Finding the Right Fit

The advantages and disadvantages of single- and multi-specialty ASC models

By Annie Sariego

Year over year, graduating GI fellows must choose between practicing independently or hospital employment. More questions arise for those fellows who choose to practice with an independent group and seek ownership in their center.

With the continued popularity of ambulatory surgery centers (ASCs), this question has never been more relevant: Should I pursue a partnership in a single- or multi-specialty ASC? Here are some of the considerations to weigh when answering this question.

Financial Factors

If you are buying into an existing center, the initial investment required is important, as well as the overall return on investment. The capital needed to invest in a relatively new center operating only a few years may be more attractive for a younger physician who is just starting their career. The financial return and distributions should increase over time as the center continues to grow and mature. On the flip side, the purchase price to buy into an established center that has been operational for several years can be expensive. Still, the financial return should be proportionally attractive.

Suppose you join a group that is building a new center. In that case, the initial investment is also one of the first components to consider and relatively low compared to buying into an established center. In a multi-specialty ASC, there will likely be more physician partners to divide costs between, which can appear to be a good thing. However, it may be a disadvantage for the partners of a specialty, such as gastroenterology, that requires far less expensive equipment. Plus, the overall multi-specialty facility will need to be larger to accommodate

operating rooms and the variety and types of procedures performed versus smaller procedure rooms for GI cases.

Single-specialty ASCs may have fewer partners to share in the costs. However, the physicians can be assured they are using the equipment they are buying. And the same case can be made for long-term investments such as technology upgrades, renovations, and expansions.

After considering the expenses associated with building an ASC, the projected revenue should be enough to ensure a long-term, financially viable center. A profitable ASC is highly dependent upon expected procedure volume and the number of doctors supporting the center. GI physicians perform an estimated 1,000–2,000 procedures per year, while other specialties may perform less than 500. Moreover, look at the payor mix for these procedures. Are there more governmental payors, who reimburse less, or a good blend with commercial payors?

Finally, consider overall financial risk. Single-specialty partnership models may offer more individual control over financial operations. Yet multi-specialty partnership models usually allow for more diversification of risk, especially if one specialty has the potential to be hit with reimbursement reductions in the future. management services should be the operational support system to keep the business running smoothly, allowing the physicians to focus on the patient care that matters most.

Common management services include financial, marketing, IT, payor contracting, revenue cycle management (RCM), human resources, credentialing, and more. These services—some more than others, of course—can be tailored to the needs of your GI specialty with the added benefit of a single-specialty partner that is a thought leader within the industry.

A multi-specialty business partner supporting all physicians may only offer limited solutions that indirectly affect the bottom line. Of course, they too can share general healthcare management industry expertise, but your day-to-day connections with their most personal services like HR and marketing may not be hypersensitive to the needs of a GI physician.

A Clear Choice

Patient Outreach

While there are pros to the multi-specialty ASC model, the unique benefits to a GI physician in a single-specialty ASC remain unmatched. From cost savings to specialized partner services, the choice is clear. Carol Stopa, former SVP of Business “Over my years in Development at PE, has worked with working with GI gastroenterologists for over 20 years. She says that overall, the decision to When evaluating a single- vs. multispecialty model, the center’s location in physicians, many have select a business partner often comes down to the expertise of what the partrelation to your patient outreach strategy can be very significant long-term. Single- asked, ‘Why should ner can offer and deliver on: “Over my years in working with GI physpecialty GI ASCs are attractive in areas I partner with PE?’ sicians, many have asked, ‘Why should with a mature population of adults over the age of 45. In densely populated I typically respond, I partner with PE?’ I typically respond, ‘Why should I see a GI specialist?’” towns with 55-plus neighborhoods, the ASCs can hyper-focus their outreach ‘Why should I see She continues, “I could have my colonoscopy done by a general surgeon, or I efforts. On the other hand, it can be challenging to reach people at the colon a GI specialist?’” could see my primary care doctor for my stomach ailment—but I would rather see cancer screening age of 45 and over in – Carol Stopa, former SVP of Business a physician highly trained and experiincreasingly diverse urban areas that are Development at PE GI Solutions enced in the GI specialty. That makes me, overwhelmed by younger residents. the patient, feel extremely comfortable

Multi-specialty center partners do and confident I am getting the best care not need to consider location and demographics as closely as possible. Hopefully, the same feelings can translate to a GI single-specialty partners because they offer a variety of pro- doctor who is looking to put his faith and trust in a business cedures to attract a broader patient base. However, whether partner who will take care of his business and livelihood. PE you are considering a single- or multi-specialty center, the is a GI specialist—we understand the specialty through and availability of a competing ASC must be part of your overall through—it’s all we do as an consideration when deciding on a location. organization each and every Annie Sariego day. While the GI doctor is Market Corporate Partner Services When choosing a corporate partner, do you want a jack is taking care of his or her patients, PE is taking care of those same patients. The difPresident at PE GI Solutions. She can be reached at of all trades or a subject matter expert? Both have their ference is we are also taking asariego@ benefits. Remember that a corporate partner who provides care of the doctor.” pegisolutions.com.