Major Business Challenges of Surgery Centers

The Major Business Challenges of Surgery Centers

Ambulatory Surgery Centers, or Surgery centers as they are often called for short, are “right sized” for specific outpatient surgery. In general these fast-growing centers are efficient at what they do, they provide a highly quality product (often in a very specific surgical area) and in broad terms provide excellent service to those who rely on them. But not everything in thegarden is rosy, as many of these centers are faced with an array ofbusiness problems and issues that need to be addressed so that they can be fully effective. Although these problems are many and various, the following are the major ones that almost all surgery centers are currently most worried about.

Marketing the Service
Marketing is a major factor in the success or failure of a surgery center (and particularly where it is doctor-owned). In other words, if the perception were that every surgery center was similar, the patient would then have no reason to select one over the other and it will be seen as a commodity service. Surgery center marketing strategy is therefore one prime way in which to differentiate the business not only to general practitioners and other specialist doctors, but also to the general population of customers who would be interested.

Operational Efficiency
Surgery centers have to compete with both hospitals and each other, especially as new centers emerge more and more. But fees they receive today are likely to fall as volume increases and business operational efficiency will be one major way in which profit margins can be maintained. Bur surgery centers need to be more efficient in two different respects. Firstly, they need to find ways to lower costs per unit of service, while maintaining quality of services. Secondly, they need to be administratively efficient (paperwork, billing, records etc.) and by keeping their overheads as low as possible. These efficiency changes should ideally be carried out as a result of careful strategic planning, operational audits, regular surveyed input from employees, and even by regularly using external consultants who can observe and assess the wider potential for efficiency gains.

Process Effectiveness.
Process effectiveness in a surgery center is a very broad topic because it entails thinking about the whole business and how it should ideally operate. This includes efficiently acquiring possible patients, preparing and educating patients ahead of procedures, procedural risks determination, physician selection and assignment, pre-op actions, the surgery process itself, post-op steps, patient actions after surgery, billing and collections (just to name a few). The key here is to ensure that every process is designed well in the first place with minimal waste of time and money and that it leads to a great service experience for the patient.

Customer Service
Surgery center performance is most likely to be judged by the customer and the friends and family he or she talks to after the experience. Some surgery centers already know this well and work hard to make service as good as it can be. This might include friendly and well-trained staff, fast and efficient treatment approaches and flexible and transparent financial arrangements. However, some surgery centers lag behind and need to take work harder. Particular areas of focus should be on better customer listening processes, pricing of procedures, determination of capacity to pay and billing. Doctors performing surgery are also customers and their feedback on service must also be captured.

Risk management
In theory at least surgery centers have an advantage over a hospital emergency department because they can specialize more and perform surgeries in a given area more often, making them often more efficient and effective (and thereby a better risk option). However, surgery centers have other risks that need to be assessed rigorously so that one patients’ poor experience does not threaten the surgery center’s reputation or profits.

Surgery centers have many business challenges, not the least of which is the hospitals fighting back to compete and new competitive centers opening up all the time. As a result, surgery centers are likely to face very high levels of financial pressure and they will need to respond with better-designed approaches, more efficient processes, adept financial systems and a team of people who are well-trained and capable of making good decisions on an ongoing basis. RX4 has experienced all of these challenges in many different surgery center environments and can provide considerable insight and options where the knowledge is limited or does not exist internally.

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Dr Jon Warner

Dr. Jon Warner
CEO-RX4 Group-Taking Care of the Business of Healthcare

Jon is the CEO of RX4 Group based in Los Angeles, California. He can be reached at

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