The ASC-hospital power shift: Who will win the next 3-5 years?

In 2020, more complex surgeries rapidly moved into ASCs as hospitals were overburdened with COVID-19 cases.

Some surgery centers forged deeper relationships with local hospitals when these cases transitioned, while other hospitals saw ASCs as fiercer competition.

Stephen Hochschuler, MD, co-founder of Texas Back Institute in Plano; David Rothbart, MD, medical director of Spine Team Texas in Southlake; Anthony Romeo, MD, executive vice president of the Musculoskeletal Institute of DuPage Medical Group in Elmhurst, Ill.; and Maulik Bhalani, MD, owner and founder of Florida Pain Medicine in Wesley Chapel, discussed the relationship between hospitals and ASCs during a June 16 panel at Becker's 18th Annual Spine, Orthopedic and Pain Management-Driven ASC + Future of Spine Virtual Conference.

"What we know now is probably 70 percent or more of all orthopedic and spine cases can be done in an ASC, and that's frightening to the hospital," said Dr. Romeo. "They realize they have to play ball now."

He said hospitals across the U.S. anticipate losing a large portion of their joint replacement and spine cases in the next three to five years to the outpatient setting, without a clear pathway to recover that revenue. As a result, hospitals are more willing to partner with physicians to create a surgical ecosystem with a joint venture ASC or specialty hospital.

The way physicians leverage this new power dynamic will set the tone for their relationship with local hospitals for years to come.

"If you partner with a healthcare system so that you're migrating cases and keeping it within the healthcare system, there's going to be lots of love on the table, there's going to be lots of synergy," said Dr. Rothbart. "However, if you try to be competitive and you're in a market where that healthcare system controls the majority of the patient population by their large healthcare physician groups that they own, you're going to be struggling. It can be done, but it's an uphill battle."

Dr. Romeo noted another strategy: building the strength in numbers for independent physician groups. Even though it's in a market dominated by major medical centers, DuPage Medical Group has more than 800 physician members and cares for more than a million patients, making the group a significant market player. The group can provide an integrated care platform with all the services needed for outpatient care.

"We are no longer ignored," said Dr. Romeo. "We are a force to be reckoned with, and so when we sit down at the table, it's a fair discussion of how we can create an ecosystem across all parts of site-of-service."

One of the advantages independent physician groups and ASCs have over larger institutions is their ability to operate in a true value-based care model, because ASCs can be more efficient and less expensive than hospitals. The physician owners of surgery centers curate effective care environments, said Dr. Romeo, which are different from hospitals that must be prepared to care for any patients who walk through the door.

"For the longest time, the hospital systems tried to really be leveraged against the ASC and keep cases in the hospital, and they still do that now in some major metropolitan areas where they have the power to do that," said Dr. Romeo. "But the insurance companies know now that for the vast majority of procedures done in an ASC, they can save anywhere from 25 percent to 40 percent of the overall cost of care. We're not solution shops; we're basically race car drivers that are doing a specific case very efficiently with the same outcomes."

Click here to view the full session recording.

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