Company News

Ambulatory surgery centers are not just the future; they are the present. More than 50 percent of all ambulatory surgeries are currently performed in ambulatory surgery centers. The growing gap between outpatient surgeries in a hospital setting and in an ASC will not abate in the foreseeable future due largely to cost factors. Insurance companies believe they can reduce costs in half or more simply by moving surgeries from a hospital to an ASC—the same surgery done in an ASC as a hospital can cost up to 75 percent less. Patients generally prefer the convenience of not having to navigate a hospital campus and being among a much more unhealthy population. Many ASCs offer a specialty focus, providing greater efficiencies for the surgeon. Additionally, surgeons can be investors in ASCs allowing them to capture a portion of the facility fee on top of their professional fee. 

The growth in outpatient surgeries (projected to grow 25 percent over the next 10 years) coupled with the movement of surgeries out of the hospital means that the development of new outpatient surgery centers will continue for the foreseeable future. Just in the past three years, Davis has worked with its clients to develop six ambulatory surgery centers across the Twin Cities. These have included both single-specialty surgery centers and multi-specialty surgery centers. The common denominator has been a desire to develop a state-of-the-art surgery center in suburban locations that are readily accessible and highly visible.

The recently completed Eagan Specialty Center in Eagan is a compelling case study. The surgery center is a joint venture between Midwest ENT and St. Paul Eye Clinic. Having reached capacity at its Woodbury ASC, the two specialty practices explored expanding in Woodbury, developing a new surgery center to accommodate both practices and disbanding the partnership with one practice taking the Woodbury location and the other developing a new surgery center. The partners ultimately decided to develop a second surgery center in partnership because it afforded the greatest opportunity for growth and profitability.

Davis worked with Midwest Surgery Center to identify patient travel patterns, market demographics and competitor locations.  As with all real estate assignments, Davis first identified the ideal ASC location (in contrast to first identifying available options). Eagan offered the preferred demographics and best complimented the Woodbury Surgery Center and the two partner clinic locations. With a focus on Eagan, Davis secured a site that had the requisite visibility and accessibility to the major regional arteries (Davis had to negotiate access easements with the adjacent property owner and the county—these challenges had kept other developers from pursuing the property).

To ensure seamless integration, Midwest Surgery Center enlisted in-house Synergy Architectural Studio for the design of both the shell building and interior ASC. This comprehensive approach allowed the building shell to align with the ASC’s requirements, emphasizing the significance of strategic planning and collaboration in the successful development of a state-of-the-art surgery center.