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BackTable / VI / Podcast / Episode #366

Navigating OBL & ASC Business: Pitfalls to Avoid

with Teri Yates

In this episode, host Aaron Fritts is joined by Teri Yates, CEO of Accountable Physician Advisors, who offers essential guidance for successfully establishing and managing Office-Based Labs (OBLs).

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Accountable Physician Advisors

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Navigating OBL & ASC Business: Pitfalls to Avoid with Teri Yates on the BackTable VI Podcast)
Ep 366 Navigating OBL & ASC Business: Pitfalls to Avoid with Teri Yates
00:00 / 01:04

BackTable, LLC (Producer). (2023, September 18). Ep. 366 – Navigating OBL & ASC Business: Pitfalls to Avoid [Audio podcast]. Retrieved from https://www.backtable.com

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Podcast Contributors

Teri Yates discusses Navigating OBL & ASC Business: Pitfalls to Avoid on the BackTable 366 Podcast

Teri Yates

Teri Yates is the CEO of Accountable Physician Advisors.

Dr. Aaron Fritts discusses Navigating OBL & ASC Business: Pitfalls to Avoid on the BackTable 366 Podcast

Dr. Aaron Fritts

Dr. Aaron Fritts is a Co-Founder of BackTable and a practicing interventional radiologist in Dallas, Texas.

Synopsis

Teri started a consulting company after working as a quality and risk officer at a radiology practice for 18 years. As the company rapidly grew, she has worked with many different physician practices and specialities.

We start off the discussion by identifying key pitfalls that Teri sees in OBL ventures. First, it is common for physicians to conduct inadequate due diligence about referral sources, which can be a barrier to effective marketing and patient acquisition. Also, it is common for founders to lack a detailed revenue model or a plan for the business. Oftentimes, they will underestimate the capital needed to start the OBL and lack a clear idea about the types of procedures and patients they are catering towards. Another pitfall is not realizing the amount of time investment required. Teri estimates that approximately 10% of a physician's time will be needed to manage the OBL and it is important to take this into account. Finally, a common error is initially hiring individuals not qualified to be administrators, such as family members or trusted individuals.

Teri also highlights some of the major reasons physicians consult her company. These challenges often revolve around "people problems," encompassing issues related to both administrative difficulties and employee management. Staffing and retention problems, leading to a significant turnover of employees, are common concerns. She underscores the importance of addressing issues related to physicians themselves, emphasizing that partners must set the tone for the culture within a company. Patient turnover efficiency in OBLs is also a recurring issue. Teri's advice for this issue to closely follow a few patients throughout their entire visit. This will most likely uncover redundancies in the patient experience, many of which the staff might already be aware of, but hesitant to communicate to leadership.

As Teri reflects on her experiences, she notes that it typically takes 6-9 months to fully construct and operate an OBL. A comprehensive understanding of healthcare regulations in each state is crucial in the initial development stages.

Resources

Accountable Physician Advisors:
https://www.accountablephysicianadvisors.com/

Transcript Preview

[Teri Yates]
It's as easy as people are used to you being in the drop-down list for a referral in Epic, and if you are no longer part of the system, you're out, you're off the list. Understanding where your referrals are going to come to. Another thing that is very important is having an evidence-based pro forma developed. You need to not only have a very detailed revenue model created, but also really understand all of the expenses that go into running one of these, so you have a realistic projection, not only of how much money you're going to make in the long term, but how much capital you need to get the thing going in the first place. That's really important. People sometimes do undercapitalize because they may know all the things they have to buy and what those things are going to cost, but not really be thinking through how much money they have in the bank just to pay the staff until payments from insurance companies start flowing in. That's particularly risky if you overbuild and you don't start small with your practice. Now, the other thing that will really make one of these businesses struggle is if the owner does not understand and is not prepared to commit the right amount of time to running the business. You are becoming a business owner, you're running a small business.

I tell my clients, rule of thumb, you need to be willing to put in about 10% of your time, four hours a week, into managing your business, answering questions, or giving permission for projects to your staff, looking at your data, understanding your financials. That's hard because all of you like to practice medicine, and there are some physicians who enjoy the business side of things, but an awful lot of them don't. Procedures are your video game, surgeries are your video game, that's what I always say. I think, really, you have to commit in your mind that you're going to spend that time to run the business.

Disclaimer: The Materials available on BackTable.com are for informational and educational purposes only and are not a substitute for the professional judgment of a healthcare professional in diagnosing and treating patients. The opinions expressed by participants of the BackTable Podcast belong solely to the participants, and do not necessarily reflect the views of BackTable.

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