5 big challenges for ASCs that turned into opportunities

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Davenport, Iowa-based Mississippi Valley Health President and CEO Michael Patterson encountered several challenges over the past few years, whether it was accountable care organizations, aging physicians or referral blacklisting. But out of those challenges rose opportunities for his centers to thrive today.

"I think it's a great time to be an ASC leader because there is a lot of opportunity and our patient outcomes and satisfaction are very high," says Michael J. Patterson, FACHE, President and CEO of Mississippi Valley Health. "It's a good time for patients to get to know about what ASCs can provide them. Physicians have been reluctant to take bigger cases like spine and total joints (knee, hip, shoulder and ankle) outpatient, but there is enough evidence out there showing it can be done successfully and patients enjoy the ASC experience."

Here are five key thoughts on the opportunities for ASCs going forward.

1. ACOs and narrow networks. The new payment models are springing up around the country in large and small communities. In some places, ASCs adapt; in others they're left on the outside looking in.

"Both health systems in our community have ACOs and are very aggressive around their patients receiving care at one of their facilities," says Mr. Patterson. If you aren't part of one of those systems, you will be carved out of the ability to care for patients. It's ironic given the fact that ASCs are so much more economical than hospital outpatient departments, yet hospitals and health systems continue to carve ASCs out of their ACOs if they aren't partners in the facility."

After 18 years of independence, the physician owners of Mississippi Valley Health entered into a joint venture with a Regional Health System. They also brought on a corporate management partner to manage the relationship between the physician owners and health system. "Sometimes those agendas don't line up as they should, and the management company helped foster a middle ground," says Mr. Patterson.

2. Aging physician owners. Less than 20 percent of the physicians using Mississippi Valley Health are under 50 years old; the majority are 50 years and older. Those physicians are taking more vacation time and planning for retirement, but the ASC has had trouble recruiting new owners because more physicians are becoming hospital-employed.

To attract and retain physicians, Mr. Patterson and his team have either implemented or considered the following key imperatives:

• Improved the surgeon experience
• Educated surgeons about evidence supporting outpatient surgery safety
• Made the scheduling process easy
• Added services, such as OB/GYN and urology
• Expanded current programs, including total joints and spine
• Entering into bundled payments that could steer patients to its facilities
• Added new technologies (such as femtosecond Laser for cataract surgeries)

"We have been doing total joints and spine cases for almost 10 years and we're looking to see how we can facilitate even more volume for appropriate cases in the ASC," says Mr. Patterson. "We can do that through either bundled payment arrangements with payers, which will save them and the patient’s money and through patient and primary care physician education. In the near future, patient awareness of out-of-pocket costs will steer them toward our ASC as well."

3. Referral blacklisting. Primary care physicians are hospital-employed in many communities and experience restrictions on where they refer patients.

"When we entered into our joint venture, the competing health system blacklisted all of our owners and told their employed primary care physicians not to refer patients to our owners," says Mr. Patterson. "We have not seen an influx of new surgeons over the past few years and we're wrestling to increase our referral base. But we are working with our hospital partner on surgical site optimization to identify the best cases for ASCs."

Some hospitals with joint venture ASCs allow physicians to take appropriate cases into the outpatient setting, which frees space in hospital operating rooms for more complex and higher acuity cases. In the future, payers may also drive the change, demanding outpatient services at the lowest-cost setting whenever possible.

"Employed surgeons will eventually say, 'I could jump through hoops for approval from the payers to perform this procedure at the hospital or I could take it to the ASC easily'," says Mr. Patterson. "However hospital leaders are looking to generate revenue to cover the salary of employed surgeons. But at some point an ACO or some risk-sharing model could create the need for hospital leaders to re-examine their policy. They'll either pay more for the risk-sharing piece of the ACO or allow surgeons to perform procedures in the low cost setting and save money." It is a delicate balance and when appropriate we feel that hospital leaders will be thankful for the relationships they have forged with the surgeons and ASCs in their communities.

4. High-deductible health plans. High-deductible health plans are more common and many providers fret over collecting from patients. But ASCs have an advantage because typically the smaller centers understand their cost structure and can provide a flat rate for patients trying to cost-compare.

"We can get paid for one episode of care without having to charge for medications and other things hospitals do," says Mr. Patterson. "If you want a knee replacement, we can tell you what you'll pay based on your high deductible plan. We've had patients calling around to figure out the costs and our business office helps educate people on their responsibility."

Patients with high deductible plans are required at a minimum to cover the cost of at least the implant upfront at Mississippi Valley Surgery Center, and then the center employs other collection tactics if needed for the balance. "We haven't had any push-back from patients about the process, especially when they compare our pricing to that of our competitors." says Mr. Patterson.

5. Incorporating innovation. The best clinical and administrative technology at ASCs will improve the surgeon and patient experience, thereby driving patient volume. Surgeons are looking for facilities with the best clinically-proven technology, but not every facility needs every piece of equipment.

"Create centers of excellence for certain procedures and do a high volume to become efficient and successful," says Mr. Patterson. "Then it will make sense to purchase the newest technology and equipment for the center."

Other products like online tools for patients to record their health history, text message reminders and copay prediction tools make the ASC run more efficiently. Technology like social media can also drive patient interaction and brand awareness for the center and our physician partners.

Innovation is key but you also have to be successful at the basics such as the patient experience, staff teamwork and effectiveness, surgeon confidence in the clinical and administrative team and being a good partner to the community you serve.

Mississippi Valley Surgery Center and Mississippi Valley Endoscopy Center share one mission and that is "Excellence in Care and Service." That is what has made both facilities very successful over the last two decades.

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