Hospital-ASC Partnerships & More: Key Trends in the ASC Industry
According to Mr. Lambert, there are a number of hospital-ASC transactions taking place. "ASCs are facing high costs and decreasing reimbursements. So the industry is focused on improving revenue side and they are thinking about affiliating with hospital partner who have a better negotiating power with payers," he said. Sometimes hospitals buy a majority share in a surgery center and turn it into a hospital outpatient department, but it is far more common for hospitals to enter into joint ventures with local physicians.
However, it is important to have a detailed hospital-ASC partnership agreement, with specific rules as to how care will be provided at the ASC. "Our industry is based on physicians developing ASCs themselves and this is mostly because physicians had issues with hospitals and the care that they were allowed to provide," said Mr. Lambert.
Mr. Zasa added that in New Jersey and California, where ASD Management is based, the markets are hospital-centric. However, the company has been receiving numerous calls from hospitals interested in buying into an ASC. "They find our centers are attractive, economically and from a patient perspective," he said. Physicians still retain control in the centers that have partnered with hospitals, however, because hospitals want that physician interaction.
Mr. Thomas also discusses the role of real estate in increasing the value of a surgery center as well as a physician practice. A strategy that has been successful in increasing value is co-location. "We are seeing more and more physicians growing their practices, and we try and help set them up with an operating room on site or an ASC within their building or campus," he says. "Co-location is very popular."
The industry is changing and ASCs need to identify important industry trends and navigate them. "The networks are forming and forming quickly," said Mr. Zasa in closing. "If you are not in the game, you are on the bench."
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