Is it Time to Add Spine?

In 2006, the Surgery Center of Reno, a joint venture with St. Mary's Hospital in Reno, Nev., was performing 500 cases a month - and losing money. A little over a year later, after partnering with Regent and recruiting 22 new physicians, the facility turned a -15% return on investment into a 110% return on investment.

How'd we do it? In addition to a shift in management structure one major key to our success was the addition of spinal surgery to our facility's case mix. Today, about 16% of our facility's profits come from spinal procedures, which make up only 2% of the cases we do.

Whether you're planning a new surgery center venture or looking to diversify the caseload at an existing facility, spine surgery presents an excellent opportunity for profitability and future growth. But developing a new spine program also requires a sizable upfront investment in capital equipment and top-notch surgeons who are comfortable doing complex procedures in an outpatient setting. Here's how to make this low-volume, high-profit specialty work for you.

Advances in technology and treatment have let many spine procedures that once were available only on an inpatient basis migrate to the outpatient setting. The market is expected to grow exponentially in the coming years as these technologies continue to improve, more physicians become comfortable doing spine procedures on an outpatient basis and the large population of baby boomers grows older.

While spinal surgery involves a huge upfront investment in equipment, the favorable reimbursement environment for spine procedures lets you maintain high margins while performing fewer cases. Adding spine also brings new physicians to your facility who can add or contribute to other profitable service lines, such as orthopedic and pain management cases - 2 specialties that are also experiencing considerable growth in the outpatient market.

The first step to adding spine cases is to identify and recruit dedicated surgeons who want to perform procedures in an outpatient setting and are at ease doing so. A successful spine program requires neurosurgeons and orthopedic surgeons who can work together to conduct complex surgeries and achieve the goals of improved quality of care, patient satisfaction and profitability.

How do you convince world-class surgeons to join your fledgling spine program? Show them you've got a world-class facility that offers them something they can't get in the practice, hospital or ASC where they currently work. Ease of scheduling, a top-notch support staff, the opportunity to do fewer cases while maintaining high margins and the ability to have direct input in management and equipment purchasing decisions are some of the perks that will lure spine surgeons to your facility.

It's important to cross-train your nurses and techs so they're able to assist on a variety of different types of surgeries. Spine and orthopedics go hand in hand, so when adding these specialties you may want to train staff members specifically to work on those cases. Anesthesia personnel should be comfortable with the ASC model and use alternative post-op pain management strategies to get patients moving sooner after surgery.

If you want to develop a state-of-the-art spine program for your ASC, your capital equipment purchases should support that commitment. Be prepared for a costly upfront investment in big-ticket items like OR tables and imaging equipment. But while your initial outlay may be large, keep in mind that a well-organized and financially successful spine program can recoup this investment in a relatively short time.

When equipping a spine program in an ASC, the process is similar to outfitting a hospital operating room, but don't simply replicate what your surgeons use in the hospital. Often, ASC procedure rooms and ORs are smaller - and so are the budgets. Carefully evaluate which pieces of equipment best meet your surgeons' preferences, are necessary for the procedures they perform and physically fit in your space.

As your center's spine program grows and your surgeons become more experienced, you may wish to offer more advanced, minimally invasive spine techniques, which use table-mounted tubular retractor systems or other retractor systems available on the market with expanding port systems. Be mindful of 2 things when your surgeons request this equipment: It tends to date very quickly, and it often falls out of favor among surgeons looking to use the newest systems. Arrange for your vendor to bring in such high-end equipment, including minimally invasive lumbar spine instrumentation cases, on a case-by-case basis for an agreed-upon fee. That way you won't spend thousands of dollars on equipment that is barely or never used.

Once you've established your spine program, examine demand in your market and the quality of programs meeting that demand. Growing your program is less a matter of handling a high volume of cases than handling the right cases. Identify service areas that are underserved in your community and consider whether adding spine to your facility would improve your margins and enhance the area's health care.

James Lynch, M.D.
Director of Spine Services
Regent Surgical Health
P. 708.492.0531
F. 708.731.5134