Crystal ball forecast for outpatient surgery
By Stephen W. Earnhart, MS
CEO
Earnhart & Associates
Houston, TX
Most of us are confused about where the opportunities lie in healthcare today. It is not uncommon to have friends ask if they should continue their plans to attend nursing school or surgical tech programs or whether they should even get into healthcare at all!
There is confusion. Consider the following examples:
• We have clients who are asking, "Should we build our surgery center larger than we intended?"
• We have hospitals asking, "Should we develop a lower cost facility for our surgical patients or revamp our in-house’ program, or just go out and buy an existing surgery center?"
• We have surgeons wondering if they should become employees and let their new employers deal with worries about the future.
• We have contractors who are financing surgery center development and asking, "Are these still a good opportunity?"
• We have staff members contemplating if they should go back to school and get a degree in some other field other than healthcare.
• We have suppliers worried about their commissions.
• We have consultants who are worried about everything.
My response is: The sky is not falling. The American public always will need surgery. We will always need facilities, staff, surgeons, and supplies. I know what you’re thinking maybe not consultants!
As I have always recommended, do what you do best, and stick with it. As a company, we have never been busier. We are hiring administrators, business office staff, RNs, techs, instrument room personnel, and front desk staff. We are building 12 new surgery centers this year, revamping three existing hospital surgical departments, and negotiating with payers and trade vendors for all. Nothing has materially changed in the marketplace! That doesn’t mean nothing will change, but remember: The American public will always need surgery! Healthcare is not going away, and neither should you.
Here are my recommendations:
• Yes, build your surgery center, but build it "right-sized." Don’t make it so ridiculously small that no one will ever want to buy it. Conversely, leave room for adding additional operating rooms for a new owner in the future. Position yourself to be as attractive as possible to opportunities that will present to you if you do it right.
• We all are going to have to learn how to do more with less. Lowering the cost of providing services to your surgical patients is obvious. Often it is quicker and cheaper to buy a facility that is already up and running and to try to capture the magic that made that facility work well. Don’t confuse everyone by putting hospital staff in a freestanding facility and expect it to function as it did in the past. It’s not fair to staff at either facility.
• For many of the "younger" surgeons, the idea of becoming an employee can be attractive. For some seasoned surgeons, it can be difficult answering to a young corporate VP. Many employment agreements for surgeons have a significant portion of their income tied to production. Reaching those goals can be difficult in a facility that doesn’t have fast turnover times. Have an attorney review your contract.
• Real estate is real estate. Location is always king. I would be leery of financing a surgery center in the middle of a cornfield. The closer a center is to the perceived medical campus, the better. Location. Location. Location.
• I think it is a great idea to go back to school. Whether or not you want to leave the field is a personal issue. If you are questioning if you want to stay in healthcare, you probably shouldn’t. It’s going to be trying at best with cutbacks on staff, supplies, and more bureaucracy ahead of us. You gotta love it or hate it.
• Trade personnel are most certainly going to have to be more realistic on their profit margins as the entire industry focuses on cost control. I deal with some great vendors. The good ones — the vendors who are in your facility helping you the most — will always do well.
• For consultants, I know: Who cares? Good answer, but the good ones will need to tell you how you can do it and not why you cannot. If you are using one, make them earn their keep by asking questions. Better yet, learn what they are doing, and then do it yourself.
So again, the sky firmly attached, and healthcare is still the best career base around. Enjoy the right decision you made years ago to enter it! [Earnhart & Associates is a consulting firm specializing in all aspects of outpatient surgery development and management. Earnhart & Associates’ address is 238 S. Egret Bay Blvd., Suite 285, Houston, TX 77573-2682. Phone: (512) 297.7575. Fax: (512) 233.2979. E-mail: [email protected]. Web: www.earnhart.com.]
