How important is independence to ASCs?

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With increased industry consolidation and almost 70 percent of physicians reporting being employed by hospitals at the end of 2020, ASC leaders have differing opinions on the importance of independence. 

Nine ASC leaders spoke with Becker's ASC Review on how important independence is to ASCs on a scale of 1-10, 10 being the most important. Here are their answers:

Editor's note: These answers were edited lightly for clarity and brevity. 

Question: On a scale of 1-10, how important is it to you that your center is independent? Why?

David Bittner. CEO of OAA Orthopaedic Specialists (Allentown, Pa.): Independence is a driver for the highest levels of innovation, patient experience, cost containment and quality, so this scoring is easily a 10. As an independent organization, we are able to quickly and efficiently manage evolution through the voices of our providers and patients. Furthermore, as an independent ASC, our cost per case is exponentially lower for the patients and provided with a higher-quality product from some of the most experienced and highest trained providers in the market — a rare find and of incredible value to the patients in the new era of insurance directives to ASCs, high-deductible insurances, direct-to-business contracting and self-paying consumers. 

Aby Morris, RN. Administrator of Union City (Tenn.) Surgery Center: I would rate the importance of our center being independent at a 7. Our facility is a free-standing, physician-owned ASC. I am grateful for having a board of directors that I can reach out to when making important decisions and being able to obtain a quick response when necessary in acquiring changes to center policy and procedures. This factor proved extremely valuable at the onset of COVID-19 and has continued to be an asset throughout the global pandemic. The governing process was sometimes utilized daily in the beginning for changes that were required. On a daily basis, committee participation, equipment approval and surgical schedules are also much easier to arrange when the physicians are directly involved and a management company/hospital’s red tape is eliminated from the equation. 

Negative issues in independent ownership are also a reality. These include increased insurance premiums for employees due to the staff or facility size, lower reimbursement rates from CMS in rural areas and higher supply expenses due to lower volume of items purchased as compared to management companies and hospitals. 

Amber Gilroy. CEO of Cascade Eye & Skin Centers (University Place, Wash.): Our organization would rate independence as a 10. We are a partnership, and our partners have ownership in our ASC, so having independent oversight is very important. We allow nonowners to perform surgeries in the ASC; however, the governance is led by our physician owners.

Steven Gunderson, MD. Administrative medical director of Rockford (Ill.) Ambulatory Surgery Center: I would give this a 2. My community, like many, has undergone a significant transition from having a majority of surgeons practicing independently to the majority now being employed by one of the three hospital systems in our medical service area. This has resulted in our patient mix changing significantly, as the employed physicians are encouraged to provide surgical services at their respective hospital outpatient department. We have had the opportunity to observe this transition over the last five to seven years as the younger generation of surgeons replace the old guard. These younger surgeons have large undergraduate and medical school debt and no ambition to become independent entrepreneurs when the hospital systems provide a guaranteed income and minimal responsibility to run a practice. 

ASC independence in our community has seen its better days and is slowly being replaced with corporate medicine. Our business will survive to provide lower-cost surgical services, but our independence is questionable.

Alejandro Fernandez, CEO of Synergy Orthopedic Specialists (San Diego): It's important that you pick the right partner(s). If you partner with a hospital or management company, what do they bring to the table that is important to the ASC and its shareholders? 

David Printy. Co-founder of TruDataFax (New London, N.C.): 8. I firmly believe that independent physician-owned practices and surgery centers provide lower cost to patients and payers. Site-neutral rules will have an impact on health systems, but all to the good of cost of care. Not having overhead of a health system just makes financials work best for patients.

Robert Ball, MD. CEO of Southwest Florida Pain Center (Port Charlotte): 7. We desire independence. We are able to adapt to changing market conditions quickly and nimbly. Decision-making is fast, and we remain agile even while receiving input from stakeholders.

Glynis Thakur. Principal consultant and lead negotiator of Advanced Negotiations (Bellevue, Wash.): I have seen ASCs partner with hospitals or large ASC groups. In every scenario, the hospital or large group takes over administrative control. This inevitably leads to higher costs, lower performance and unhappy surgeons and staff. The whole reason physicians set up independent ASCs is to be able to control their schedules and costs.

Alfonso del Granado. Administrator of Covenant High Plains Surgery Center (Lubbock, Texas): 10, definitely! Although we are a joint venture with a national management company and a regional hospital system, the majority of the shares are divided among 44 physician partners who value their independence above all. The result is a strong governing board that carefully balances the interests of the center with the realities of the society in which we operate. We provide an outlet for physicians who do not feel the local hospitals are allowing them to meet their patients’ needs adequately, physicians who want their voices heard and those who value a strong sense of pride of ownership.

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