Today’s blog post comes from an inquisitive reader, who not only wanted more information about Ortmann Healthcare Consultants, but also about Ambulatory Surgery Center Developers in general. Since selecting a development consultant can be one of the most important steps in planning an ambulatory surgery center, I thought it might be beneficial to share his questions, and our answers, with you.
What is an Ambulatory Surgery Center (ASC) developer?
When most people hear the term ASC developer, they immediately think of real estate developers, and automatically rush to the conclusion that an ASC developer simply finds the real estate or property where an ASC might be constructed. An ASC developer is a firm or a person who works with physicians, hospitals, or joint ventures between physicians and hospitals to manage and lead the full development of an ambulatory surgery center from the time a financial feasibility analysis is conducted through the time the new center is in operation. This process consists of well over six hundred discreet steps.
What does a full-service ASC developer do?
Major functions of a developer include:
- Perform financial feasibility analysis
- Assist in development of legal documents
- Helps locate real estate for the new center
- Assists in selection of development team members, such as the architect, attorney, general contractor, and interior designer
- Reviews Architectural Plans and plays key role in the design of the ASC
- Ensures compliance with all city, state, and federal regulations
- Assists in selection and training of center director/administrator and staff
- Provides “Core Materials” (e.g. Governing Body Bylaws, Policy and Procedure Manual, Quality Improvement program, Infection Control program) and much more
- Assists in completing and submitting all required State and Federal applications such as Medicare application (CMS855), State Licensure application, DEA application, CLIA application, NPI application
- Establishes equipment, supply and drug group purchasing agreements
- Sets up all insurance coverage for center including the set up of Human Resources program
- Works with financial institutions and obtains loans to finance center
- Negotiates managed care contracts
- Provide management services as negotiated
However, the most important role of the developer is to utilize their knowledge and experience to advise the client on all of the subjects previously listed so that good resource decisions are made and the center is financially successful. The developer is also a problem solver and serves to explore and solve any problems associated with developing the center.
How much will I have to pay a developer?
A full service developer will charge you between $150,000 and $200,000, or upwards depending on number of specialties, etc., to develop a center. Usually this amount is spread over the life of the project. The total amount could be saved by opening the center two months early or by negotiations regarding building costs. Equity firms will insist on owning as much as 51% of a center. However, they will have to be paid based on this amount or more every year; whereas a developer is paid only once.
