Operating room at Gramercy in Manhattan.

In 2002, the late Katy Chiang saw that New York needed a surgery center, and decided to take matters into her own hands. The wife of a podiatrist and a health system manager, she knew how such an organization should run, too. 

In founding Gramercy Surgery Center, Chiang became the first woman, and non-physician, to wholly own an ambulatory surgery center (ASC) in the state.

Today, Gramercy operates multi-specialty ASCs in Manhattan and Queens, with another opening on Staten Island in the new year. 

The ASC opened in a unique way that reflects the challenges and opportunities of practicing in New York, where many doctors struggle to afford ownership stakes, Jeffrey Flynn, who worked with Chiang to open the center, told ASC News. 

Flynn is the current president of the Gramercy Group and the president of New York State Association for Ambulatory Surgery Centers (NYSAASC). 

As part of the surgery center initiative, Gramercy pooled together 200 doctors, allowing the group to create a sustainable model, though the center remains about 75% non-physician owned.

What sets Gramercy apart is the way it designed the center to serve both the doctors and patients, Flynn said. By providing highly efficient operating rooms (ORs) and rapid turnover times, the center offered immense value to physicians. 

“I joked with doctors that if you’re doing multiple cases, you can either consent to the next patient, have coffee, or go to the bathroom – but not all three – because of how fast our turnover times are,” Flynn said. 

ASC News connected with Flynn to learn more about Gramercy, the ASC landscape in New York state and legislative goals industry stakeholders in the state are working toward. Highlights from the conversation are below, editing for length and clarity.

ASC News: I saw your post on LinkedIn about the backlog of cases that one of your surgeons was dealing with, and how the staff came in on a Saturday to help. It piqued my interest.

Flynn: It’s not just specific to this situation. It’s systemic here in New York – there’s a shortage of ORs in Manhattan and throughout the city. There really is a lack of ORs for elective procedures. We’re actually seeing a lot of faculty practices from hospital systems come to us because they simply can’t get OR time at the hospitals. This is partly because of facility closures – Beth Israel’s OR closure left a black hole. Many people depended on those ORs, and now they have to look for other places around New York to perform surgeries.

Elective procedures are often delayed by as much as three and a half months, and depending on the circumstance, this can be problematic. For instance, if a patient is in pain, that’s a long time to be on medication, especially opioids, which is something we need to monitor carefully.

In the case you’re referring to, it wasn’t an OR shortage; the surgeon was ill and undergoing long-term treatment. His colleagues stepped in to help maintain his practice, seeing patients and performing surgeries. However, these doctors also had their own practices to manage, so our staff, who highly respect this surgeon, pitched in to accommodate. To assist, we opened up on weekends periodically, as the flow of cases was overwhelming.

The transition of surgeries from hospitals to surgery centers, or even to OBS, is significant for the future. Inefficiencies in larger institutions can arise, especially when anesthesia is pulled for trauma or emergency cases, delaying elective surgeries. We don’t face that issue because we’re not centers for emergent care. Our schedules are set, and everything runs smoothly barring complications.

Our preparation is key – my director of nursing, for instance, is pulling cases two days in advance. We ensure all equipment is ready the day before, so the first cut is at 7 a.m. sharp. Our turnover time between cases is usually 12 to 15 minutes, and it’s no more than 20 minutes at most surgery centers. In GI or eye centers, it’s even faster as the doctors and anesthesia teams move from room to room.

How many physicians does Gramercy currently work with?

We’re a bit atypical because we work with a large number of physicians. We have doctors who perform cases every week and others who only do two cases every two years. Currently, we have about 220 surgeons credentialed. Most centers typically work with around 30 surgeons.

Just to clarify, most physicians don’t have an ownership stake?

The majority don’t. Our loyal doctors were the first to be offered ownership, but bringing in cases and following the rules is what gets you to the OR first, not ownership. We’ve always operated that way. We’re also very transparent about who owns Gramercy. We disclose that information to every employee, and doctors are required to inform patients if they have an ownership stake. Patients sign an acknowledgment list, which they can take with them, that includes the names of the owners.

How is the ASC setting different from the hospital?

We focus heavily on efficient patient care. And it’s important to note that this care isn’t limited to those with commercial insurance. We’re part of every managed Medicaid plan, and most other surgery centers are as well. There was some misinformation earlier this year suggesting that ASCs in New York City weren’t performing Medicaid diagnostic colonoscopies, but that’s absolutely false. We performed 18,000 Medicaid colonoscopies last year alone.

The benefit of surgery centers is the calmer, more dignified environment compared to hospital systems, which are often chaotic with trauma cases and emergency rooms. I’m scheduled to do 10,000 procedures this year between the two Gramercy centers, and we’ve grown significantly. 

For the first time, we have a pro-ASC governor who acknowledges our role. We’ve met with her several times, and she has toured an ambulatory surgery center. Additionally, the chair of the state health committee has had his own diagnostic colonoscopy at a surgery center in his district. We’re nimble and able to meet the growing need for care, and we’re eager to be part of every conversation about access to care.

Are there any other legislative or regulatory goals you’re working toward?

Yes, we recently passed legislation through both the Assembly and Senate unanimously, and Governor Hochul signed it into law at the end of 2023. This law established a seat on the Council for an independent surgery center, which is a big deal. During COVID, people began to realize how powerful this council is – it helped determine the governor’s emergency powers during the pandemic. Yet, until now, independent surgery centers were not represented. There’s a misconception that ASCs cherry-pick lucrative cases and leave Medicaid and Medicare to the hospitals. This is simply not true. We’re actively engaged in the Medicaid system.

Another challenge we’re working on is reducing the time it takes for newly licensed surgery centers to get their Medicaid numbers. During the pandemic, this process took between 14 and 24 months, which is outrageous. Many New Yorkers are enrolled in managed Medicaid plans, and you can’t contract with these plans without a Medicaid number. As a result, some centers have to offer charity care for two and a half to three years before they can start accepting Medicaid patients. This hurts those who need care the most. We’ve brought this issue to the attention of the governor’s office, the Senate health committee, and the health department, and we’re pushing for change. Once a surgery center is licensed, the process for receiving a Medicaid number should be streamlined.

Could you tell me a little more about your work with the Veterans Outreach Program?

We actually took this idea from what California had traditionally done. From my own local experience, when I started Gramercy, I was fortunate to have some clinical staff from the Navy and administrative staff from the Army come in and work with me. As I used to say, my clinical operations were run by the Navy, and my administrative side by the Army, and it never ran better than with those two. People with military training have a real focus and mindset of service, which is something we all strive for. These are individuals who have served our country, and we want to carry that mindset forward.

Our first event was at Fort Drum, where we participated in a transition health fair. We were the only health care entity there, and we presented the clinical and administrative job opportunities available at our centers throughout the state. For those relocating to Texas, we connected them with resources because of our relationship with the cardiac community in Texas. In fact, the executive director from Texas attended our last conference. We helped not only veterans but also their family members – many of whom were transitioning into health care roles as well. It was a great start, and we’re excited to grow this program further. 

We also take time each Veterans Day to recognize the veterans within our organization. Last year, we asked our members to send in the names of all the veterans in their teams, and it was exciting to see how many people hadn’t realized that they had veterans working alongside them. We’re committed to supporting veterans and helping them transition into civilian careers, particularly in surgery centers, where their skills can really make an impact.