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Financial hit from COVID-19 could lead to ASC closures, more consolidation: 4 insights

Surgical practices are among the businesses at risk of insolvency because of the COVID-19 pandemic, which has major implications for the future of healthcare, Stateline reports.

Four things to know:

1. Many surgery centers have seen revenue drop upward of 70 percent due to elective case bans, which are also causing frustration for ASC patients, according to Ambulatory Surgery Center Association President and CEO William Prentice. And although CMS has made concessions allowing ASCs to provide COVID-19 relief as hospitals, there aren't a lot of centers doing so.

2. Post-pandemic patient volumes for surgery centers are a big question mark. Patients whose procedures were delayed may not get time off work to reschedule them, and patients who lost their jobs during the crisis may be unable to pay for surgery without employer-sponsored insurance. Surgery centers that do see volumes surge will have to have enough supplies and staff to accommodate higher volumes, which could be a problem for those that have donated equipment to hospitals or laid off employees.

3. Harmony Surgical Center in Fort Collins, Colo., will be at serious risk of closing if it can't reopen by June 1, owner Rebecca Craig, RN, told Stateline. The center is down to 10 to 12 patients a day, from the normal 80 to 90 a day. Nearly all of the ASC's employees are working half their normal hours — or less. Many of the practice's independent surgeons have had to lay off staff or scale back their hours as well.

"The question is, 'How long before we have to cut back even further?'" Ms. Craig said. "This can't last longer than June 1 for us to stay in business. It will get to a point where we either have to go to a bank and get a loan or close our doors."

4. Financial problems due to nonessential procedure standstills could lead to a spike in healthcare consolidation and less competition after the pandemic, according to Manatt Health Managing Director Jonah Frohlich.

"We're going to see a raft of acquisitions and mergers and integrations with independent clinicians who can't survive months of no revenue," he said in an interview with Stateline.

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