August 5, 2023
The short answer? It depends.
No one wants to hear this, but the connection between the number of physician partners and ambulatory surgery center’s profitability is much more complicated than a headcount.
Instead, the focus should be on the revenue required for a successful ASC partnership.
To forecast a surgery center’s profitability, we analyze past outpatient surgeries and associated case volumes for surgeons who want to form ASC partnerships.
To demonstrate, let’s run the numbers for two actual ASC partnerships—one with four physician partners and the other with 12 physician partners.
Line 1: 4 total joint replacement surgeons, each performing 250 total joint arthroplasty (TJA) cases annually in the ASC, results in ~$4,200,000 net profit annually. Each 18.75% owner would receive ~$787,500 in annual distributions from the ASC partnership.
Line 2: 12 Orthopedic/Spine surgeons perform 2,400 cases annually in the ASC (200 per surgeon), resulting in ~$7,200,000 net profit annually. Each 6.25% owner would receive ~$450,000 in annual distributions from the ASC partnership.
Key drivers of attractive financial results are clinical quality and efficiency.
Other factors to consider when evaluating a new ASC partnership from a financial perspective are:
· Payer mix of the surgeons/practice
· Projected commercial payer rates
· CON state vs. non-CON state
· Time to complete each case and associated staffing costs
· Implant costs
Navigating these factors skillfully can drive greater profitability in your ASC. If you’re interested in developing a new ASC but don’t know if it’s financially feasible or where to begin, request a customized proforma here.
