Benefits of Professional Surgery Center Management
Alignment with experienced professionals in the ambulatory surgery (ASC) space increases the probability of success throughout the entire ASC business life cycle. The right ASC management company should be considered a valuable ally and partner which is why the vast majority of successful physician owned ASC projects engage in this relationship.
The more difficult question arises when asking who the local physician group should align with. Choosing the right company to manage an ASC business for physician investors can be a daunting task. Their related offerings can differ tremendously, both from a monetary and non-monetary perspective. As such, company “A” may be a great fit for physician group “A” while also being an inappropriate fit for physician group “B”. Developing an ASC project and managing the project to the fullest potential involves substantial investment and associated risk. Take the time to ask the difficult questions from the outset and you will quickly identify the best fit for your group!
When a surgeon partnership is evaluating the benefits of a potential ASC management company, we feel the following should be taken into consideration.
Engagement with an ASC company generally follows one of three pathways:
- ASC Consulting Services: short term agreement with defined services, duties, and responsibilities. These arrangements tend to be limited in scope and are generally for one year or less.
- ASC Services & Support: these agreements are longer term in nature (5-7 years) and vary in their complexity by off-loading defined administrative burdens from the center (examples include things such as billing & collections, coding, cash posting, accounting support).
- ASC Corporate Partnership: the most common and comprehensive relationship for the reasons mentioned above. These involve some degree of equity / risk sharing amongst the parties and are accompanied by a comprehensive suite of management services that offload the administrative burden of the center to the management company. With investment comes alignment and the mindset that the management company only succeeds if the facility succeeds. That is powerful motivation.
Below are to most common questions we hear from physician groups and Solara Surgical responses.
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What do you feel differentiates you the most from your competitors?
Simply stated our overall experience as well as our flexible business model. Our core competency is undoubtedly ASC development and management. However, we also manage primary care clinics, urgent care centers and surgical hospitals. Broadening our responsibility into these other areas makes us better ASC operators because we bring a unique understanding to the role ASC’s play in the value-based landscape of today’s healthcare system.
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What services are provided and how are the services delivered?
Solara Surgical Partners is a full-service management company focused primarily on Corporate partnerships. We deliver a fully transparent experience, desire and demand high engagement from our physician partners and promote the highest of business ethics in all that we do.
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What are the “Management Fees” and are there any “Hidden Fees”?
SSP’s fees are within industry standards which typically range from 4%-9% of net collections (depending on services performed. SSP fees will vary based on the project scope and overall level of project engagement. There are no “hidden fees”, or sources of revenue derived from third-party affiliated agreements.
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Does a Management Agreement imply we have given up decision making authority for our center?
Absolutely not. Each center is Governed by a local Board that is elected by the membership. We are here to lend our experience in decision-making processes; not mandate the directional course of your center.
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What equity position is desired by SSP?
Solara Surgical Partners prefers a minority position. If the Surgeon investors are risk-averse, SSP will consider investing at a higher level. The actual percentages vary on each project.
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What is the revenue management process?
Solara Surgical Partners performs revenue cycle operations (i.e. billing, coding, collections) at our company headquarters. This service is included in our management fees and is not conducted by a third party. We feel this a true benefit for surgery centers that otherwise lack a system of “checks and balances” in the revenue cycle process. Internalizing all these functions at the ASC may seem cost-effective and efficient, however having one person who sends out claims, performs and posts collections and subsequently controls the write-offs is a recipe for significant underperformance. Our billing services have designated teams that provide the various components of the billing and collections process, and those people are physically separate from the ASC. This means that the processes are constantly audited, and the chance of mistakes are drastically reduced.
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How will SSP provide reports and benchmarking?
Physicians should expect regular financial and operational updates, however, SSP feels the investment group deserves more than a monthly report. SSP has developed a robust proprietary analytics platform called SABRE (Solara Analytics Business Reporting Engine). This technology is smartphone compatible putting all your key operating indicators at your fingertips in real-time!
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Can SSP provide the ASC with supply discounts?
Yes. SSP has agreements in place with a national GPO and able to use group purchasing discounts to achieve lower prices for ASC supplies. SSP has aggregated the volume spend of associated facilities to obtain discount tiers that most independent facilities cannot capture on their own. Audits are done to know exactly what a facility is spending to make physician-approved changes that save. SSP has a metrics-based philosophy from the cost per procedure to capital purchases.
Due to the amount of purchases made yearly by SSP facilities. SSP has several IDN arrangements for capital equipment that surpass GPO pricing.
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Does SSP assist the ASC with payor contracting?
Absolutely. SSP has the knowledge and bench marketing tools to ensure the facility obtains payor contracts that are beneficial. SSP understands once base contracts have been established, it is difficult to quickly capture substantial changes.
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Is the management company aligned with the physician partner long-term strategic plan?
Understanding the goals and objectives of the physician investor is a key discovery item during the feasibility phase. This will set the stage for ASC success and promote acceptance of your new service offering within your local healthcare community. Our flexible business models can assist you in crafting short, medium, and long-term community strategies. As healthcare reform initiatives continuously evolve, we monitor trends and keep our surgeon partners informed.
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What is an unspoken benefit of management company affiliation?
Eventually, partnerships run across decisions that are politically sensitive for one reason or another. Having a management company serve as a liaison during these circumstances can prove invaluable at times.