Speaker: Consider reimbursement, equipment prior to opening an ASC
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SAN FRANCISCO — There are several ways physicians can obtain funds to open an ASC, such as through a cash call, by all physician partners providing the money up front or through a lease-to-own option, according to a presenter here.
“Leasing is a predictable way to know your expenses,” George C. Branche III, MD, said in his presentation at the Arthroscopy Association of North American Annual Meeting. “It’s a way to keep your expenses down and so when you’re talking about your working capital to get your furniture, get your equipment, it gives you a budget on what will work.”
One factor that physicians should be familiar with when starting an ASC is benchmarking, according to Branche. He noted physicians should know what hospitals and other surgery centers in the area pay for equipment. Branche added physicians need to know the reimbursement rates for implants among their insurance carriers.
“You have to know about the prospective surgery that you’re going to be performing because at the least you want to break even,” Branche said. “If you have surgeons that are putting in a lot of exotic implants, you’re losing money by doing the surgery there. So, it’s important to know about your reimbursements as you’re deciding on what implants and inventory you want to have.”
Physicians need to consider how they are purchasing bigger equipment items for their ASC, such as an arthroscopy cart, according to Branche. Depending on the expense and how many arthroscopy carts are needed, Branche noted physicians may consider purchasing these outright. He added leasing is another good option, as well as purchasing pre-owned equipment. Although physicians may consider a pro rata per case model, in which the company bills a set fee per case based on implants, disposables and the tower, Branche said that option should be reserved for a mature center that knows what types of procedures it will perform, as well as how many.
“[Pro rata] sounds like a good idea, but I would only recommend that with a mature center where you have your data so that you can go to the company and have some knowledge to talk about it,” Branche said.
When it comes to storing equipment for an ASC, Branche said a consignment model with a local equipment representative can be useful.
“Consignment is they allow you to store their implants and you get billed for them only when you use them,” Branche said. “It allows us to keep track of our inventory, it keeps our monthly expenses low and, over time as your center becomes mature, you know exactly what you need to order.”
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Branche III GC. Arthroscopic equipment/implant selection strategies. Presented at: Arthroscopy Association of North American Annual Meeting. May 19-21, 2022; San Francisco.
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