Open a surgery center

Looking for a way to exercise your entrepreneurial spirit and administration skills? Starting your own place might be the answer.

By Marcia Travelstead | Career Move | Fall 2014

 

Gregory Horner

Gregory Horner, M.D., found a way to improve his work environment and offer greater transparency to patients: Open a surgery center.

NAME: Gregory Horner, M.D., Orthopaedic Surgeon

WORK: Tri-Valley Orthopedic Specialists, Inc.; Hacienda Surgery Center in Pleasanton, Calif.

MEDICAL SCHOOL: Johns Hopkins Medical School

RESIDENCY: UCLA Medical Center Department of Orthopedics, Los Angeles

FELLOWSHIP: Tufts University School of Medicine, Boston; New England Bone and Joint Institute

Horner earned a Big Ten football scholarship and majored in biomedical engineering before heading to Johns Hopkins University School of Medicine. Residency in Los Angeles and Upper Extremity fellowships at the New England Bone and Joint Institute and Tufts followed.

He serves on the board for the California Ambulatory Surgery Association (CASA). He was later elected to serve on the national board for the Ambulatory Surgery Center Association (ASCA).

Horner acquired Pleasanton Surgery Center in 2006, which he syndicated to a group of surgeons. Under Horner’s management, it became one of the most profitable ASCs in California. The group recently sold Pleasanton Surgery Center.

Horner has subsequently cofounded multiple other centers, including Tracy and Hacienda Surgery Centers in California and others throughout the Midwest. He is now undertaking multiple ASC projects as managing partner of HealthPoint ASC Management, LLC.

How did you get involved with opening a surgery center?

There were two problems with working at the hospital. First, they simply didn’t cater to my needs. They responded to what the hospital wanted rather than the surgeons.

Secondly, the hospital, due to its inefficiency, was very expensive. My patients were facing larger financial responsibilities, so it was becoming problematic for them.

I heard that Pleasanton Surgery Center was available, so I bought it and syndicated it to a group of 15 surgeons. It has become a haven for them. The nurses and techs were handpicked and were focused on us. It became not only an incredible place to work but also incredibly efficient.

We raised the morale of surgeons and it was less than half the price of the hospital for many surgical cases our patients needed. As a result, we were able to lighten the financial responsibility on our patients. That augmented our practice.

Was that your first experience with opening a surgery center?

Yes. I bought it and basically it was “baptism by fire.” At the time I purchased it, I was also taking a bunch of business classes simultaneously while trying to run the place. I wouldn’t say learning the business was easy, but I had the skeleton to put the knowledge in from already being a surgeon.

I learned a lot about finance, particularly cash flow, cash management, revenue cycle management and purchasing cycle management. Basically, those categories were the most important for me to learn.

It was a tough five months, but after buying it, we were profitable within three months and were making substantial distributions soon thereafter.

What did you like best about opening a surgery center?

There were two things, and I can’t decide which one I liked the most. First, I got a really great feeling from the other surgeons whose lives and careers were greatly improved. Second was opening the door to reducing costs for my patients.

I still get letters all the time about how great the care is and how great my surgical facilities are. They appreciate the centers’ affordability and don’t understand why a hospital can’t match this type of quality. It makes me feel good because we have to make this system better and make health care better. It’s through affordability and transparency that we can achieve this goal. We make our costs extremely transparent so our patients know exactly what to expect.

What was the most challenging part of the process?

I wish I would have taken the time to learn a little more about finance before buying it. I really encourage entrepreneurism to any doctors coming into this new world of medicine. To that end, it is critically important that doctors learn about finance. It’s a very important topic for any practice. There are so many things to understand.

Was there anything that surprised you about opening a surgery center?

What surprised me were the lack of transparency and the high cost of health care. A patient can pay three times as much money going to a hospital. There is no way they could know there is an alternative.

I was shocked when I realized how affordable we can make health care. We still became one of the most profitable surgery centers in the state. It is only through transparency that we can foster consumerism and get patients to shop for high-quality, affordable health care.

How would a physician go about opening a surgery center?

Many turn to management companies to do it for them. That’s not necessary; they can bring in a consultant like me, for example. I’ve been working with doctors helping them get through the stages of developing and opening a surgery center. It’s a matter of taking the time to see how the business works. It’s not reinventing the wheel these days.

There are plenty of models and information available to guide physicians through the process of opening a surgery center. Especially for surgeons, it’s a really integral part of your actual practice. Without that extra income, it’s getting increasingly difficult to have a comfortable lifestyle as a surgeon.

Any other advice?

I think the other thing that might be helpful as an alternative is to go out on your own and joint venture with a local hospital. Keep in mind both quality and affordability when you approach the hospital. Although affordability is a scary word, a surgery center can still be profitable and affordable at the same time. A surgery center will help your practice and your patients, which will ultimately better your community.

By Marcia Travelstead

 

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