Florida-based Coastal Orthopedics was nominated Best Ambulatory Surgery Center by U.S. News & World Report, shortly after the team made the decision to expand in a new location. 

Relocated to its current location in 2022, Coastal Orthopedics’ 88,000-square-foot Bradenton headquarters is equipped with same-day surgery technology clinical services, physical therapy, administrative offices and MRI facilities, out of which 16 orthopedic specialists operate.

Dr. Arthur Valadie, chief physician with Coastal Orthopedics, said that multiple aspects came together to accommodate the move. 

“There’s the rapid growth of the movement of higher-acuity cases into the ambulatory surgery center setting, which was accelerated by COVID, and those two factors came together for us to need to expand our footprint to accommodate not just the volume of cases based on the growth in the area, but also the expansion of the types of cases we would do,” Dr. Valadie told ASC News. “We had thought about expanding our footprint in our prior surgery centers, but we felt that a fresh start in a new building was going to be the best way to do that.”

Valadie said the Coastal Orthopedics team also wanted to control their own real estate. 

“I think there’s a renewed interest in real estate ownership by physicians, not just for the financial aspect of it, but also the control aspect of it, so that you can control the use and the activities without a third party getting in the way of that,” he said. 

Ambulatory Surgery Center News caught up with Valadie to talk about Coastal Orthopedics’ plans for growth and expansion. 

This interview has been edited for length and clarity. 

ASC News: Could you talk about some of the growth and expansion plans for Coastal Orthopedics?

Dr. Valadie: Our plan is to continue to grow to meet the needs of our community. So, you know, we believe in our model of an independent physician practice providing high-quality, high-value health care in an innovative way, and we feel like all of our responsibilities provide that care for our community. So, as our community grows, and we’re fortunate to live in a high-growth area of the country, our goal is to continue to grow to meet those needs of our community and the surrounding community.

What are some of the practices that earned you that accolade from U.S. News & World Report?

When we look at the way we handle our surgeries from an operational standpoint and clinical standpoint, we get together as physicians, and we agree on the best clinical practices in an evidence-based manner, and then we standardize those activities and clinical protocols across the organization.

We have a Coastal Orthopedics joint replacement protocol, and then we agree to standardize those, which improves efficiencies, improves outcomes and limits variability. So that’s one.

Secondly, an effective and efficient decision-making process allows us to evolve those protocols and clinical practices in a non-bureaucratic manner. So, for example, if there’s a new technology, medication, or a new pharmaceutical or implant that we think is going to improve our care for our patients and our business model, we don’t have a bureaucratic model of 15 committees that you’re running through. We have an efficient, non-bureaucratic decision-making process that allows us to just implement that.

Could you talk about any technological advancements or innovations that you’ve already implemented in your facilities?

We’ve already implemented robotic technology for joint replacement. I think that’s a growing trend. I think it’s probably the future, so we’ve already brought that on board, and we’re probably going to expand that capability.

There’s pretty rapid progression in technology around spine surgery, in terms of minimally invasive surgeries, fusion technologies and implants, and so we’re expanding those capabilities. We’re doing some fairly complex, minimally invasive spine surgery in the surgery center that is important.

I think spine surgery is really on the cusp of a technology revolution that’s going to really grow indications and improve outcomes. We’re adding a digital, text-friendly patient communication tool for monitoring postoperative pain so that we can get pain scores and feedback on a more patient-friendly technology platform. And then, in the long run, when we built our center, we built it to be able to accommodate an overnight or 23-hour stay. We haven’t implemented that, but as higher-acuity cases move into the ambulatory surgery center setting, that may be a capability we want, so we built that into the center from an infrastructure standpoint, so that we’re able to do that if and when the time comes.

Tell me about some of the specific kinds of procedures that you perform in the ASC setting – spinal procedures?

We do a variety of spinal procedures, so kind of from top to bottom. We commonly do cervical spine fusion, so anterior cervical spine discectomy and fusion. That’s a super common procedure that we do. We expanded that from one level to two levels, and we’ve done a few three-level procedures, cervical disc replacement. We also do standard lumbar decompression surgery, all the way through to some of the minimally invasive interbody lumbar fusion techniques. 

How do you monitor patient outcomes?

We monitor patient satisfaction. We monitor complications and hospital transfers. We monitor how we’re doing with postoperative pain. And so if you have a non-bureaucratic change process, and you’re monitoring these things, see a trend, you can rapidly change it. So I think monitoring is one thing, and then being able to change what you do based on those findings, I think, is important.

We talked about technology. You asked, what are the challenges of coordinating care across various services such as surgery, PT and diagnostic imaging? That’s where an integrated, independent practice has some advantages. We have an integrated technology platform between the practice and the surgery center so that any of the caregivers can look at the clinical documentation. They can look at the imaging findings. They can look at the surgical findings and postoperative care. As an example, let’s say I do a rotator cuff repair. So, all of my preoperative clinical documentation is visible to my surgery center team when they go to interview the patient, to make sure they’re clinically appropriate.

Any challenges with these procedures being in an outpatient setting?

I think of that in a couple of different categories. There are clinical challenges. So, you know, as we move these higher-acuity cases into the surgery center, the patients are more complicated, and the procedures are more complicated. So we have to make sure that we maintain our focus on safety and appropriateness.

We’ve got to pick the right patients. We’ve got to stay within our capabilities. So again, we have to make sure we’re doing what’s right clinically.

There are business challenges as well. As these cases move to the outpatient setting, there’s business opportunity, but there’s business challenges, right? So these more complex cases are going to be higher cost, right? The implants are expensive, the technology is expensive, and we have, you know, reimbursement challenges around that. And so there are both opportunities and challenges from a business standpoint, from moving these patients into that setting.

Could you go into more specifics on what some of the challenges are with reimbursement?

If you think about the way that health care is, the reimbursements are fairly fixed. There aren’t adjustments to our contracts with payers on a regular basis. Medicare tends to cut reimbursement over time rather than add to reimbursement. And so we’re in a fixed or declining reimbursement environment while costs are going up in the current inflationary spiral.

So we have dramatic wage escalation, which is significant. We have our vendors. They’re caught up in the inflationary spiral as well, so they’re raising prices. Costs are going up, and we can’t raise our prices.

If I have to do a 30% increase in my staffing costs, I can’t make that up by charging more for surgery because our reimbursement is fixed. And so I would say that’s a huge challenge.

And then the other challenge, which is related, is the current labor market challenges. Simply being able to find, recruit and retain enough people is a huge challenge.

What about staffing for an ambulatory care setting? Can you elaborate on that point?

I think there are a lot of things about the surgery center that give us advantages in the marketplace in terms of recruiting people. We have fairly fixed hours, right? We don’t have nights or weekends or holidays. So for a pre-op nurse or someone in the OR that doesn’t want to take night calls, they don’t want to work weekends and work holidays or nights, we have a very predictable schedule, and so I think that’s an advantage. But we also, because of those financial challenges we talked about, struggle to pay as much as the hospital does, or that a travel nursing company can pay. And so, while we have some advantages in terms of predictability and a controllable environment and the way we treat our people and things we do for them, those are all advantages, but there are still hospitals and staffing companies that have more money to play with, and so it’s sometimes challenging to compete with.

Do you think that there’ll be a shift in that in the next five years?

I don’t know what the shift is going to be. You can’t just produce more providers overnight. You could produce a different kind of provider. Maybe you could produce a lower-cost provider, like, say, an anesthesia assistant. I know people are looking at that, so you could further commoditize their services. But yeah, I don’t know what the fix is, to be honest with you.

 Are there any specific plans for expansion that you can share with me?

Our philosophy on growth is we would grow where growth makes sense, not grow just to grow. And that’s a big question.

You know, how big is big enough to stay independent? And I think it depends on the market you’re in. And so our plans for growth are to grow where it’s smart and makes sense from a financial and strategic standpoint.

We know our business and our practice well. If we see that we’re getting close to outgrowing our capacity, then we’ll expand. We would most likely expand in a new location. And where we would do that, and how big that would be, would really depend on where we see growth geographically. How much growth is it? How big would we do it? Would we do it by ourselves, or would we do it with a partner in a certain market? It just kind of depends.

We moved into our center about two years ago, and so we built capacity for growth, which is hard to do. How do you decide how big you’re going to build something so that you have a location that’s relevant for a number of years? You have to try to predict growth, which isn’t easy, but we think we did a pretty good job of that. So we can handle another few years here, and then when we know our business well enough, when we see that we’re going to be tapping out that volume, then we’ll grow and expand, most likely in another location.