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BLUE CHIP CLINICAL MODEL

Focused on quality care, patient and physician satisfaction and
operational efficiency.

Blue Chip Partners’ commitment to the advancement of minimally invasive surgical techniques and procedures differentiates us from other development and management firms. The clinical model for all of our ambulatory surgery center (ASC) businesses consists of proven strategies for:

These operational standards are achieved in an outpatient surgical environment via our clinical model which is based on best practices in several key areas.

Download a .pdf of the Blue Chip Clinical Model.

Staffing: Sound staffing begins with facility administrators who possess not only the business acumen to manage a multi-million dollar enterprise, but also the skills and experience to support clinical excellence. These individuals must keep their finger on the pulse of day-to-day operations. Administrators assume full responsibility for all aspects of the surgical center. In smaller facilities (2-3 surgical suites), it may be necessary for administrators to perform in a clinical role, in addition to management functions. The ideal candidates for administrator positions are RNs who also hold MBA degrees. We expect them to be highly visible at all time and move freely and frequently in and out of ORs.

All staff is cross-trained in pre-, intra- and post-operative patient care. The majority of the clinical staff is hired on a per-diem or part-time basis, which allows the center the flexibility to adjust the person-hours budget in accordance with procedure volume. Flex-time also permits the facility to recruit desired clinical staff to support specific surgeons. Blue Chip-developed surgery centers hire only "cream of the crop" employees. The recruitment process is aided by employees’ desire to work in cutting-edge facilities, in a flexible environment with respected surgeons, and by compensation above the community standard. The financial goal is for the center’s salary, wages and benefits budget not to exceed 25% of collections.

Anesthesia: Blue Chip partnerships select only anesthesiologists who are committed to the outpatient surgery model, have deep experience with specific procedures in outpatient environments and are willing to be involved in the business. For instance, we expect anesthesiologists to participate in the medical advisory committee and with quality improvement initiatives. In return, anesthesiologists don’t have to be on call and can enjoy an almost guaranteed stream of productive hours.

Our surgeon-partners have more freedom, through the ASC, to work with anesthesiologists they like and trust. Anesthesiologists are screened by Blue Chip during the recruitment process, and the panel conducts extensive interviews. If necessary, a request for proposal (RFP) may be issued to local groups. If CRNAs are used at our facilities, their work is overseen by anesthesiologists.

Accreditation & Certification: While some development organizations view accreditation as a necessary administrative evil, Blue Chip believes it can help lay the foundation for long-term clinical and business success. Our staff helps surgery centers achieve accreditation quickly and efficiently. Beyond Medicare accreditation, we consider the imprimatur of a major agency (AAAHC, AAAASF and JCAHO) to be a requirement for long-term success. Our accreditation experts understand the nuances of each agency and the differences between states. In successfully completing the process hundreds of times, we have a 100% record in accreditation. Our model is designed to achieve accreditation at the highest level and as soon as possible after opening ASC. That's much faster the national average and represents a competitive advantage for our centers. We use detailed checklists, review templates and mock review that cover every area of concern to accrediting agencies and greatly streamline the application process for facility administrators.

During the application process, we help ASC staff build effective record-keeping and documentation processes. Blue Chip staff regularly conducts clinical, operational and financial audits and ongoing quality improvement initiatives to ensure our facilities are prepared whenever state reviewers and regulators show up.

Patient Scheduling: Creative scheduling is a key component of financial success for ASCs. Blue Chip-managed businesses use a block scheduling system, with a.m. and p.m. block times available. We aim for 85% block utilization. Physician partners have the first opportunity to choose blocks of time based on their historical procedure volumes. Any unscheduled block time is released 48 hours prior to surgery day and made available to other surgeons for semi-urgent or overflow procedures. Add-on cases are welcomed. Available surgery schedule time is communicated to all surgeons and their staff. When available, the use of two surgical suites per physician is encouraged. On a daily basis, the surgery schedule is compressed to eliminate large blocks of unused time and inefficient use of staff time, thereby eliminating unnecessary overtime. We expect all procedures to start on time.

Facility hours and days of operation are based on booked OR time, with increased procedure volume necessary to expand hours of operation. We are not afraid to turn out the lights if necessary. Procedure start times, 9-12 minute turnover times and block-time utilization statistics are closely monitored on an ongoing basis and communicated to all involved parties via the governing medical board. We believe 1,500-1,800 surgical procedures can be performed annually per OR. Procedure rooms utilized for GI endoscopy and/or pain management procedures can easily accommodate 2,500-3,500 procedures per year.

Meeting these targets for fast turnaround and high volumes requires a strong commitment to efficiency and productivity on the part of surgeons and staff. We adopt — and help our partners adopt — best practices such as team block scheduling clean-up, advance preparation and block scheduling to achieve the goals because we believe more efficient OR management results in more revenue for the business.

Physician Leadership & Governance: Leadership of the business and cultivating a culture comes from the board. Hence, physician-owners/board members are expected to attend periodic board meetings. These meetings will be well organized, focused on key clinical and business issues and as brief as possible. To encourage board meeting attendance, profit distribution checks are distributed to board members at the board meetings. They are not mailed. We expect surgeons to participate in quality improvement programs and the medical advisory committee. The role of Medical Director should rotate among the partners.

Equipment and Technology: When launching a new surgical center, Blue Chip encourages surgeons to select the "best" equipment and then negotiates attractive acquisition prices. The evaluation and procurement of capital equipment or technology (e.g., new instrumentation or electronic health records) is a Board-level decision, supported by thorough cost-benefit analysis that seeks to quantify the number of new or additional cases the new equipment will bring and the impact on reimbursement rates or importantly, the improvement of quality or patient satisfaction. After analysis and evaluation documents have been reviewed, the Board renders final determination on capital equipment purchases.

The Blue Chip business model calls for new equipment to be purchased in cash from operating income, which, in some cases, means a delay in monthly distribution checks for the partners. We believe this level of discipline and rigor is critical to the long-term success of the ASC business. Purchases of new equipment are then measured and evaluated on an ongoing basis.

Case Costing & Volume: Blue Chip believes profitable ASC businesses are built on a solid foundation of accurate case costing and volume projections. Ideally, all participating physicians in an ASC should know the cost of each and every case, and agree on clear, objective projections up front. That level of insight allows ASCs to negotiate strong contracts with both payors and suppliers and permits physicians to implement the contracts effectively, laying the groundwork for profitability.

The contracts which our surgical centers accept must reflect accurate volume estimates, but also address the right types of cases and payor mix. To identify those cases precisely, a number of factors must be taken into account, including the age and health of the patient, in-network vs. out-of-network reimbursement, and Medicare groupers and payments. Once contracts are established, cost data is carefully tracked and monitored against contracts and projections. Blue Chip staff helps our surgeon-partners and administrators negotiate these complex tasks.

Supply Standardization & Inventory Control: Blue Chip emphasizes efficient inventory management and standardization, which can be significant challenge. We incorporate just-in-time inventory ordering practices, implant consignment arrangements, participation in group purchasing organizations and thorough case costing analysis to control variable costs, optimize cash flow and ensure profitability. After careful consideration of financial and patient safety factors, as well as physician preferences, the physician-led Board of Directors establishes policies for supplies and inventory.

The Blue Chip clinical and business models are built on a disciplined approach to inventory management. We believe a little thrift goes a long way in building profitable ASCs. For instance, we don't automatically open two shavers before procedures. Usually, two shavers aren't necessary and, in the rare cases they are, it only takes a few seconds to open the back-up. It may sound like a small thing, but our surgeon-partners tell us it helps them and their staffs understand the need to control costs. They own the business, after all

Preference Cards: Because quality care comes first, staff at Blue Chip carefully and regularly reviews surgeon preference cards and works diligently to ensure the preferences are met. However, we also encourage physician cards to be adjusted — where appropriate — in line with business needs. For instance, we encourage dialogue with physicians to ensure their preferences align to our disciplined approach to supply and inventory management. (See above)

Architectural Design & Facilities Management: Blue Chip designs facilities for the comfort of patients and the convenience and productivity of staff and surgeons. We believe that the design of outpatient surgery centers should contribute to clinical excellence and beneficial outcomes for patients. Facility size ranges from 5,000 to 12,000 square feet, with typically two to four ORs. Generally, we prefer retail, consumer or patient-friendly locations.

Using best practices and experienced professionals, we manage all the details throughout the design and construction phase of the project, eliminating typical flow issues that can hinder future productivity and growth. We are careful not to overbuild and we avoid the temptation of "extras" which add little value. Blue Chip-developed ASCs fit the appearance of local communities. Neither the most expensive nor the "cheapest" facilities in town, they are designed to be attractive, comfortable, patient-friendly and functional. Our development team consults with local and state authorities early in the process, avoiding many common issues that slow construction and the launch of the business. The ability to use our resources efficiently helps us streamline the development process.

Performance Measurement: Blue Chip — developed ASCs carefully and rigorously measure clinical outcomes, including transfer rates, infection rates, discharge times, and treatment costs. We compare this data to that from hospitals and inpatient settings, as well as across the network of Blue Chip — developed ASCs and against relevant studies and industry averages. In many cases (as with outpatient spine surgeries), we are helping to define the benchmarks for ASCs.

In addition to quality and treatment outcomes, we also electronically monitor business and financial metrics of each surgical center, each day like case volume, cash on hand, processed claims, accounts receivable and accounts payable status.

Communication & Information Sharing: Blue Chip's dedicated and experienced staff regularly shares best practices, effective policies and success stories across our network of ASCs. This is one important way we provide support to all of our partnerships and to individual administrators in particular. For each center, we measure clinical outcomes (including transfer rates, infection rates and case costing) and communicate findings to our facilities and surgeon partners. Complex cervical disc fusions are challenging cases; our surgical centers freely, openly and actively exchange information and best practices – what we learn in one center quickly moves to another.

Similarly, we share relevant business information about pricing, reimbursement and other factors, as well as policy forms, charts and process templates for specific operational processes. We stay on top of shifting regulations, which allows us to update policies and forms for all of our ASC businesses in an efficient, standardized ways. We have workflow models and all required documentation for accreditation, quality improvement, facilities management and other key functions.

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