Interventional News: Office Renovations
By Beth W. Orenstein
Radiology Today  
Vol. 24 No. 8 P. 6 

As reimbursements continue to decline and more medical practices consolidate, radiology groups are looking for more profitable alternatives to practicing in hospital-based settings. One such alternative for interventional radiologists is setting up their own office-based labs (OBLs).

Gerald Niedzwiecki, MD, an interventional radiologist, opened an OBL, Advanced Imaging and Interventional Institute, in the Tampa Bay area in late 2005. It was one of the first OBLs in the country. “And I had to do a lot of work on my own,” Niedzwiecki says. Today, he says, the sector has moved much further along, “and there are consultants who can help you if you are interested but not in doing it on your own.”

In addition, Niedzwiecki, one of a group of panelists on OBLs at the SIR 2023 annual meeting, says there are now companies that offer customized solutions for independent ownership labs. They offer help “from soup to nuts,” he says. For example, Niedzwiecki says Philips Symphony Suite offers not only highly specialized equipment but also the devices the practice would need to launch and grow its business, including imaging systems, patient diagnostic monitoring equipment, and other hardware. Symphony Suite also offers ongoing operational support so that physicians can concentrate on their patients’ needs. It’s even possible, Niedzwiecki says, that a hospital will partner with interventional radiologists and open OBLs with them.

Niedzwiecki believes that an OBL is beneficial for both patients and physicians. “It’s really a match made in heaven,” he says. Patients like it because “it’s not an imposing site.” They feel more secure going to an OBL for their care than walking into a large hospital and not knowing where to go and what to do, he says. An OBL is a “smaller facility with ample parking. It’s a very nice, homey, and inviting suite for patients to receive health care.” Costs to the patient at an OBL are likely much lower than at a hospital, he adds.

For physicians, Niedzwiecki says, one of the biggest advantages is “being in charge.” Also, he says, “Your staff is in lockstep with you.” Working as an interventional radiologist in a hospital, “You’re one of many doctors who provide care.” The nurses and other staff “you work with are not employed by you, and so they don’t have the same level of commitment to you.” For example, in a hospital setting, when a patient needs a procedure unexpectedly, it can be difficult to fit them into the schedule. At his OBL, Niedzwiecki says, “You can find ways to get the patient in sooner rather than later. You can look at the schedule and arrange a spot because you need to get this patient taken care of.”

Pros and Cons
However, opening an OBL is not for everyone. “It is a highly individual and personal decision,” Niedzwiecki says. The number one attribute physicians need, in his opinion, is an “entrepreneurial spirit.” Also, he says, it’s not for those who want to work 9 to 5 and take vacations regularly. You can’t be risk averse, he adds. “You have to be willing to roll up your sleeves and to be self-sufficient.”

Niedzwiecki estimates start-up costs are around $2 million. “You can expect some lean months, especially early on,” he says. However, “Once you establish a reputation and a referral pattern, you become profitable.” He estimates it takes most OBLs six to 12 months to establish themselves.

Not every patient is ideally treated at an OBL vs hospital, Niedzwiecki says. He assesses his patients on a case-by-case basis. “I do procedures in the office and in the hospital, as needed.”

Another panelist was Janet Dees, CEO of American Vascular Associates in Palm Harbor, Florida. American Vascular Partners owns and operates 20 OBLs in 10 states and cardiovascular ambulatory surgical centers and has been in business since 2008. Dees offers a few key points for opening a successful OBL: Have clearance and knowledge of your state and local restrictions and Medical Board restrictions and requirements. Some states have zoning restrictions, as well.

• Have knowledge of the competition when choosing a location. Also, choose a location that has convenient access for patients. First-floor locations are preferred.
• Have a business plan and net worth statements to qualify for loans and leases. You will be required to guarantee these notes. If you choose to have partners, it will be pro rata. Business partnerships with management companies and private equity firms can be evaluated if assistance is needed in equity or nonequity roles. Screening companies for experience and reputation is key.
• Hire a good team of experienced professionals. Your team should include those who can help with legal, architectural, banking, and management aspects of the practice.
• Have a proforma and budget which is realistic and forward thinking, as several factors play into the success of the facility, both financially and professionally. (Dees’ estimate of start-up costs is a little lower than Niedzwiecki’s. She estimates about $1.5 million).
• Be sure you and any other provider doing procedures in your center are credentialed for the services you are offering.
• Hire experienced and expert managed care contractors to represent and negotiate on your behalf. Ideally, you want to negotiate favorable contracts with Medicare, Medicare Advantage, and private payers prior to opening or soon thereafter, or you will not be paid for your services.
• Negotiate and stock medical supplies and contracts. These expenses comprise a high percentage of the OBL overhead expenses.
• Hire a clinical team that has experience in the OBL space or who can transition confidently to an outpatient setting and is entrepreneurial.
• Have an EHR that is designed for IR and interventional procedures in an OBL setting, is affordable, and can interface with your billing system, coders, and billers.
• Have a marketing plan and strategy.

“This is not a build it and they will come; it has to be purposely planned and built,” Dees says.

Dees says leaving a hospital to set up an OBL does not guarantee referrals. “Due to hospital controls and other factors, it’s important to know your competition and referral sources and nurture them,” she says.

Like Niedzweicki, Dees says patient selection is critical and “should be appropriate to the place of service.”

Niedzweicki and Dees see growth of OBLs in the future. Over the past few years, CMS and Medicaid have moved for more interventional procedures to be done out of the hospital setting, including for peripheral artery disease, uterine fibroid embolization, prostate artery embolization, and geniculate artery embolization, Dees says. The work is there, she says. Niedzweicki agrees: “Interventional radiology is very well positioned to do well in OBL settings.” 

— Beth W. Orenstein of Northampton, Pennsylvania, is a freelance medical writer and regular contributor to Radiology Today.