Competing With an ASC? How Hospitals Can Win

In a July 15 webinar hosted by Surgical Directions, the consulting firm's president and CEO Jeff Peters discussed how hospitals can compete with ambulatory surgery centers in their markets for physicians and case volume.

 

"If they have a focused strategy, hospitals can very effectively compete with ASCs in a marketplace and drive ASC volume down to the point where they exit the market," he said. ASCs are often more attractive to surgeons because ASC operators identify surgeons as their customer and patient care as their product. "When hospitals are able to convey that same level of customer service [to surgeons], they are extremely effective at competing with ASCs, capturing case volume and retaining it."

The key strategies Mr. Peters covered for successful hospitals include:

•    Creating a culture that makes surgeons truly believe they are the customer
•    Meeting or exceeding ASC efficiency
•    Leveraging hospital-owned physician network and physician hospital organization
•    Utilizing a needs-based sales program
•    Developing marketing/referral channels that build surgeon loyalty

Hospitals may also acquire interest or directly purchase competing ASCs. This strategy is particularly effective in mature centers where surgeons are looking for an exit strategy. Hospitals may also negotiate with former surgeon owners to continue bringing cases to the ASC — now owned by the hospital — and managing the operating room.

Currently, around 30 percent of all physicians are employed at hospitals and this percentage will likely grow over the next several years. However, unless hospitals keep specialist referrals within their physician network, they stand to lose millions of dollars each year, said Mr. Peters. Leakage is a huge problem at many hospitals, and in one case study Mr. Peters presented, hospital leaders asked their primary care physicians why they were referring to specialists who weren't on staff at the hospital. The reasons given were:

•    The primary care physicians didn't know the surgeons at their hospital
•    Surgeons outside of their network came to the primary care physician offices regularly and provided in-services for their staff
•    The surgeons on staff at the hospital didn't communicate well with the primary care physicians

Then Mr. Peters and his colleagues met with the surgeons on staff at the hospital to show referral patterns and encourage them to connect more with the primary care physicians. "There were physicians who didn't want to do that, but we educated  them on what other surgeons in the market were doing to gain PCP trust and that they were getting the referrals," said Mr. Peters. "We really gave our surgeons techniques to communicate with the primary care physicians."

There are hospitals leveraging PHO contracts as well with incentives to refer in-network or disincentives for referring out of the physician network. However, to really compete it takes an overall culture change to maximize physician satisfaction and direct referrals to the hospital, said Mr. Peters. In another case study, a Chicago-area hospital was able to compete with local ASCs after:

•    Bringing in new collaborative governance
•    Upgrading OR leadership with an ASC OR director
•    Upgrading anesthesia with a service-oriented group
•    Reallocating block time
•    Providing transparent information
•    Focusing on need-based sales
•    Starting programs that were able to generate referrals to surgeons

"A lot of hospitals are looking at strategies to change the culture of OR nursing," to attract and retain surgeons, said Mr. Peters. "Part of how they are doing this is saying we really want nurses to have the same incentives we have. Instead of paying them on an hourly basis that potentially encourages them not to move quickly, they are paid a salary. They can move quicker, the surgeon is happier and the OR nurse can go home happy without pay docked."

The operating room can also become more efficient by flipping rooms, using room turnover teams and parallel processing. "Hospitals that focus on turnover time can rival ASCs," said Mr. Peters. "If hospitals put their mind to it, they can effectively compete with ASCs."

View the webinar by clicking here.

View the webinar slides by clicking here.

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View archived webinars here.

More Articles on Hospitals:
Drive Perioperative Performance to Improve Your Bottom Line
The "Surgical Home" Solution
Best-in-Class Perioperative Care: Optimization for Accountable Care

 

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