This Week in Surgery Centers: Michael McClain – Expanding Your ASC: Bringing on New Surgeons + Specialties

Michael McClain – Expanding Your ASC: Bringing on New Surgeons + Specialties

Here’s what to expect on this week’s episode. 🎙️

Today marks the first episode in our latest series: Expanding Your ASC!

We had the pleasure of hosting Michael McClain, founder of Left Coast Healthcare Advisors, to cover how to bring on new surgeons and specialties seamlessly. Here’s a summary of the key takeaways and insights from our conversation:

🔑 Signs It’s Time to Expand: Key indicators for expansion include consistently maximizing current space to 75-85% capacity and getting to the point where you might be turning away cases due to overbooking.

💡 Bringing on New Specialties: Identify physicians who have extra caseload, align with your ASC’s culture, and have a solid reimbursement profile. Engage nurses, anesthesia, and billing early to ensure everyone is prepared.

🛠️ Bringing on a New Doc: Offer new surgeons trial periods to gauge their cultural fit and performance. Leverage existing physicians and anesthesiologists to find the right candidates.

📉 Common Missteps: Michael warned against expecting 100% efficiency from day one. Budget conservatively and plan for a ramp-up period of six to nine months to reach optimal efficiency. Also, thoroughly understand and negotiate reimbursement rates beforehand.

Check out the full episode on YouTube or your favorite podcast platform!

Episode Transcript

[00:00:00] Welcome to this week in Surgery Centers. If you are in the ASC industry, then you are in the right place every week. We’ll start the episode off by sharing an interesting conversation we had with our featured guest, and then we’ll close the episode by recapping the latest news impacting surgery centers.

We’re excited to share with you what we have, so let’s get started and see what the industry’s been up to.

Erica: Hi everyone. Here’s what you can expect on today’s episode. We have officially wrapped up our capitalizing on the cardiology boom series and we are starting a new series on expanding your ASC. So today I am very excited to have returning guest Michael McLean on to discuss how you can successfully bring on new surgeons and add new specialties to your existing facility.

Erica: Michael is currently the founder and managing member at Left Coast Healthcare Advisors. So he works with [00:01:00] ASCs on their strategic development all the time. So he is just a wealth of knowledge when it comes to growing and evolving your facility in a way that is seamless and financially beneficial. In our news recap, we’ll cover the CMS 2025 proposed Medicare payment rule.

Erica: Diversity in the operating room, the coalition of health AI, and of course, and the new segment with the positive story about a nurse who went above and beyond to save a runner’s life. Hope everyone enjoys the episode and here’s what’s going on this week in surgery centers.

Erica: Hi, Michael. Welcome to the podcast.

Michael: Thanks for having me.

Erica: So this is a very special episode because we’ve never done an in person guest interview before.

Michael: Guess what? Neither have I.

Erica: So we’re in this together and you are our first in person interview and we are filming this at ASCO, which is really exciting.

Erica: This won’t come out for a little while. I think it’ll [00:02:00] probably be around July when people are listening, but we knew we wanted to talk about expanding ASCs. And I knew while I had you, we had to cover that. So

Michael: super

Erica: before we dive in if listeners missed your first episode, can you tell us a little bit about yourself?

Michael: Sure. I think the easiest way to describe me is the kid who didn’t know what he wanted to do when he grew up. So I’m the founder for a consulting firm left coast healthcare advisors. But as far as my background, I’m a hospitalist and critical care PA. I fell into the ASC industry almost 25 years ago and have done everything from run my own ASC, hospital CEO, spent a number of years at Providence as the CEO over all of their ASCs on the West coast and sort of everything in between.

Michael: And so I’ve spent the last year and a half with this new company really trying to help ASCs and health systems build ambulatory surgery facilities that make sense and really [00:03:00] work.

Erica: Perfect. Love it. So we’re going to talk today about bringing on new surgeons and specialties. So what are the signs that an ASC needs?

Erica: should be looking for that might tell them, okay, it’s ready. We’re ready to expand.

Michael: Yeah, it’s a good question. I think of growth is something you should be thinking about all the time. Because you never know when something bad is going to happen. So it’s always good to be thinking about how do we expand?

Michael: How do we grow? How do we have succession planning? So growth should always be on the mindset. What’s next? As far as expansion, though, you really start to think about. Have I maximized my space to the nth degree? Am I really at 75, 80, 85 percent capacity of my ORs? Am I to the point where convenience is now suffering because we’re working so hard to put cases in rooms that we’re turning away cases?

Michael: That’s at the point where you start to think about [00:04:00] expansion. What’s fascinating about ASCs is that from a finance standpoint, they’re a hockey stick in terms of financial performance, 50 percent capacity, even 60 percent capacity. Break, even doing a little bit better, but once they hit that 60 percent capacity, then the performance financially goes way up.

Michael: And so it’s ideal to ride that as long as you can get as much out of your existing space as possible before you make that expansion. But at some point you just have to, because there’s just no more room left.

Erica: Sure. Okay. So let’s say there’s a surgery center, they know they want to maybe bring on a new specialty.

Erica: Maybe they see a need, maybe pay reimbursements. There’s something happening where we really want to get into the specialty, but in order to do they have to bring on a new physician. Where do you begin?

Michael: Yeah, we talk about physicians first and that’s always should be how do we add a physician that brings value to our [00:05:00] ASC and that value means fits our culture Reimbursement profile that makes sense is a good citizen.

Michael: And then looking at the community need as you look at a community communities grow new procedures. Maybe you were an ENT facility and you’re thinking about what’s the next growth area in ENT it’s ideal to see. Who’s a young growing surgeon in the area that will fit culturally maybe providing a service that’s not already provided in the community.

Michael: You never want to be the last ASC adding a new service line. You always want to be the first, but having that good fit, that, that personality is key. And I always say, if you don’t have a reimbursement plan, you don’t have a growth plan. And so the first thing that you need to do is understand What’s the financials around it?

Michael: How are you going to get reimbursed and how is that expansion plan going to get paid for?

Erica: Yep. [00:06:00] And okay. So you’ve check all those boxes, but let’s dive into the surgeon themselves. Culturally, how do you make sure that’s a good fit?

Michael: Quite often the best thing to do is start with your own physicians and your anesthesiologists.

Michael: They quite often are the very best at understanding who are they working with? Who’s an up and comer? Are they growing their own practices and looking for new young partners that are going to fit in the practice? A lot of deals get done around the scrub sink. And so really understanding, is this person not just productive, but are they a good risk?

Michael: bringing in a new surgeon. You then want to do some trial work, meaning and this is a hard pill to swallow if you’re a busy ASC, but provide a little bit of premium time to a new surgeon. Maybe it’s a seven 30 start on a couple of weeks to get a, to get a shot at it, to see what it’s like give them rent equipment.

Michael: Don’t buy equipment, give them [00:07:00] the opportunity to come and spend maybe 30 days in the ass. See how they fit. And so that’s the key from a personality piece. Also make it a, make sure that when you’re working with the idea of bringing in a new surgeon, and especially if it’s either a new specialty, a new procedure, that it’s really a dynamic group that you bring in your nursing team, your anesthesia team, your billing team.

Michael: So that everybody’s on the same page. What’s going to change? Is there going to be new policy and procedures are going to need to be new equipment, new anesthesia guidelines. So have lots of conversations first. So that when they land, the first day is a good day and always assign for lack of a better term, a concierge for that day.

Michael: A nurse or a scrub tech whose sole job is to accompany the new surgeon that day to help them through, here’s the locker rooms, here’s the scrubs, give them an outstanding [00:08:00] experience, and then evaluate in 30 days. Pull the governing board together. Is this a good person? Do we want to make sure they’re the right fit for us?

Erica: Yeah, I think that’s a great approach of like the trial sounds perfect because then the physician can make sure that it’s something that they want to move forward with and then everyone at the ASC. can as well. Is it typically current physicians recruiting new physicians?

Michael: Typically it’s unusual that you’re going to see a non, an outsider bring a physician in.

Michael: Now occasionally you will have physicians who will come from the outside and say, Hey, I’m a busy XYZ specialist and I really want to use your AFC. Generally you want to avoid outsiders just coming in. There’s a few caveats is that every physician has to go through credentialing and privileging.

Michael: Once a physician applies for privileges and is credentialed to come to the facility, you’re stuck with them in the [00:09:00] facility. So you want to really limit those opportunities to those who, are going to likely be a good fit. The second stage of sort of that engagement is ownership. But the last thing that you want to do is just offer ownership to someone you don’t know if they’re a good fit or not.

Michael: That’s why that trial becomes so important. And that’s why we really discourage just someone off the street coming in. You really need to do your homework. And it’s more than just. checking the boxes on the application.

Erica: Sure. Yeah. That’s great advice. All right, you’ve gone through all of that, you really want to bring this new physician on, maybe it comes with a new specialty, maybe it doesn’t, but how does that impact the clinical workflow?

Erica: What are your considerations do you need to be aware of?

Michael: So it depends on the breadth of the new patient. Surgeon and the skill or procedures that they bring. So if they’re bringing a variation of surgeries that you’re doing today, you have an orthopedic surgeon who’s coming to do a different type [00:10:00] of shoulder, or maybe more expansive, a lot of times the clinical impact really is much smaller.

Michael: It’s more about anesthesia. Understanding, do they want, blocks or general anesthesia? What type of anesthesia do they want to provide? Maybe they have different instrumentation. They have to be comfortable with the equipment you want to use. I don’t encourage facilities to go out and buy all new equipment for a new surgeon unless there is a tremendous amount of volume coming along for the ride.

Michael: The other pieces though are if you are going into an entirely different procedure or maybe an entirely new specialty, really look at not just instruments, but sterile processing, recovery time. I’ve had facilities that said, Hey, let’s just add total joints. Let’s make sure your rooms are adequately licensed that can do a total joint in that space.

Michael: Make sure your sterilizer can actually take all the trays. That are required to do the case. And so you have to have a pretty [00:11:00] comprehensive look At all the equipment that’s coming in as well as again, back to that pair piece do your existing contracts actually reimburse you to do the procedures you want to do?

Michael: Because a surgeon is going to be very interested in moving quickly and you don’t want to do cases for a loss. You want to be prepared for it. And so being able to understand what their payer mix is, what the volume is, where it’s coming from. We’ll help you then better prepare for that new specialty coming on board.

Michael: And you can be transparent. Hey, we have an Aetna contract. We have a United contract. We don’t have a Blue Cross contract for you yet. These are the cases we can work with you. We’ve talked to nursing. They’re set to go. Oh, you’re bringing on pediatrics. We don’t have a pediatric anesthesiologist, so we have to get ready for pediatrics.

Michael: Our nurses have to be trained, et cetera. So you really have to have a comprehensive look.

Erica: Yeah, definitely. You had [00:12:00] mentioned operating at a loss. So is it common at all when you bring in a new physician or at a new specialty to operate at a little bit of a loss as you’re learning or no.

Michael: So there is a, there’s a balance. What I would say is that from an operating loss, it’s common to go slower in the beginning. And maybe you’re not making as much money as you hope because you don’t have the level of efficiency yet. What I would never advise someone to do is to take a case through when they don’t have a contract rate to reimburse them adequately.

Michael: And the reason is that in most cases, payers are not going to. fix the problem later. The one time that you have the most leverage in a reimbursement negotiation is before you start doing a case. So if you need, if if a case is going to cost 10, 000 and your current [00:13:00] reimbursement is 5, 000, if you accept that 5, 000 payment a couple of times, You’ve now told the payer that 5, 000 is okay.

Michael: And you’re going to have much more difficulty getting to that 10, 000 or 15 or 20, 000 payment that you should have. You have much more leverage to say, I’m not going to bring this here until I have a reimbursement rate that’s adequate, but that’s hard on new surgeons. Surgeons want to bring everything.

Michael: It’s very difficult for them to have different places of service. I got to take some to the hospital, some of the ASC, some here, some there. And so you have to be very transparent and upfront in that conversation. Yeah. And I would encourage, start with Medicare, start with the things that aren’t negotiable, and then work through your commercial agreement.

Erica: Gotcha. Okay. Perfect. That makes sense. You’ve already given us so much great advice, but are there any common missteps that you see [00:14:00] ASCs take when trying to expand?

Michael: I think the biggest misstep we see is The assumption that you can go a hundred percent day one, that’s probably the biggest misstep is that it takes time to get efficient.

Michael: Even with just adding a simple revision to an existing procedure. It takes time. It takes time for nurses to learn the new protocols. It takes time for anesthesia to gain a level of comfort with the type of blocks someone wants. The patient throughput takes time. And so in our experience, when you add a new service line or new specialty, excuse me, it can take six to nine months to really get to that high level of efficiency.

Michael: Oftentimes, no one is budgeting for that. They’re budgeting for Yesterday we had no cases, tomorrow we have cases. So we really encourage folks to budget very conservatively and budget for that ramp up [00:15:00] the other misstep. And I know I sound like a broken record, but it’s reimbursement is that you really have to understand what do your contracts pay you today?

Michael: And can you do the procedures you want to do with your existing contracts? And if not, what do you need to do to adjust your contracts? Knowing that sometimes a commercial. Reimbursement negotiation with a big payer could take a year, and so you have to plan quite a ways ahead and understand where are those cases coming from?

Michael: Are they coming from a hospital? Are they coming from an area where there’s an exceptionally high cost? And so payers are super excited to work with you. I say that tongue in cheek, but you have a better opportunity because you’re a savings compared to moving from one ASC to another where maybe the differential isn’t that big and you have a lot less leverage.

Michael: And so it’s doing those pieces. We call it doing your homework. You’ve really got to spend the time up front so that you don’t get six months down the [00:16:00] line. And now people are writing checks. Sure. Nobody wants to write checks after the fact.

Erica: Perfect. All right, Michael, we do this every week with our guests.

Erica: What is one thing our listeners can do this week to improve their surgery centers?

Michael: Oh, one thing this week you told me this was coming. Okay. This is a personal one for me.

Erica: Okay.

Michael: One thing that I’ve done in every facility I’ve ever owned is I personally hate what I call the cattle call, which is someone opens a door and they call out a name.

Michael: Erica. And they bring you into the back. I think a great thing that you can do in your ASC is create a process out front where the receptionist grabs the name of the person writes down where they’re sitting. And so when the nurse comes out to get the patient, they see the note, they walk over to the patient and they say, hi, are you [00:17:00] Erica?

Michael: I’m Michael. I’m going to be your nurse. Come with me. I think that sets up your experience and the patient’s experience to be phenomenal because it’s personal. It’s not the cattle call. That’s my personal advice that somebody can do today.

Erica: I think that’s great. And I think it’s those little personal touches, as you mentioned, that you’ll see on the satisfaction reports, just making them feel comfortable and at home.

Erica: So that is great advice. Thank you so much for coming on today. As always, it has been a busy week in healthcare, so let’s jump right in. On July 10th, CMS officially released the 2025 Proposed Medicare Payment Rule for ASCs and HOPDs. As always, the document is extremely long, it’s 984 pages, and ASCA has done the tedious work of going through the entire document and sharing [00:18:00] an initial summary with the industry.

Erica: Here are a few of the highlights that ASCA shared and kind of some of the updates that we all look for every year. First and foremost, CMS has taken ASCA’s recommendation and will continue to align the ASC update factor with the one used to update HOPD payments. That extends the five year interim period and additional two calendar years, so through 2025.

Erica: Next, if the proposed rule were to be finalized as drafted, ASCs would see on average over all covered procedures, an effect an effective update of 2.6%, which is a combination of a 3% inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.4% points.

Erica: So that’s how they got to that 2. 6 percent number. And as always, this is an average, and the [00:19:00] updates might vary significantly by code and specialty. So while that is the average, take it with a grain of salt. Next is the ASC covered procedures list. So the good news is that CMS proposed to add 20 medical and dental surgical procedures to the list.

Erica: The bad news is that CMS did not propose any of the 18 codes that ASCA submitted in February through CMS’s new ASC CPL pre proposed rule recommendation request process. ASCA submitted 16 cardiovascular codes and 2 spine codes for consideration. And then lastly, the ASC Quality Reporting Program.

Erica: So CMS is proposing to adopt 3 new measures in both the ASC and HOPD setting. The first is the Facility Commitment to Health Equity Measure. The second is the Screening for Social Drivers [00:20:00] of Health Measure. Thank you. And then the third is the screen positive rate for social drivers of health measure.

Erica: And unfortunately, ASC 20, so that COVID 19 vaccination coverage among healthcare personnel measure, is proposed to remain in the program moving forward. I feel like we go through this same rollercoaster ride every year. The proposed rule is that Is always full of disappointments, it seems, but then due to the advocacy of ASCA, the state associations, and individuals in the industry, the final rule typically shakes out to be much more promising.

Erica: But that only works if people actually submit comments to CMS. So if there are things in the proposed rule you do not like or would like to see changed, like I know ASC 20 The COVID 19 vaccination measure is a big one. And of course the covered procedures lists. If you’d like to see changes to things like that, you do have until [00:21:00] September 9th to let CMS know,

Erica: Ask a plans to, of course, submit their comments, but they will also be providing additional analysis and a rate calculator to really understand the implications of the proposed changes. And as always, I will include all the links you need to learn more and take action in the episode notes.

Erica: All right. This next story dives into the topic of diversity in the operating room. Particularly focusing on the representation of female surgeons. So despite progress in many areas, surgery remains a male dominated field, especially in orthopedics where only 5. 9 percent of surgeons are women. This disparity is highlighted by Dr.

Erica: Michelle Caird, who is a pediatric orthopedic surgeon and the first female chair of the department of ortho surgery at Michigan medicine.

Erica: Dr. Kare decided to become a surgeon because she was inspired by her [00:22:00] father, who’s a vascular surgeon. Now she’s dedicated to mentoring, inspiring the next generation of diverse orthopedic surgeons and showing everybody that they too can thrive in the OR. And she has a goal to make orthopedics an appealing and attainable career choice for a broader group of people.

Erica: So not just women but bringing a lot more diversity into the ortho surgeon world as a whole. And the studies that they did, they really shared that diversity in surgery isn’t just about fairness. It’s also about patient outcomes. So research indicates that patients fare better under the care of female surgeons.

Erica: Studies involving over 1. 3 million patients revealed that those treated by female surgeons had fewer complications and readmissions at 30 days, 90 days, and one year post operation compared to those treated by male surgeons. For instance, at 90 days post op, patients of female surgeons experienced complications [00:23:00] 12.

Erica: 5 percent of the time versus 14 percent for male surgeons. And this gap widened at one year post op with complications at 20 percent for female surgeons patients compared to 25 percent for male surgeons patients. While yes, these findings suggest that female surgeons may have certain attributes that lead to better patient outcomes, the co authors of the study urge readers to move past the gender comparison and really focus, try to focus on those certain attributes that they’re bringing to the table.

Erica: Let’s learn the differences. Share them amongst everybody and ultimately improve patient care. And to achieve greater diversity, it’s crucial for surgical facilities to create an inclusive environment when, where women can thrive. I’ve never worked in a surgery center myself, but from my friends who have, I’ve heard plenty of stories about how difficult it can be to be a woman in an operating room.

Erica: Trying to change that culture and create an inclusive environment. for women can make a huge [00:24:00] difference. And if you’re interested in learning more about why having diversity in a healthcare setting is important, Outpatient Surgery’s theme for their June July edition is The Power of Diversity, and it includes articles on how to care for patients with autism.

Erica: It has a roundup of 24 DEI stories and just tips for workplace culture as a whole. So I would highly recommend checking that out. All right, switching gears, the Coalition for Health AI, also known as CHI, has released a draft framework aimed at establishing responsible standards for deploying artificial intelligence in healthcare.

Erica: I was not familiar with CHI prior to reading this article, so I’ll just share a little bit of what I learned. They are a network composed of health systems and tech companies who seek to address a significant gap left by the COVID 19 pandemic. Federal and state governments, as the private sector rapidly advances in AI technology.

Erica: I [00:25:00] actually just did a presentation to CASA, the California Ambulatory Surgery Association, on how to incorporate AI into your ASC, and a big part of that conversation was how to go about it safely, and, obviously for your staff and for your doctors, but primarily for your patients. So anyway, that’s exactly what CHI is trying to do, is to make sure that there are regulations and when these things are coming out there’s that checks and balances to make sure patient safety is at the forefront.

Erica: So CHI was founded in 2021 and has grown to include 1, 300 member organizations, including Microsoft, Google, and Amazon. Okay, so why are we talking about them? CHI has introduced the first draft of a framework to ensure the safe and effective use of AI in healthcare. For So the document outlines how standards can be integrated into each stage of AI development, from problem definition to large scale deployment.

Erica: And it also includes checklists for evaluating AI performance. [00:26:00] So CHI’s core principles for trustworthy AI include usability, efficacy, safety, reliability, transparency, equity and data security. The guidelines also provide use cases to demonstrate best practices such as using generative AI to extract data from EHRs or deploying imaging AI for mammograms, which we’ve actually talked about a few times, the success rate that trials have seen in both of those areas.

Erica: So Chai is currently inviting public feedback on their draft. I couldn’t find an exact date as everything I read just kept saying it’ll be open for 60 days, but based on when Chai’s press release was published, I would safely guess the deadline is somewhere around August 25th.

Erica: So I think this coalition is really interesting and I really appreciate what they’re trying to do. Guidelines like this will be crucial as the rapid interest in AI, of AI in healthcare continues to grow. They’ll, of course [00:27:00] there’ll be need for regulation. I actually read, That, so while it seems like Chai is leading the charge here, I read that there have been over 200 sets of guidelines, officially issued globally by various entities when it comes to A.

Erica: I. Plus the Department of Health and Human Services has a task force that is currently developing a health A. I. oversight plan in response to a recent executive order. So we should hear from the federal government at some point too. But the best approach will, of course, be a collaborative effort between private and public sectors.

Erica: So just super interesting to see all this coming together. And, of course, I’ll keep a close eye out for any updates. And if you do want to provide them with feedback, I’ll include all the episodes, all the links in the episode notes for you as well. And to end our new segment, on a positive note, Jackie Stang is a trauma nurse at UPMC in Pittsburgh.

Erica: She was on her way to drop off her daughter at [00:28:00] gymnastics when she saw a young runner unconscious in the middle of the road. So she immediately pulled over, and when she realized he had no pulse and wasn’t breathing, she started performing chest compressions. Her efforts totally paid off as she was able to restart his heart.

Erica: The ambulance arrived. He was swiftly transported to the hospital. And it was later revealed that he had suffered cardiac arrest. They’re assuming due to various genetic issues.

Erica: After a brief stay in the hospital, the runner, who was 19 year old Giustino Rocchini, has been able to safely return home. And thanks to a nearby neighbor, Jackie, the nurse, was actually able to connect with his mother Heather, who was obviously overwhelmed with gratitude. So just another amazing story about a nurse going above and beyond the call of duty to save someone’s life.

Erica: And that officially wraps up this week’s podcast. Thank you as [00:29:00] always for spending a few minutes of your week with us. Make sure to subscribe or leave a review on whichever platform you’re listening from. I hope you have a great day and we will see you again next week.