CASE STUDY: CALUMET SURGERY CENTER

Anatomy of a Turnaround

For nearly the first 20 years of its existence, the Calumet Surgery Center produced strong medical outcomes and a solid profit for its largest shareholder, the Hammond Clinic. Situated in Munster, Indiana, about 30 miles south of Chicago, the ambulatory surgery center is a convenient place for both patients and physicians who practice at the clinic next door.

A little over 20 years ago, the Hammond Clinic founded one of Indiana’s first surgery centers. And for most of the years since, Calumet Surgery Center produced strong medical outcomes and solid profits.

The surgery center became a popular place to do procedures. “We were pioneers to some degree,” says Dr. Carl Levy, a member of the Calumet Surgery Center board and general surgeon.

Yet in the past few years, the center’s profitability suffered. The underperforming surgery center had failed to attract new doctors and costs had risen, leading to an unprofitable year. It needed a surgery center turnaround.

In 2002, Regent Surgical Health came in to manage the outpatient center and became a part owner in 2003. In one year, Regent changed management, renegotiated insurance contracts to be more favorable to the center, increased labor utilization and slashed the cost of its maintenance agreements.

Regent also worked with the center’s doctors and board to recruit four orthopedic surgeons and pain management specialists. The center is now solidly profitable again.

“Regent has brought best practices to Calumet Surgery,” says Dr. Doug Murphy, Calumet Surgery Center board president. “We now have benchmarks that we can apply and we have attainable goals.”

In 2003, the center spent 18 labor hours per case; that time is down to about 12 hours per case. “We are more efficient today, and that’s because of Regent’s consistent approach,” says Denise Cheek, the center administrator.

With Calumet Surgery Center on firm footing again, the partners will begin a makeover of the facility in May. Lighting will be upgraded, adjacencies will be improved for better flow and a new GI suite will be added. Eventually, Regent hopes the ambulatory surgery center will become a surgical hospital once the moratorium on surgical hospitals is lifted.

“It’s the perfect location for a surgical hospital, and the facility is the perfect size,” says Regent president Tom Mallon. “The turnaround at Calumet Surgery is just beginning.”