As ASCs continue to proliferate and consolidate, both hospitals and physician groups are rethinking their strategies to remain financially viable and competitive.
Marc Greenberg, MD, an orthopedic surgeon in Baltimore, Md., joined Becker’s to discuss the incentives behind shared ownership models, and why some independent groups are opting to build smaller, more distributed surgery centers.
Editor’s note: This interview was edited lightly for clarity and length.
Question: With more employed physicians receiving equity in ASCs through their hospital employers, what are the benefits of this model for both sides?
Dr. Marc Greenberg: It’s all incentive-driven. Payers want surgeries performed in more cost-effective settings, and there are two key dynamics at play. First, among the private groups that still exist — if you’re a total joint surgeon or doing endoscopic spine — you can take your case to a surgery center you own, instead of doing it at the hospital.
From the hospital’s perspective, that means a loss of revenue. But if there’s a partnership — often between a private group and a hospital — the hospital may put up the capital, and ownership is typically split, say 50/50 or 49/51. It becomes a win-win: the hospital retains some surgical income, and the surgeons gain ownership and benefit from the ancillaries.
For employed physicians, there are already clear benefits: stability, no overhead worries and so on. But giving them ASC ownership adds incentive. It motivates them to be higher-volume surgeons, rather than just hitting base salary and productivity bonuses. So again, it’s a win-win when both parties have a stake in the ASC.
Q: Many private practices and physician groups are financially tied to ASCs. Can you explain the considerations behind building new ASCs versus investing further in existing ones?
MG: I think it’s partially a market share issue. Private groups are consolidating for a variety of reasons, and one challenge they face is, let’s say three big groups come together but only have two ASCs. Suddenly, the income each partner receives from those centers may go down.
So to expand your presence and reach more patients—to be where the patients are—you can build smaller ASCs, cover a larger geographic area, maximize capacity, and run efficiently. That’s in contrast to having one large ASC where you’re trying to get patients to drive 45 minutes. One of the trends I see is building smaller ASCs that you know you can fill, rather than relying on one big center.
