'ASCs have to be nimble': How ASCs can face potential financial losses

Amid the COVID-19 pandemic-spurred economic downturn, many ASCS are looking to the 2008 recession as a blueprint for rebounding and growing.

ASC leaders face 9.1 percent inflation, a 21-year high, Medicare reimbursement cuts and higher overhead costs and staff wages. Some ASC leaders say government stimulus checks and a prioritization of big hospitals has hurt ASCs' long-term ability to thrive. 

"The artificial flow of government stimulus and its preferential flow to the big hospitals is a situation that was nonexistent in 2008 but has created real challenges this time around," Sukdeb Datta, medical director of Datta Endoscopic Back Surgery & Pain Center in New York City, told Becker's. "To get out of this situation, ASCs have to be nimble and maybe move to a different reimbursement model."

As a strategy to stand out and drive revenue, many ASC leaders are looking to switch to a value-based care model as payers migrate to bundled payments for their lower costs and better patient outcomes. 

"The payers are now interested in discussing bundles on some of the higher spends that can be done in the outpatient setting," Jeffrey Flynn, administrator and COO of New York City-based Gramercy Surgery Center, told Becker's. "With the bigger push to move procedures out of the hospital, many of us are in discussions for bundled payments with a boost in the reimbursement to bring it to a more cost-efficient setting."

ASC leaders are also looking to avenues such as private equity and physician investment to maintain profitability amid rising margins. And while much of the economic outlook is grim, some ASC leaders are optimistic about where the ASC industry is headed. 

"As ASC managers adopt [banking, retail and other] technologies, we anticipate another great era," Greg Horner, MD, managing partner at HealthPoint Ambulatory Surgery Co. in Pleasanton, Calif., told Becker's. "It is my hope that the ASC industry, the payers and we in the investment community help thoe who need it the most share in the next heydays of quality and efficiency from ASCs."

Independent ASCs, in particular, could come out on top, some ASC leaders said. Independently owned centers can offer surgeons a greater opportunity for ownership, and physicians often do not incur management or purchasing fees, provided the center has a strong and experienced management team.

"The current impending recession, however, is partially characterized by a major surge in real estate prices, even though Americans have much less buying power," Alejandro Badia, MD, founder and chief medical officer at OrthoNow Immediate Orthopaedic Care in Doral, Fla., told Becker's. "However, strangely, the demand seems to remain, and if supply can increase, despite the huge increase in supply chain and construction costs, then we will have many more ASCs in the market to provide care. I believe this is a testament to the great advantages afforded by independent ASCs. The future is perhaps even brighter now."

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