Hospitals target ASCs with new proposals

Outpatient revenue for hospitals and health systems jumped 10.6% year over year in January, as hospitals continue to see more complex procedures become safe in the outpatient setting, according to Syntellis.

Some health systems are developing ASCs while others are partnering with national chains. It requires a financial investment to build a new surgery center, which won't achieve the same reimbursement rates as hospitals or hospital outpatient departments. The costs associated with employing physicians is also on the rise, and hospitals with tight margins are contacting local physicians and surgery centers with creative ideas for partnerships.

"Hospital systems continue to face significant headwinds from payers and employers to aggressively shift elective patients into lower cost settings, such as spine and joint replacement cases into ASCs," said Michael Boblitz, CEO of Tallahassee (Fla.) Orthopedic Clinic. "These pressures are causing hospital systems to quickly reevaluate employed physician practices that have not directly covered costs for many years."

Mr. Boblitz told Becker's he is seeing more systems seek partnership models with large private practices with the scale to deliver value while also removing the traditional financial losses associated with those services.

"I am receiving these calls and excited to support our hospital partners," said Mr. Boblitz.

Ali Ghalayini, administrator of Munster (Ind.) Surgery Center, which focuses on pain management, sees the outpatient shift as well.

"There's an accelerating trend of procedures shifting away from hospital settings to outpatient facilities like ASCs. This shift is driven by advancements in minimally invasive surgical technologies, allowing safer procedures with faster recovery times," he said, noting another motivating factor is the cost savings for both providers and patients.

"This trend is particularly relevant for our center as it underscores the demand for ambulatory surgery services, presenting opportunities for expansion and specialization in pain management procedures," Mr. Ghalayini said.

Joseph O'Brien, MD, medical director for minimally invasive orthopedic spine surgery at Virginia Hospital Center in Arlington and a spine surgeon with OrthoBethesda in Bethesda, Md., is seeing more energy around partnerships between hospitals and physicians as care moves outpatient.

"Co-ownership aligns physicians with the economic realities of healthcare. ASCs allow doctors to share in the profitability of the center and have a synergy that may not be present in the hospital setting," he said.

Health systems focused on value-based care and aiming to send patients to high quality, low cost sites of care are looking for ASCs and physician groups aligned with their mission for partnerships.

"As we enter 2024 and are preparing to face the second half of the decade, I am energized to see so much focus in healthcare on areas that I really think will bring value to patients and communities around the country," Kevin Flemming, vice president of Orthopedic Institute at AdventHealth in Orlando, told Becker's.

He said the system is focused on investing in developing a sustainable workforce and finding the right partners to align with for growth.

"Finding the right partner, be it another health system, an industry vendor or a physician organization that shares an aligned mission and similar values can create synergies that become a strategic advantage in the dynamic healthcare ecosystem. The most creative solutions in this space will be exciting and fun to watch."

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