid process that demands attention and massaging — always massaging. By the end of this column, most of you will change the way you block schedule your cases.

Let’s start with the basics. Block scheduling is nothing more than a management tool to accommodate as many surgeons as possible. It is nothing more (or less). A poorly designed block schedule (which accounts for 90% of the problems we see) causes far more problems than it solves, so pay attention to details. A well-designed block should look something like this.

It is not complicated, but it needs to be comprehensive. Below is a bulleted list of the common mistakes we find. I know that they don’t always apply, and there always are exceptions. However, most of the time they do apply to you.

• Avoid full block days. They are rarely fully utilized, and you are better served breaking them up.

• Allow your surgeons office to post into your system directly from their office and bypass calling you. What?! Of course you can! Call your IT/IS people and tell them to do it. Don’t give them an option. What? Then get rid of them, and get someone who can! Good heavens. This is not rocket science.

• Do not be the heavy and establish the priority of who can pick their block first. This is especially an issue if you are new or just setting up a block schedule.

If the surgeons don’t play well together, then have the medical executive board, the physician advisory board, or the executive committee establish the pecking order. Do not get caught in that crossfire. If all else fails, go by seniority, age, or rock /paper /scissor. Bribes apparently work well too.

• Unutilized block times should be released 24 hours (or 36, 48, or 72 hours) beforehand so others can capture those slots.

• If an underutilized block occurs greater than three times in a time period, then the block needs to be reduced in size. I suggest a one-month time period. Others use a quarter, but I think that is too long.

• If the number of operating rooms allow, always try to have a “free, unblocked room” for first-come, first-served cases.

• Allow for trading of block time among the surgeons, if you have the equipment available.

• You might want to have the same grid as on p. 49 for your treatment rooms as well. Some surgeons like to block their local cases separate.

You need to add your own rules and expand the above. Just remember that this is also a management tool that you should use for staffing, equipment, and budget. Use it wisely. Happiness is a full block!