Surgery for seniors expected to slow
Expansion isn’t forecast for all segments of the outpatient surgery market, especially in the market for seniors. After years of stupendous growth, increases in eye surgeries, especially cataract extractions, are expected to slow to a crawl.1 Already, according to SMG marketing group in Chicago, ophthalmological procedures in general have produced flat results as a percentage of total outpatient specialties.
In Washington state, Lynne Oliver, RN, MBA, CNOR, administrator of the freestanding Bellingham Surgery Center, has seen the number of surgeries overall drop by 90,000 between 1992 and 1994 based on state figures. Oliver suspects managed care but isn’t sure. "Where these surgeries have gone, we don’t know," she says.
The terrain for new business is tricky, says Mary Nash, RN, CNOR, director of outpatient surgical services with Promina Gwinnett Health System in Lawrenceville, GA. Promina operates 10 hospitals in suburban Atlanta. Reimbursements are dropping in both inpatient and outpatient sectors, Nash says.
Therefore, before expanding into a new business line, experts advise assessing how the new service will affect or be affected by the following:
• Existing capacity, especially in your operating rooms.
• Total cost, including nursing, equipment, supplies, and OR time.
• Current physician make-up: Will you need additional surgeons? Will they be skilled at the new procedure?
• Level of local patient and payer demand for the specialty.
• Current services: Will you be forced to reduce some to accommodate the new one? Can the new service increase volume? Are there possible synergies with existing technology?
• Reimbursements: Will the new service capture higher payments or result in lower aggregate revenue? Do you need the new service to retain or acquire a large provider contract?
• Corporate or nonprofit mission: Will you be forced to curtail charity care or allowed to increase it?
• Regulatory or certificate-of-need restrictions in your state.
• Competitors: Will rival facilities keep you out of the market?
Underlying all these considerations is a sobering reality, Nash concludes: "Reimbursements for outpatient care have been steadily eroding."
Reference
1. SMG Marketing Group. Freestanding Outpatient Surgery Centers Market Report, 1997 Edition. Chicago.
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