Why Less is More: Embracing the Niche Network Model of Joint Venture ASCs
At the 19th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 26, Nathan Van Genderen, CFO of Sentara Northern Virginia Medical Center in Woodbridge, and Chris Bishop, senior vice president of business development and acquisitions at Blue Chip Surgical Center Partners, talked about how this "niche network" model has benefited their service area and organizations.
Mr. Van Genderen said his hospital is part of Sentara Healthcare, which is a 10-hospital system with a wide network of ASCs, clinics and other healthcare units. Sentara Northern Virginia Medical Center was seeking out a partner to expand its medical staff, and it joined forces with Blue Chip to start a niche network of joint venture ASCs.
Mr. Van Genderen explained the best thing hospitals can do if they pursue this strategy is to be honest with physicians on what the agendas are. The hospital wants facility coverage, bigger market share, long-term viability of critical programs and a clinical, strategic and economic model to shift toward a more outpatient-based environment. Although it seems questionable to move into a lower-reimbursed setting, he explained the benefits actually outweigh the negatives.
"There is less reimbursement in the ASC setting, but the profit potential is still there," Mr. Van Genderen said. "Add to that you have physicians who were never doing cases in my market, and now all of a sudden, I've increased the pie I'm getting a share of."
Mr. Bishop said the niche market model makes sense for hospitals, ASCs and physicians because all parties involved are able to increase their efficiencies. It's especially beneficial for physicians, who will be able to increase their ancillary income.
He also emphasized that physicians need to be a major part of the governance structure of these initiatives because the new era of healthcare reform is based on hospital-physician alignment. While hospitals can still shoot for 51 percent ownership, there needs to be a collaborative mentality.
"Our philosophy has always been physician-led," Mr. Bishop said. "If they have the right information at their hands, they usually make good decisions."
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