3 partnerships every ASC should explore

Andrew Hayek, president and CEO of Surgical Care Affiliates, shared five market forces shaping the ambulatory surgery center industry at the Becker's ASC 21st Annual Meeting in Chicago on October 24th.

While each of the five bring challenges with them, they also present opportunities for ASCs willing to partner with other organizations, said Mr. Hayek.

• Medicare stability and exchange plan growth. Medicare reimbursements are expected to remain relatively flat, and as enrollment in health exchange plans grows, ASCs will face additional reimbursement pressure, since exchange-based plans generally pay lower reimbursement rates than traditional plans. 
  
  
• Hospital and physician group consolidation. As hospitals and physician groups increasingly merge, the result is fewer independent physicians to buy-in to surgery centers and fewer physicians who are able to easily refer outside their health system network.
  
  
• Referral patterns changing. Physician employment is impacting referral patterns, as are the efforts of payers and some providers to influence referrals. Increasingly, payers are offering incentives to providers for referrals to the lowest-cost, highest-quality setting. 
  
  
• Reimbursement pressure. Low reimbursement growth continues from both public and private payers. 
  
  
• Narrow networks and risk models. Narrow networks and risk-based models will additionally put pressure on providers and payers to move cases to the most cost-effective setting or facility.

"The velocity of change is increasing," said Mr. Hayek. As a result, "strategic partnerships are becoming more important."

Mr. Hayek urged centers to consider three types of partnerships and to select them based on their own unique market characteristics. 

• Provider partnerships. Texas Health Resources, a 25-hospital system in Dallas/Forth Worth, is an example of a health system acquiring and aligning with physician groups to achieve vertical integration. SCA partnered with the system to help it develop surgery centers for its surgeons. The surgery centers allow the health system to offer a lower-cost site of care to employers and patients, which will become critical as narrow networks grow.
  
  
• Payer partnerships. "We're beginning to see a change in attitude" as insurers get pressure from employers to come up with new solutions to stem premium growth, explained Mr. Hayek. And, some insurers are beginning to partner with surgery centers because of the lower-cost site of care they offer. For example, a Midwest Blue Cross Blue Shield plan and a major employer have agreed to pay surgeons a higher professional fee for performing surgeries in SCA centers, since they are a lower-cost site of care than a hospital.
  
  
• Medical group partnerships. Don't rule out partnerships with physician groups, especially those taking on financial risk for their patients' care. SCA is currently working to finalize a partnership with a large medical group in Orange County, Calif., that been taking on risk for 20 years. SCA hopes to accept a fixed payment per month for managing surgery for the group's surgical patients.