Demand for ambulatory surgery centers (ASC)—healthcare centers that provide same-day surgical care, including diagnostic and preventive procedures—has surged in the wake of the pandemic.
One local doctor has a plan to capitalize on that growth through a new business model that focuses on spine-related procedures.
Dr. Robert Bray, who founded the Disc Surgery Center in Newport Beach in 2010, is planning to expand throughout California as a newly formed parent company, Trias Global LLC.
His model received a vote of confidence earlier this year when Chicago Pacific Founders, a private equity firm focused on healthcare investments that “can result in differentiated outcomes,” acquired a majority stake in Trias in January. Details such as price were not released.
“In creating this growth partnership with Trias Global, we knew we were tapping the right opportunity in musculoskeletal care for a model that transforms the industry in terms of efficiency and cost optimization while delivering superior patient outcomes,” Vance Vanier, co-founder and managing partner of CPF, said in a statement. “We look forward to working with Disc to expand their services and bring their patient-centric care model to new geographies.”
The Disc Surgery Center uses advanced arthroscopic techniques that deliver savings of more than 50% on the total cost of care, Chicago Pacific said on its website.
Bray, a neurological spine surgeon who founded Cedars-Sinai’s Institute for Spinal Disorders, recognized that spinal procedures often required lengthy hospital stays. He set out to develop the techniques, tools and protocols to make minimally invasive, spine surgery more cost-effective at outpatient centers that don’t require overnight stays rather than in traditional hospitals.
“The model we were delivering medicine under was wrong,” Bray told the Business Journal. “The fee-for-service world led to limiting care for patients, and it was clear we needed a new business model.”
In 2006, he began his first outpatient center in Marina del Rey; he sold that center in 2020 to Hoag Orthopedic Institute.
Disc Newport Beach has served as a testing ground of sorts for Bray’s business model that combines niche, quality care with a new insurance payment model that bundles payments and simplifies the billing process for patients, doctors and insurance firms.
“It’s higher quality outcomes for high acuity cases, with a single price for the entire care package that’s sold at a discounted value to insurance companies,” Bray said. “It’s a win-win for everyone involved.”
That focus on quality has paid off—Disc has had no infections or hospital transfers during its 16 years in operation, Bray said. He estimated that his outpatient centers have operated on 15,000 patients.
Local, LA Expansion
Disc refers to itself as the largest spine program in Southern California, and that footprint is only growing.
The company is more than doubling its local medical facility with 12,744 additional square feet at its Newport Beach base at 3501 Jamboree Road, in the same building as the local office of CBRE Group Inc. at the Bayview Corporate Center. The expansion includes two new operating rooms, a new clinic and administration space.
The company is also marking its return to Los Angeles, recently kicking off construction on a new 16,500-square-foot ASC in Marina del Rey to open in early 2023.
Its new growth partnership via Trias will allow Disc to expand its ASC business model into other locations in California and across the country, with the goal of turning the company into one of the largest spine ASCs on the West Coast.
Disc’s ambitious growth plans come in the wake of the pandemic, during which the company nearly doubled its revenue as a result of more patients turning to ASCs as a safer option than traditional hospitals or surgery centers.
“We essentially ran a lockdown operation in which we tested every individual who came into our facility, and we never had a case transmitted,” Bray said.
Trias and Chicago Pacific seek to expand Disc’s data-driven model for spine surgery into the outpatient setting with the launch of new facilities via acquisitions and development opportunities. It’s also considering mergers with hospital chains to launch and manage new ASC operations.
Former UnitedHealth Group Inc. (NYSE: UNH) executive James Becker has been named CEO of Trias as part of the acquisition.
“Having come from the payor side, I’m excited to align incentives across healthcare to deliver a better-quality experience at a lower cost with an efficiency that benefits the patient, provider and payor alike,” Becker said.