Should you shop for a better deal?
Management companies, mergers, and other issues
By Stephen W. Earnhart, MS
Earnhart & Associates
Question: Our facility is managed by an outside management company. We pay them 9% of net collected revenue, plus they have 15% of the equity in the center. This seems high. Is it?
Answer: I cannot comment on their agreement with you since I don’t know the details. There are other firms out that that charge about half that amount and do not require equity. Maybe you should shop around for a better deal.
Question: Our hospital is about to merge with another system. They are going to turn our hospital operating rooms into only outpatient surgery suites and joint venture them with the docs that are here. It seems to make sense to us (the nursing staff). However, this place is huge, and we just don’t see how it can be done. Have you heard of such a thing before?
Answer: It’s more common that you might think. The long-term return on such a venture typically is more profitable than the current business. You are right to support the concept with your staff.
Question: I am getting burned out on the paperwork that we as nurses go through today. Is there an opportunity with your firm to be a consultant?
Answer: As a consultant, I am getting burned out on all the travel and would like to stay home at night and be with my family. (The grass is not always greener!)
Question: We are expanding our operating room here at ________ hospital. I am charged with the task of how many operating rooms we need to add. Is there any rule of thumb that I could use that would help me?
Answer: Yes. On average, inpatient surgical suites typically handle about 800 cases per operating room per year. Outpatient cases usually average between 1,200 and 1,500 cases per operating room per year.
Question: Who makes the best medical director for any operating room environment: a member of the anesthesia department or a surgeon?
Answer: I think a member of the anesthesia department has a broader picture of the needs of the department or facility. They are typically in the operating rooms daily or at least more often than the average surgeon, and they are usually considered more balanced in their treatment of the surgical staff. Often there are jealousies or friction between two surgeons when one is acting as the cop (which is often what a good medical director needs to be) in a facility. In my experience, anesthesia is generally more accepted in that role.