At Becker's ASC Meeting in Chicago on Oct. 23, Tom Mallon, CEO of Regent Surgical Health in Westchester, Ill., and Jeffrey Simmons, Chief Development Officer at Regent, discussed joint ventures between surgery centers and hospitals.
Here are five tips and observations from Mr. Mallon and Mr. Simmons concerning partnerships between surgery centers and hospitals.
1. The majority of surgeries are now performed in an outpatient setting, and "that creates tremendous opportunity for the ASC sector," said Mr. Simmons. The industry is stagnant on the number of new surgery centers in America. Therefore, if hospitals want to engage in joint ventures with surgery centers, it will have to be through acquisition.
2. These joint ventures can be financially beneficial for ASCs, since the payments per case in the hospital contracting model are at least 30 percent higher than independent ASCs.
3. If a surgery center does decide to partner with a hospital, Mr. Simmons said it's important to choose a hospital that doesn't require control of operations, since control of operations is the number one reason physicians go to and stay with ASCs.
4. If there are 10 surgery centers in a market, "you want to be the first to partner with a hospital because you can have a non-compete agreement," said Mr. Simmons.
5. Mr. Mallon discussed a partnership he worked on that involved Kinghtsbridge Surgery Center in Columbus, Ohio partnering with OhioHealth in Columbus. Throughout the process of the transaction, Mr. Mallon said the physicians were telling him, "don't let this thing go broke," because they wanted the deal to be successful. The partnership has turned out to be beneficial to both parties involved, and they have now been partnered for six years.
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