What Do We Hope To Achieve in 2010?

As the New Year starts, many of us make resolutions. As we do this, we are haunted by memories of the failed resolutions of years past. In business, we call it “Budget Season”, where we attempt to read the “tea leaves” and see what is possible in the environment in which we find ourselves. What can we accomplish with the business climate, the personnel and the financial resources available to us?

This year is especially tricky due to the coming healthcare reform. However, many of the provisions do not begin until 2014, leaving a fairly predictable future in the short term. What do we know? We know that Medicare is increasing ASC reimbursement by 1.2% for the first time in six years. We know that the transition to hospital outpatient rates will be fully applied in 2011. We know this helps our reimbursement for Medicare orthopedic, general surgery, and gyn surgery patients. We also know that the ASCs will be paid somewhere between 50% and 59% of the outpatient rates in their markets. None of these facts help us materially or threaten our businesses.

So what do we hope to accomplish this year? Our first and foremost goal is to increase cases in our existing centers. The term, “same store sales” is frequently used in retail business to measure year over year sales results. This year, we will be working with our administrators to measure and improve this benchmark. We hold quarterly competitions with our centers and make small bonuses available to the administrators for achieving excellent results compared to their peers. This year, our incentives will be focused on achieving better results compared to their prior year results. We are hopeful that this emphasis will open our eyes to opportunities for more cases from our existing partners, our new partners, and community doctors with no ownership in our centers.

Second, we are seeking to align as many of our centers as possible with local hospital partners. In 2009, we partnered with Marietta Memorial in Marietta, OH and Kishwaukee Hospital in Sycamore, IL. We also opened our second site with St. Mary’s Hospital in Reno, NV. We believe that these partnerships bring long term stability in a consolidating insurance market and a lower reimbursement environment.

Finally, we are aiming to bring on six additional facilities in 2010. We have changed our marketing practices in the last 6 months to be more proactive. We are calling on centers that might need assistance and capital in order to see more opportunities. This is working well and our pipeline is full. However, our best source of new business is always a lead from an existing partner. We continue to pay a finder’s fee for any referral that leads to an investment. Please feel free to contact me if your colleagues are interested in building or buying an ASC. New physician owned hospitals are available until healthcare reform is passed. The current date for treating Medicare patients is August 1, 2010.

Best wishes for a prosperous New Year. We look forward to serving you and your patients as we move into the year and understand better what our government has in store for us.
 

Thomas Mallon, CEO
Regent Surgical Health
P. 708.686.1522
F. 708.492.0547