Lee Lasris, a board-certified health law attorney and founding partner of Florida Health Law Center in Davie, discusses how ambulatory surgery centers are fitting into today's healthcare environment and where their role might be headed in the future.
Q: What will be most important for ASCs to succeed in the future?
LL: Like any other business, it's the location. ASCs must find a good location to make sure there's a market for their services. ASC owners must know their market in order to be successful. The best location is where there's an aging population and the greatest number of potential patients. That doesn't mean a rural location can't be successful because there are incentives for rural operations, but the highest chance for success is to place your business where it will get the most traffic.
Also keep in mind the fact that regulations are constantly changing. If you decide to get into the ASC business, be aware of the changing environment and be prepared to respond quickly. That's a fundamental fact of life in the healthcare business. We're going toward payment for quality outcomes and providers deciding to go into the healthcare industry should be aware of that. They need to know whether they can ensure a quality outcome for their patients.
Q: Medicare's pay-for-performance initiatives are underway and now surgery centers are required to report on quality measures along with hospitals. How will this impact the healthcare system?
LL: The move to a performance-based system will have an impact on the economics of the ASC. I see them as an alternative to hospitals. I think down the road there will be a market for higher quality care and we'll see a push toward the development of ASCs, especially as baby boomers age. There is a lot of different healthcare being purchased.
Q: Accountable care organizations represent another big shift in healthcare management. Will there be a place for ASCs in ACOs?
LL: Whether ACOs will have an impact on ASCs remains to be seen. I believe there will be a role for ASCs to play in ACOs as they mature because the surgery center is a cheaper and therefore more cost-effective options for appropriate surgery. You are seeing all kinds of procedures normally relegated to the hospital operating room being done in an outpatient setting. There is definitely going to be a demand for ASCs in the future, but they will have to become accustomed to the different reimbursement models.
For ACOs, the outcomes are an important issue. They are going to update their surveillance systems for post-discharge outcomes and be able to track this information to prove the type of quality they deliver. We are moving more toward mass information gathering and surgery centers can benefit from implementing electronic medical records.
Q: EMR is expensive for surgery centers, especially since it isn't yet required. Is the EMR still a good investment?
LL: The purpose of EMR is data gathering, including outcomes data, and that's what we're looking for in the future. Eventually the technology will be able to help us save on healthcare dollars, but it's a long process. EMR is a huge investment along with computers and other electronic equipment required to access records on a confidential basis and submit those records to other providers. I believe we'll evolve to central databases.
Healthcare is changing and dynamic, but once you make the investment in EMR you can see the efficiencies down the road. You have to put in a huge effort to plant the seeds of progress, but it will be beneficial in the future.
Q: Where do you see the biggest opportunities for ASC growth in the future?
LL: There's always going to be a push for other kinds of surgeries to be performed in the ambulatory setting. Eye surgeries are being done with Medicare reimbursement and physicians are looking to attract cash-pay patients in other specialties where Medicare doesn't reimburse for surgery in ASCs. The delivery of healthcare on these services is much less expensive on an outpatient basis, so the ASC is the ideal place to offer them.
Doctors are always looking for other opportunities to deliver healthcare that doesn't rely on Medicare or insurance companies. To the extent that services can be delivered in the ASC, there are other opportunities for surgeons to bring in higher acuity cases. Surgeons can invest in surgery centers as well, but you have to be careful of regulatory compliance.
Q: There is a massive trend of consolidation in the healthcare industry today with hospitals purchasing physician practices and health systems acquiring hospitals. How will that impact surgery centers? Do you foresee more ASC joint ventures in the future?
LL: I definitely see most surgery centers somehow joint ventured with hospitals. The ones I've had experience with involve hospital investment. The joint ventures are expensive to put together and they still require a sizable investment from the physicians. However, not all of the ASCs will require hospital investment. We have one that is being syndicated amongst a group of physicians successfully.
While it's common for hospitals to be invested in these ASCs, they are not exclusive. If the hospital is going to be involved, they have to work with surgeons to comply with anti-kickback rules and it's advisable that there be a safe harbor available for the investment. In structuring arrangements, look carefully at what the OIG is saying and follow their direction.
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