Wake-up call for ASCs
While most recent legislation and discussion regarding healthcare reform hasn’t impacted surgery centers yet, Mr. Lipomi says that ASCs should consider some of these debates, specifically regarding physician ownership, as a “wake-up call.”
“Hospitals have been debating the legality of physician-ownership [of specialty hospitals], and although ASCs have not been engaged on that level, the opposition is building the story that physicians shouldn’t own where they practice,” Mr. Lipomi says.
Surgery centers should be aware of this particular issue, Mr. Lipomi says, because they may find themselves lumped into a piece of legislation.
Mr. Lipomi also notes that changes in regulation, like the new Medicare Conditions for Coverage and other participation requirements, have recently been designed to change the nature of ASCs. “These regulations have lead to more paperwork, more restrictions and more requirements for surgery centers to have to shoulder and can affect daily operations,” he says.
With these considerations in mind, surgery centers should examine some of the issues surrounding physician-owned and specialty hospitals and see what could be in store for ASCs.
Challenges in a Democratic Congress
According to Mr. Lipomi, many of the restrictions on physician ownership that physician-owned hospitals had feared would pass into law have been dropped. “Most legislators saw that the opposition was made by only a few, not by the majority,” he says.
However, this does not mean that physician-owned hospitals and surgery centers are in the clear. According to Mr. Lipomi, there are still some legislators who continue to push these issues in Congress.
Mr. Lipomi notes too that having a Democratic majority in the Congress may make defeating legislation against physician ownership, Medicare reform and budget reconciliation that results in healthcare cuts, difficult.
Getting the support of both Republican and Democratic members of Congress is one way in which Mr. Lipomi says ASCs and physician-owned hospitals can work to ensure that their role in healthcare is understood.
“Recent studies have demonstrated the amount of money generated by these physician-owned entities,” Mr. Lipomi says. “Representatives should also make their legislators aware of the impact their centers have on employment, facility costs and other areas that affect the economy.”
Mr. Lipomi suggests that providers not just reach out to national representatives; ASCs and physician-owned hospitals should sit down with members of state and local government as well.
“Most of all, the support of the state and national associations [such as the ASC Association and Physician Hospitals of America] is critical,” Mr. Lipomi says. “It is important to keep in mind that organizations such as the American Hospital Association are spending millions on lobbying, not thousands.”
Possibility of single-payor healthcare
One issue that may be of concern for ASCs and physician-owned hospitals is the possibility of a government-run, single-payor healthcare system. Mr. Lipomi says that although many in Washington are pushing for this program, it will be difficult to accomplish given the nature of the insurance industry.
“With this system, thousands of employees and revenues would be jeopardized [as insurance companies close down],” Mr. Lipomi says. “The last thing the government would want to do is to make more people unemployed.”
However, Mr. Lipomi notes some benefits to the creation of a single-payor system. “Many uninsured patients who don’t have access to private healthcare would be covered,” he says. “A single-payor system would open up doors for treatment for these patients.”
Most of all, Mr. Lipomi sees this issue coming down to a “cultural debate” in the United States, meaning that many patients and physicians are used to the level and quality of healthcare a competitive system has created. “For example, in many countries with single-payor healthcare, such as Canada, treatment for coronary artery disease is basic aspirin. It may be difficult for American providers to accept the change in the level of treatment and the procedures that are covered,” he says.
Some additional changes a single-payor system may have that Mr. Lipomi notes is a single choice in the type of lens used for cataract surgery or a limited selection (3-5) of implants that can be used in total knee or joint replacement. “There is only so much money in the governmental system, and they can only afford to cover so many procedures a year,” he says.
Mr. Lipomi suggests that the U.S. government should look at these foreign countries with single-payor systems to see what has worked and what hasn’t worked. For example, he mentions that Denmark recently introduced competition into their system. The government has been paying funds only to the areas in which a patient is treated, not a flat rate across the board, which can then breed competition, according to Mr. Lipomi.
As far as converting to this system, Mr. Lipomi remains unsure whether or not the American public will take to it.
Government-mandated employee health insurance
Another proposal to healthcare reform is mandatory healthcare coverage of all employees by their employers. Several states, such a Massachusetts and Hawaii, already have statewide mandates in place. Mr. Lipomi notes some areas that ASCs and physician-owned hospitals should be aware of when considering how this issue could affect them.
“This may cure one problem [the increasing rate of uninsured Americans] but may cause others,” Mr. Lipomi says. One major concern is the additional financial burden employers will have to shoulder to properly insure their employees. “This increases the overall costs of running a business,” he says. “The higher prices may cause many companies to go out of business.”
Additionally, employers may be forced to provide duplicate insurance for those who may be covered under a parent’s or spouse’s insurance plan.
Mr. Lipomi says that many of the major plans have “agenda items” underway in Congress that may keep this debate ongoing for a few more months. Recently, however, Pres. Obama said that he was opened to the idea of government-mandated healthcare.
Increasing government regulations
Mr. Lipomi says that one of the biggest results healthcare reform could have on physician-owned hospitals and ASCs is the continuation of state and national government to impose regulations and restrictions on these facilities.
“These healthcare facilities pride themselves on their independence and their ability to provide a higher level of care for the patient,” Mr. Lipomi says. “New regulations would limit the ability of ASCs and physician-owned hospitals to provide this care because too much time and money will be spent on the enacting them.”
The freedom from these regulations is one reason ASCs and hospitals had moved away from the general acute care hospital setting, Mr. Lipomi says. However, he notes that these government regulations are attempting to move the standards of healthcare towards the “center,” meaning that ASCs, physician-owned hospitals and general acute care hospitals would provide the same level of care.
For example, the federal government has recently required stricter enforcement of infection control at general acute care hospitals. Mr. Lipomi says that as these facilities become subject to a higher level of scrutiny, they may ask the government to come down harder on ASCs and physician-owned hospitals, which have reported lower levels of healthcare-acquired infections.
Therefore, as more money is spent on new government regulations, the costs of running an ASC or physician-owned hospital may level out with the costs of running a general acute care hospital, Mr. Lipomi says.
What ASCs and physician-owned hospitals can do
Much like the general acute care hospitals have done, Mr. Lipomi suggests that the best ways ASCs and physician-owned hospitals can take a proactive stance to get their message heard is to establish a presence in the government and on the community level.
“Community outreach is one way to increase the transparency of your center,” Mr. Lipomi says. By hosting educational events and open houses, ASCs and physician-owned hospitals can bring members of the community into the facilities so that they can better understand what goes on and get a chance to see the facility personally.
Aside from increasing transparency, Mr. Lipomi suggests that ASCs and physician-owned hospitals should use their financial resources and reinvest in political advocacy. “It is shocking how many Senators and Representatives have no idea who we are and what we do,” he says.
By reaching out on a local and national level, ASCs and physician-owned hospitals ensure that their facilities will be met with more consideration by those drafting the legislature for healthcare reform.
“We are an innovative industry,” Mr. Lipomi says. “Right now, the innovators are being left behind.”
Mr. Lipomi (ssurgery@aol.com) is president of RMC MedStone Capital, a company focused on acquiring ASCs and small hospitals, focused on surgery, in partnership with physicians. Learn more about RMC MedStone Capital.
