4 experts on physician, practice independence amid healthcare consolidation

The ASC industry and its future success will require both independent surgeons and large hospital systems to effectively utilize resources, according to several panelists who spoke at Becker's ASC 2​6​th Annual Meeting: The Business and Operations of ASCs, Oct. 24-26 in Chicago.

During a keynote session called "The Next Five Years for ASCs — What Will Work, What Won't Work and More," Scott Becker, publisher of Becker's Healthcare and a partner at McGuireWoods, moderated a panel that included the following experts:

  • Michael R. Redler, MD, visiting assistant clinical professor of orthopedics at the University of Virginia in Charlottesville, assistant clinical professor at the Frank H. Netter School of Medicine at Quinnipiac University in North Haven, Conn., and president of the medical staff at the Surgery Center of Fairfield County in Trumbull, Conn.
  • Caitlin Zulla, CFO and chief administrative officer of Surgical Care Affiliates
  • Alpesh A. Patel, MD, director of orthopedic spine surgery and professor of orthopedic surgery and neurosurgery at Northwestern Medicine in Chicago.
  • Chris Bishop, CEO of Regent Surgical Health

At their respective ASC management companies, Ms. Zulla and Mr. Bishop have both seen higher-acuity procedures such as spine and cardiology cases moving to high-quality, low-cost outpatient surgery centers. Their observations align with ongoing national trends, according to a September report from Bain & Co. that forecasted up to 7 percent annual procedure volume growth at ASCs through 2021.

But scarcity of independent physicians is a threat to the business of ASCs, according to Ms. Zulla. To address the issue, SCA is focused on helping specialty physicians remain independent, or in some cases, get out of hospital employment.

"Without independent surgeons, the ASC industry won't thrive as much as we think it has the opportunity to," she said. "We think it should, for all the right reasons: higher quality, lower cost of care."

However, according to Dr. Redler, ASCs are "seduced" every day by hospital systems who want a share of the profitable business. As healthcare systems "grab as many doctors, ASCs and providers as they can," smaller practices in many markets seem to have few options outside of merging to remain competitive, he said.

"I'm in private practice but we've recently merged and become part of a bigger entity. And when you start getting these very large private groups, you actually lose some of that independent feeling that you would have with a smaller group," he said.

But there is a trade-off for losing some autonomy: gaining more resources and market power.

According to Dr. Patel, an ideal healthcare model wouldn't be so polarized; it would be built on collaboration between physician-owned practices and regionally dominant systems.

"Right now, the current model is it's either you live in one world or the other. There's a lost opportunity if you don't have both of those [parties] collaborating in a real partnership," he said.

There's also an opportunity to better utilize secondary providers such as nurse practitioners and physician assistants, according to Mr. Bishop. Spine surgeons, who invest years and years into specialty training post-college, shouldn't be spending their time educating patients on treatment protocols.

"We're really seeing training of secondary providers [to do that]," he said. "The days of us thinking, 'I have a little knee pain; I need 30 minutes with my orthopedic surgeon,' those days are numbered."

At the end of the day, if quality care is provided and the market conditions are right, small independent practices won't go away — particularly in spine, where there are large margins, Dr. Patel concluded.

"If they're going to try to survive, they're going to need to define what their service is — the value they add to the healthcare market that a large hospital system can't provide, or that a large multispecialty group can't provide," he said.

More articles on turnarounds:
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