How NSC helped a hospital convert its ASC into a joint venture with physicians

"Our partnership with National Surgical Care made transforming our ambulatory surgery center from hospital ownership to a free-standing joint venture easier. NSC’s responsiveness and knowledge is impressive."
Dr. Bill Goglin, Medical Director of Gateway Surgery Center

The Project
NorthEast Medical Center, a 457-bed regional community hospital in Concord, North Carolina, turned to National Surgical Care to transform its ambulatory surgery center into a joint venture with community physicians. NSC simplified the complex process of syndicating ownership and transitioning internal systems from those used by a hospital outpatient department to a free-standing joint venture facility. Renamed Gateway Surgery Center, the center remained open throughout the transition and the hospital maintained its not-for-profit status.

The Center
Located one mile from the hospital, Gateway Surgery Center is a multi-specialty center offering ENT, general surgery, ophthalmology, dental, plastics, orthopedics and GI. More than 50 surgeons and anesthesiologists utilize the 26,000 square-foot facility, which has four operating rooms and two procedure rooms – plus space to accommodate two more rooms. The hospital’s award-winning reputation combined with the community’s population growth helps draw physicians to the center.

The Structure
Converting a center from hospital ownership to a free-standing joint venture in a certificate of need state presents more challenges than building a de novo center. NSC negotiated agreements between the partnering physicians and the hospital, navigated the governmental maze of licensure and certification, transitioned the center’s staff and created new payor contracts. By replacing hospital-designed systems and programs with ones tailored specifically for a surgery center’s needs, NSC made the center more efficient and less complex.

The Recommendations
National Surgical Care delivered a solution that gave the physicians governing power, but did not compromise the hospital’s not-for-profit status. NSC recommended an organizational structure with the hospital and the physicians having equal ownership positions and with NSC as a minority partner and day-to-day manager. Board membership consists of four physician members, two hospital representatives and one NSC member. Reserve powers were created to protect the hospital’s not-for-profit status.

The Outcome
National Surgical Care completed the project on budget with additional credit available. The hospital, which has since been acquired by Carolinas Health System, was able to maintain its not-for-profit status. The syndication was over-subscribed by 200% and a new service line was added. State licensure and Medicare certifications were acquired in January 2006 with no deficiencies and the center is now treating over 35 patients a day. The return on investment for both the hospital and the physician partners has exceeded expectations.