4 Things to Consider Before Planning an Ambulatory Surgery Center

4 Things to Consider Before Planning an Ambulatory Surgery Center

Positioning your Ambulatory Surgery Center for success in the early planning stage will help you avoid costly mistakes later

No provider wants to be stuck in this scenario: it takes 18 months to plan and build an Ambulatory Surgery Center (ASC), and after opening and operating for 6 months, it is less profitable and less utilized than expected. Remaining profitable or even increasing profitability over time can be challenging for any ASC, but it’s nearly impossible with a poorly planned facility.

According to 2021 industry benchmarks, an effective ASC facility’s fixed / total asset utilization (which measures utilization of fixed and total assets pertaining to the generation of revenue) is between 1-2 — with an annual industry average for ASC profits between 20-25 percent.

What can be done during the planning process to mitigate potential problems and make your ASC an above-average facility that performs as efficiently and profitably as possible?

A successful ASC incorporates the following factors in the physical layout of the space: 

  1. Mix of high revenue and high-volume cases
  2. Functions and operates relative to its ownership structure and the facility financial goals
  3. Aligns with market direction and trends
  4. Considers lean principles and operational flow and how they support each other

These five factors can have a major impact on the design and operations of the facility. Let’s examine each one in more detail.

Case mix informs ASC design

The reimbursement shift has caused an increase in the types of cases that now will be reimbursed when done in Ambulatory Surgery Centers. In addition to the surgeries that have traditionally utilized Ambulatory Surgery Centers, ASCs are beginning to see more orthopedic cases, including total hips and knees, and spine cases.

The design impact of this shift is that Ortho / Neuro cases need a larger OR than General Surgery ORs. These ORs tend to be equipment intensive and will need adequate, adjacent storage. For this reason, we recommend designing ASCs with a high percentage of ortho cases to have larger ORs and more storage.

The case mix also has downstream impacts to patient volume, market growth, prep time, operating time, turnaround time, and recovery time. These variables further change the amount of space needed.

Take patient recovery for instance; some cases may need patients to recover longer. Those patients would need to be accommodated as well as having enough spaces for the patients who will recover faster.  The number of recovery spaces needed for Ortho / Neuro cases will not just be the initial PACU / Recovery Bay waiting for them to wake from anesthesia, but also enough space for ambulation and a location to practice stairs.

With a balanced case mix of high revenue cases and high-volume cases, you are less likely to have gaps in the schedule where ORs are sitting unused.

High Volume CasesHigh Revenue Cases
ENTSpine/Orthopedics
GastroenterologyPodiatry
Pain ManagementUrology

Ownership structure and finances inform Ambulatory Surgery Center design

An important question to consider is: who will own and manage the ASC?

  • Physician Groups
  • Health Systems
  • Investors / Management Companies
  • Combination of above

Different ownership entities tend to have different approaches to processing and storing supplies. For example, a facility that utilizes an off-site sterile processing center and central storage, will reduce the amount of storage that will be needed on-site. The off-site facility could be owned and operated by a health system or by an independent contractor. Deciding early how sterile processing for the facility will be handled will have an impact on the size and configuration of the ASC footprint.

Other differences we have seen include the size of anesthesia group areas and the presence or absence of a Pyxis medication dispensation system.

Depending on how ownership is structured, there will be different financial goals for the facility. As an example, a developer-owned ASC will not have the cost burden that a health-system owner would incur for branding and interior finishes that adhere to system standards.

Breaking down all the potential ownership needs and goals as they relate to facility design helps to have spaces optimized for proper functions and operations.

Market direction and trends inform ASC design

There are 3 main drivers in the ASC market:

  1. Facility regulations and accreditation: As CMS expands the list of procedures that can shift to an ASC setting, the demand for new ASC facilities will increase. Some states can dampen this demand for new facilities due to their certificate of need (CON) laws. Estimating the quantities of the types of procedures your ASC anticipates (as in the example of orthopedic cases described above) informs size and quantity of OR types.
  2. Payer reimbursement policies: Some payers are adjusting their reimbursement rates to try and steer more patients to ASCs. Designing your ASC to align with the types of cases that will be performed increases utilization because you don’t have to wait for the right OR to open or wait for a recovery bay to become available.
  3. Consumer preferences: Especially in this unsettling time, patients see an ASC as a safer environment for their procedures in lieu of going to a hospital where the “sick people” are. Additionally, when payers use reimbursements to shift cases to an outpatient setting, some consumers will stay with the system that they know, but others will shop around and pick where they feel they will get the best outcome and experience. While this doesn’t really affect the quantity of square footage of the facility that will be built, the quality of the FF+E affects the cost per square foot. In certain demographic markets, a higher quality of interior design may make the facility stand out and be more competitive in attracting the desired clientele.

One way to prepare for this fluctuation is to design procedure suites that can be converted to operating rooms in anticipation of increased patient volumes or shifts of procedure-type cases downstream to primary care environments.

Lean principles + operational flow work together to inform ASC design

In effort to be “lean,” some clients choose to build spaces that meet minimum requirements. However, this does not necessarily translate to an operationally efficient space.

For example, FGI requires one recovery bay for every operating room, but depending on case mix, that may not be sufficient. As a consequence, when no recovery bays are available, procedures are held back and/or utilization goes down. This results in decreased revenue day in and day out. It likely would have been less expensive to build the additional recovery bay than to have decreased revenue over the lifecycle of the project.

While it is fiscally prudent to not over-design spaces larger or in greater quantities than they need to be, consulting evidence-based design and research industry minimums, standards, and benchmarks helps provide guidance as to where the minimum size is sufficient and where more-than-minimum quantities could have positive benefits that outweigh the added construction cost.

Another tool we use is mapping the patient, staff, and other flows to design the space to fit the operational model. When the building is a “skin” around the optimal operational process, the benefit is that you don’t build unnecessary or unused space.

To learn more about how we mapped containment, patient, and material flow in response to the pandemic, check out our recent article in Medical Construction & Design.

Ultimately, an ASC design that addresses each of these considerations will function efficiently, fulfill stakeholder goals, generate healthy net revenue, and be a pleasant experience for patients and families. We invite you to schedule a discovery call  with one of our Advisors to see if your upcoming ASC project is positioned for success in each of these four categories.

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