1. Spring Health Surgery Center Business Plan
Presented by Team 3
Swathi Belide, Sneha Bhakta, Shraddha Mishra, Sheila Troutz, Erica Willis

2. Our location offers both quality and convenience
Located in Northwest Houston, Spring Health Surgery Center (SHSC) is a 7,500 square foot ambulatory surgery center. The operating hours are Monday – Friday from 8 am to 5 pm.

3. SHSC offers services to clients of all ages across five different specialties
Specialties Offered:
Gastroenterology (GI)
General Surgery
Ophthalmology
Orthopedics
Pediatrics, including Ear, Nose, & Throat (ENT)

4. Upcoming MACRA legislation has caused SHSC to re-evaluate their current processes
Beginning in 2019, the staff physicians, anesthesiologist, and CRNAs are eligible for annual monetary incentives based on the quality outcomes of the services performed under the MACRA Merit-Based Incentive Payment System (MIPS).
Under MACRA, SHSC must move from their current fee-for- service reimbursement model to a value-based reimbursement system.
A thorough review, including operational and financial analyses, was conducted at the facility in order to better understand our position with MACRA compliance.

5. Operationally, SHSC has established a solid foundation for the future
Business Structure
Co-owned between the five staff physicians (40%) and Genesys Joint Venture Group (60%)
The culture at SHSC centers around client satisfaction, employee engagement, and innovation of care.
The governing body consists of the Board Chairman, two appointees from the management company, two of the staff physicians who rotate service every 18 months, and the facility administrator. They are responsible for:
Establishing SHSC’s vision and strategy
Directing financial allocations
Determining, implementing and monitoring the surgery center’s operational policies.
Providing oversight of the quality improvement program

6. Cypress Fairbanks Medical Center (IDS)
We are an integral part of the Cypress Fairbanks Medical Center health delivery system
Cypress Fairbanks Medical Center (IDS)
Office Administrator
Staff Surgeons
Anesthesiologist
CRNAs
Registered Nurses
Medical Assistants
Receptionist
Billing Clerk
Payment Clerk
Governing Board

7. We have a good understanding of the strategic framework facing our business

8. Financially, SHSC expects to profit under the MACRA guidelines
There is not a dependency upon Medicare / Medicaid reimbursement; however the Medicare-eligible % must grow to be MACRA compliant
There is opportunity to expand services in existing specialties or by adding new ones

9. Using the following assumptions, a 5-year Pro Forma was built to determine viability under MACRA
Revenue and volume is expected to grow annually by 1.1%
Beginning in 2019, conservatively estimated the MIPS bonus incentive payment using the below scale for the eligible physicians and staff:
Courtesy of Freddie Warner, VP, Government Affairs, Memorial Hermann Health System, HFMA Texas Gulf Coast Chapter, Federal & State Legislative Update: MACRA, October 21, 2016

10. The first step in determining financial viability was to build the revenue projections and estimated MIPS payments

11. Next, a complete review of the operating expenses was performed

12. Non-operating expenses were also considered

13. Finally, business ratios were reviewed to analyze the financial health of SHSC

14. The future looks very promising for Spring Health Surgery Center
To be successful under MACRA, SHSC, as an ambulatory surgery center, will focus on the following MIPS categories:
Quality
Clinical Practice Improvement
Solution – Ensure physician engagement by Board rotation assignments and monthly revenue / quality dashboard.
Cost/Resource Use
While SHSC does not have to address EHR usage, we recognize the value of integrating our EHR with our IDS, Cypress Fairbanks Medical Center to drive better patient and quality health outcomes.

15. In order to be completely successful under MACRA, a fully integrated EHR is required
Proposed Solution for Approval
Request $618,000 in Year 1 as an initial investment for IT support to integrate SHSC’s EHR with our IDS, Cypress Fairbanks Medical Center.
The IT support cost will increase incrementally year over year in relation to the increase in case volume.
Note – any negative impacts to profitability as a result of the move to value-based reimbursement or increased competition in the region can be offset by expanding service specialties or service days / hours.
Year Year Year Year Year 5

16. QUESTION & ANSWER SESSION