AMARILLO, TEXAS - For a textbook case of how not to run a surgery center, let me take you back to December 1998. I had just been named administrator of a surgical facility that was about to change names for the fourth time and ownership for the third time in the span of five years. Not that anyone much cared or noticed. There were two tertiary hospitals serving this town (population 215,000). And the surgery center had earned a well-deserved Brand X reputation, physicians and the community alike viewing us with great disdain.

My task: Make Northwest Texas Surgery Center succeed where Health South Surgery Center, Amarillo Surgery Center and Amarillo Surgical Center had failed at the same address. Infuse this four-bed overnight facility with five operating suites with a sense of order and purpose, not to mention surgeons and patients.

	FACILITY: Northwest Texas Surgery Center, Amarillo, Texas WEB: writeOutLink("www.nwtexassurgerycenter.com","1","sb") IN SHORT: A surgical hospital shook off years of false starts and misguided decisions by undoing The Three Deadly Sins of outpatient surgery - lack of managed care contracts, lack of high-end reimbursement procedures and lack of qualified staff.

The Three Deadly Sins
Reversing our fortunes was easier than you might think. All I had to do was undo The Three Deadly Sins of outpatient surgery:

• Lack of managed care contracts. The prior owner's payer group was all wrong. No managed care lives came to the facility, only Medicare, Medicaid and workers' compensation cases. Remarkably, the prior owner was not in any of the local health plans. The two local hospitals wouldn't let managed care lives come to the surgical hospital.
• Lack of high-end reimbursement procedures. The facility I inherited had fallen into the old trap of doing ophthalmology and pain management cases, and very basic, low-risk surgeries. In large part because not enough multispecialty physicians participated in the facility, orthopedic, GI and general surgery cases were missing entirely.
• Lack of qualified staff. The caliber of the business staff was pedestrian. Experienced, tenured surgical nurses were few and far between. And surgeons had little reason to bring their cases to us.

My three biggest pieces of advice to you: You had better be a part of one or more of the managed care plans in your community. You had better be a multi-specialty facility. And you had better be willing to pay top salaries to attract top administrative and surgical nursing talent.

Then and Now: She's Seen the Highs and Lows I have a unique perspective on the ambulatory surgery center that floundered in 1993 and the surgical hospital that flourished in 1998. You see, I've worked at both the Amarillo Surgical Center and the Northwest Texas Surgery Center. Besides me, about the only thing these two places have in common is the same address. To say that conditions were far from ideal at the Amarillo Surgical Center would be putting it mildly. I remember that we were instructed to order hard stretchers instead of recovery room stretchers. "Just put a pillow under their feet," we were told. We were all set to do our first cases when we discovered that somebody had forgotten to order suction tips. After 18 months, we couldn't pay staff salaries and our bills. Fast forward to 1998. After a few career stops along the way for me, I was given the chance to finish what I started when the Northwest Texas Surgery Center named me director of nursing. With the physician investors and corporate support, we had the money to buy the best equipment and offer our staff great benefits. Sixty-five physicians perform their cases at our surgical hospital. We have 30 RNs, LPNs, techs and aides, and seven front-office staff. We're able to pay out quarterly dividends to our physician-investors, as well as yearly bonuses and merit increases to our staff. I'm 58 now, and hope to retire in four more years. I'm thankful that I was able to witness and participate in what has been an amazing turnaround.

A fair advantage
Universal Health Services, which owns 60 percent of Northwest Texas Surgery Center, also owns Northwest Texas Healthcare System, a landlocked tertiary hospital located just 8 minutes from the surgery center. The win-win situation in having a sister hospital in the same city is to move less critical cases from the hospital over to the surgery center and to let the hospital attract more complex cases.

We're an investor-owned surgical hospital (40 percent), with 15 investor-physicians representing every specialty we offer. You'll get a better buy-in if your investors are the ones brining the cases. Before we came on board, the center was performing less than 1,000 cases per year. We're averaging 4,800 procedures per year and doing so with great efficiency. We netted $770,000 in 2001 and $1.25 million in 2002 - a 25- to 28-percent profit margin.

In terms of billing, we take full advantage of our status as a surgical hospital, which lets us do - and get reimbursed for - more procedures, particularly those requiring overnight stays. But just because we are certified as a four-bed general hospital doesn't mean we have to act like one. We minimize overnight stays by limiting the kinds of cases that force patients to spend the night; less than 1 percent of our patients stay overnight. Overnight stays are not profitable from a reimbursement standpoint. Salary costs alone can erode the profit margin. Likewise, we did not invest in MRIs or CAT scans. We have portable X-rays and a CLIA-waived laboratory. We send patients who require advanced testing to our sister hospital.