What is the physician ownership mentality?
By Stephen W. Earnhart, MS
President and CEO
Earnhart & Associates, Dallas
If you work in this industry long enough, certain patterns and trends start to gel. One is physician behavior. How is that behavior different in an ambulatory surgery center (ASC) based upon the partnership of the facility? Or is it different at all? And who am I to write about it?
Well, after developing and managing ASCs for 18 years and with more than 4,000 one-on-one surgeon interviews on their thoughts on ASCs (and hospital operating rooms as well), I do believe I am qualified to write my observations. Is the behavior different? Oh, yes — very different. The behavior varies depending on whether the physicians are users, investors, members of a physician-only group, physicians in a hospital joint venture, or physicians in a joint venture with a corporate partner.
Space will not allow discussing all the options; so let me focus on the investor vs. user role of physicians in an ASC environment. The fact is that the same surgeon will act completely differently in both roles. A good example is a surgeon who does an 8 a.m. case at the local not-for-profit hospital, then goes and does a case at another ASC for whatever reason, and then comes back to finish the day at the center where he or she is a financial investor.
The difference in mindset is striking. When physicians are owners:
• They want to know what things cost. Informing them is absolutely the very first step in getting them to work with you on controlling costs. You have the opportunity to explain to them what that vendor rep really is costing the center when the surgeon insists upon an exclusive arrangement with someone. When the surgeons ask what one thing costs — you tell them what everything costs. This is when they start to realize that the cost of that new instrument or device actually is coming out of their pockets.
• They will do without to save money. Do they really need a second scrub? Can they use the old equipment? Will they buy refurbished equipment? Absolutely. They still will want the best at the hospital, but they will not use it as much as the older one at your center. If you take the time to explain to them that it is more economical to expand your hours of operation than it is to build that new operating room, they will listen.
• They want the staff well compensated. After you have finished laughing, continue to read this part. They really don’t want to have staff turnover. It is your job to let them know that one way to avoid that is to be fair and recognize that good staff are hard to find and expensive — but that recruiting new staff and training them is about twice as expensive as well-compensated staff.
• They want staff to share in the financial profits of the center. If you explain the importance of this, they will listen to you. Every time the owners receive a distribution of profits, staff should as well. The owners know the importance of staff receiving extra for that late afternoon smile or starting their cases early to increase the profitability of their investment.
• They are willing to be retrained on their own efficiencies. If you play your cards right, this can be a great management tool. Let your ophthalmologist know that the other cataract surgeons’ cases are only 15 minutes and not 60 minutes like his. Show them what equipment their highly cost-effective and efficient peers are using on their cases. Many times the surgeons feel that they cannot do something "out of the norm" because they don’t want to go it alone. Making them understand that others are doing it really helps. A good example of this would be not having the cataract patients disrobe for their cases, or not allowing the parents into the room with pediatric cases.
• They want influence in decisions, but not day-to-day responsibility. Asking their advice and getting parameters in your managing efforts will go a long way in how the investor treats you. They don’t want to micro-manage, but they will do so if they feel as if they have no influence in what you manage.
• They want flexibility in scheduling. We find so many administrators who make their jobs much harder than they need to be by not asking the investors to change their cases around to save money and wear and tear on the staff. The angry investor physician who will scream at you for not flip-flopping her room can act completely different if you explain that you wanted to accommodate a new surgeon by giving her an on-time start.
These are just a few examples of the differences. There clearly are more, but understanding the investor mentality will go a long way to making that investment more profitable and your life easier.
(Editor’s note: Contact Earnhart at 5905 Tree Shadow Place, Suite 1200, Dallas, TX 75252. E-mail: [email protected]. Web: www.earnhart.com/benchmarks.htm. Earnhart and Associates is an ambulatory surgery consulting firm specializing in all aspects of surgery center development and management.)
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