To navigate reimbursement requirements and improve patient access, healthcare providers are continuing to evaluate their ambulatory strategy, moving more complex procedures to the outpatient setting.
According to the Advisory Board, the fastest ambulatory surgery growth is projected in orthopedics, cardiovascular, urology, pain management and general surgery, with total knee replacements in ASCs expected to grow from their current level of 6.5% to more than 30% of procedures.1 Ambulatory care comprises a wide range of care levels, from simple injections to total joint replacements; navigating the shift in strategy to support these services and their impact on facility development can be daunting.
There are many variables to consider with market dynamics changing over time, sometimes rapidly. Let’s look at five key areas that remain relevant to ambulatory facility strategy: patient demographics and clinical service needs, location, regulatory issues, building versus renovating, and planning considerations affecting layout and flow.
1. Patient demographics and clinical service needs
Outpatient facilities development is typically driven by one or more of the following factors: payer requirements for performing certain procedures in an outpatient setting; market demand for services in an underserved area; a desire to increase market share by creating new gateways for patients to enter the system; or a desire to consolidate existing facilities to improve access and/or operational efficiency.
Many organizations have internal strategic planning capabilities, either in-house or with specialty consultants, to analyze patient data and forecast demand. They review existing primary and secondary service areas, competition within those areas, and projections of future population growth and potential changes in payer mix. New capabilities and locations may impact physician recruitment and retention as well, so provider and staff allocation should also be considered. Strategies need to include overall service line dynamics as well; the new ambulatory facility will likely be part of a larger portfolio of physical assets, each of which contribute to the overall patient care approach.
Joint ventures offer organizations the opportunity to share cost and mitigate risk. These arrangements often lead to multispecialty outpatient facilities, rather than single specialty, which changes the design and planning details. In this scenario, clinical workflows, as well as facility design standards, need to be coordinated between the various stakeholders.
Once an organization has established a general service area based on desired patients and services, many elements should be considered when evaluating specific potential sites of care. Does the organization already own property in the vicinity? Are there strategic or preferred partnerships with anyone who does? Real estate brokers can help identify undervalued sites that may be available, with the caveat that undervaluation is usually due to disadvantages such as poor access, poor soils or other encumbrances.
And it’s not just about the ZIP code. Often the quality of a particular location needs to be measured at the street level, in terms of access to turning lanes to enter the site, proximity to other businesses that attract similar customers, or visibility from major highways. Design and construction partners can help evaluate potential sites.
3. Regulatory issues
Strategic planning ideals must also confront the reality of regulatory requirements. Authorities Having Jurisdiction (AHJ) and applicable codes depend on three main criteria: level of invasiveness of procedures, level of anesthesia being used and whether patients routinely stay overnight (or more than 24 hours).
Depending on the location of the ASC, the requirements of federal, state and local AHJs play a significant role. While not every state requires licensure or a certificate of need (CON) to operate an ASC, one of the earliest decisions to make is whether the ASC will seek Medicare/Medicaid reimbursement for procedures. If it is determined that a license is not required and Medicare reimbursement will not be sought, local municipality and state requirements for facilities is where this path will likely end. However, if Medicare reimbursement is desired, the journey has just begun.
Once the organization has an approved letter of agreement with the Centers for Medicare & Medicaid Services (CMS), verified that the purpose of the facility is to provide surgical services to patients for a duration not expected to exceed 24 hours, and does not share a physical space without separation from other functions such as physician office space or another Medicare participating provider, the next step is to ensure that the Conditions for Coverage (CfCs) and State Operations Manual are followed for staffing, record keeping and physical space requirements. In addition, CMS also requires independent certification through one of its approved private affiliates that will conduct an accreditation survey in accordance with the standards each organization follows.
CMS looks to the Accreditation Association for Ambulatory Health Care (AAAHC), The Joint Commission (TJC), the American Association for Accreditation of Ambulatory Surgery Facilities, Inc. (AAAASF) and the Healthcare Facilities Accreditation Program (HFAP) to provide certification that an ASC has met the minimum health, safety and wellness requirements set forth within NFPA 101: Life Safety Code (LSC).
In addition to the code requirements found in NFPA 101, agencies rely on the use of compliance documents such as The Facility Guidelines Institute (FGI) Guidelines and Physical Environment Checklist among others to guarantee consistencies throughout facilities and their own requirements. One final choice in accreditation is that an ASC may rely on the state’s Medicare agency to provide its accreditation survey in lieu of seeking one of the private parties above. It’s important to note this is not always a viable option due to local resource limitations.
4. Building versus renovating
A new freestanding building has several advantages: the plan layout can be customized to suit its designated purpose and the preferred workflows of the clinicians; the visual design can be customized to align with brand aesthetics; and the lack of existing constraints such as structural columns, shafts, or mechanical infrastructure allows for greater functional optimization. Building typically carries a higher cost than renovating or building out a vacant interior space, since we must account for the cost of the building enclosure and site work. This is not always the case, however; hidden costs of renovation can sometimes make the cost difference between these two options negligible.
For those organizations interested in reducing their environmental footprint, adaptive reuse of an existing building is typically less resource-intensive than building. If we’ve determined that the facility does not need to be classified as an ASC, based on the considerations discussed in the previous section, locating the practice in an existing B-Occupancy (non-healthcare) facility may be quite simple and relatively inexpensive. Similarly, if we have determined that the facility does need to be classified as an ASC, but we can find a space originally designed for that purpose, renovation may be straightforward.
Lastly, if we want to locate an ASC in an existing building not originally designed for that purpose, significant code issues may arise. Despite the potential cost impact, this scenario often occurs due to the demand for procedural capacity coupled with the relative lack of conveniently located existing vacant healthcare spaces. Issues in this scenario include but are not limited to:
- ASCs must be separated from non-ASC uses by a minimum one-hour fire-rated construction. In a multistory building, this includes floors and their supporting structure. Existing retail spaces are often non-rated construction.
- Exit distance requirements are more stringent for an ASC than for non-ASC uses.
- Infrastructure requirements are more stringent than for non-ASC uses:
- HVAC: fully ducted return air systems are required in lieu of open plenums, as well as higher air change rates and percentage of outside air, which can trigger infrastructure (air-handling equipment) upgrades.
- Electrical: emergency power is required.
- Plumbing: medical gases and domestic water disinfection are required.
- IT/low voltage: nurse call system is required.
5. Planning considerations
Books have been dedicated to best practices in ambulatory surgery design; let’s take a quick look at a few of the factors that influence ASC space needs.
Anticipated procedure volumes are of course the biggest driver, since this will dictate the number of procedure rooms required. Pay attention to hours of operation and physician schedules, however; fewer rooms are required if an organization can run at a higher utilization rate (i.e., have physicians operating a higher percentage of the time with minimal room down time). Consider potential future growth, either by leaving open space on the site for future building expansion or by obtaining right of first refusal on adjacent tenant spaces in lease situations.
The approach to perioperative care is another major driver of space requirements. Health systems usually have a standardized approach to this aspect of patient care, but independent practices may not. The FGI Guidelines allow for three different arrangements of pre- and post-procedure care:
1. Combination of pre- and post-procedure patient care stations in one patient care area
2. Separate pre-procedure patient care area and post-procedure recovery area
3. Three areas: pre-procedure patient care area, Phase I post-anesthesia care unit (PACU), and Phase II recovery area.
The choice of arrangement will impact staffing models as well as spatial needs and layout.
A current trend in the healthcare industry is to provide multiple related services in a single location, in support of a continuum of care. This can benefit the patient through ease of access and having a “one-stop shop” and can benefit clinicians by allowing them to perform procedures and see clinic patients at the same location. In addition, complementary services may be provided: Orthopedic practices may include a rehab therapy component, and cardiology practices may have stress testing and diagnostic imaging co-located with procedural centers, to name just two examples.
Other design features impact space requirements as well. Providing hospitality in the form of waiting lounges and nourishment areas; enhanced separation of on-stage and off-stage areas and spacing for pandemic concerns; and providing ancillary services such as retail pharmacy and specimen collection labs, all demand square footage.
As payers and patients continue to push increasingly complex procedures to the ambulatory setting, healthcare providers will face the challenges of setting appropriate strategy, identifying suitable locations, navigating regulatory requirements, and determining whether to build new or renovate. Decisions surrounding these variables will guide planning and design of these ASC facilities. When considering your next ambulatory development, engage architecture, engineering, and construction management partners early to develop a space program and evaluate potential sites. This can allow organizations to take maximum advantage of new development opportunities.