Growth opportunities across the ambulatory surgery center (ASC) space continue.
As a result, health systems, ASCs, private equity firms, and the best and brightest financial minds are making aggressive moves to take advantage of ongoing trends while boosting revenue and better servicing patients within their communities.
During an April webinar hosted by Becker's ASC Review and sponsored by National Medical Billing Services, Nader Samii, CEO of National Medical Billing Services, described the growth opportunities in ASCs and the critical steps to take to capitalize on these opportunities.
Three key takeaways:
- The ASC market is growing rapidly. The ASC market has seen rapid migration of outpatient surgeries to ASCs in recent years, with 50 percent of outpatient surgeries performed in ASCs in 2017, up from 32 percent in 2005, according to research cited by presenters.
"Surgery centers are projected to grow annually at 7 percent" Mr. Samii said. "All procedures and all specialties are moving." Orthopedics, spine, and cardiology are the fastest-growing ASC specialties.
Mr. Samii shared an estimate of how many procedures ASCs can expect to capture by 2025.
- 68 percent of orthopedic procedures (a 31% increase from 2018).
- 30 percent of spine procedures (a 200% increase from 2018).
- 33 percent of cardiology procedures (a 230% increase from 2018).
These trends are driven by cost savings and convenience for both patients and surgeons, along with an aging population, technological advancements, and better safety and outcomes.
2. Hypergrowth in high-acuity specialties can deliver financial gains. Mr. Samii shared an example of a multispecialty ASC adding 30 complex procedures per month and the financial impact this can have on the equity value of the center. Because these complex procedures can generate significant revenue per case (in this scenario estimated at $11,000 per case vs. a typical case of $2,000) and because higher acuity cases are typically higher margin procedures, the total EBITDA and the equity value increase substantially.
Complex procedures with average reimbursement being approximately $11,000 and being highly profitable (50 percent margins) will significantly increase the top line, bottom line, and equity value of a surgery center," Mr. Samii said.
3. Capitalizing on ASC growth opportunities requires seven critical steps. To take full advantage of growth opportunities, ASCs should review seven critical areas to ensure success.
- Recruit physicians and develop clinical protocols.
- Establish patient education and outreach programs.
- Negotiate managed care contracts.
- Implement strong front-end processes.
- Engage in financial counseling.
- Create effective revenue cycle processes.
- Have sophisticated analytics.
A strong revenue cycle program covering contracts, front- end processes, and coding and billing is crucial.
A great financial partner will "negotiate strong rates and work with the ASC to ensure the pieces are in place to capitalize on the financial component," Mr. Samii said.
In a case study of one of National Medical's ASC partners that followed these steps, the ASC experienced 647 percent revenue growth over 6 years.
As the ASC market experiences significant growth, there are tremendous opportunities, especially in high-acuity specialties, with benefits for patients, providers, and payers. Partnering with the right financial and revenue cycle experts can help organizations capitalize on these opportunities.
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