'They pulled the daggers out' — Dr. Shakeel Ahmed on owning ASCs in a hospital-dominated market

Atlas Surgical Group — one of the St. Louis metropolitan area's largest private surgical groups — began making ASC ownership a priority over a decade ago, betting that healthcare in the U.S. was headed in an outpatient-focused direction.

The group opened Metroeast Endoscopic Surgery Center, a multispecialty ASC in Fairview Heights, Ill., around 2010, later followed by two St. Louis surgery centers: Apollo Ambulatory Surgery Center and Elite Ambulatory Surgery Center. Atlas Surgical Group also purchased Belleville (Ill.) Surgery Center and Belleville-based Physicians' Surgical Centre from Deerfield, Ill.-based Surgical Care Affiliates.

More recently, the practice became the first in O'Fallon, Ill., to gain certificate-of-need approval for a surgery center. O'Fallon Surgical Centre — Atlas Surgical Group's sixth ASC — will begin accepting patients in the next few months.

By putting its resources into the outpatient setting, Atlas Surgical Group made a solid bet, according to Shakeel Ahmed, MD, CEO of Atlas Surgical Group. With large hospitals and health systems dominating the St. Louis area, ASC ownership is a competitive strategy.

Moreover, national data indicates that the country could save about $3 billion annually by moving gastroenterology, gynecology and orthopedic surgery procedures to the outpatient setting. Insurers such as UnitedHealthcare and Blue Cross of Minnesota are taking note and implementing policies that encourage ASC utilization for elective procedures.

"This is the right thing to do," Dr. Ahmed said. "Anyone with a conscience and an ethical mind knows this is where the country should be going. A third of our budget goes toward Medicare and a third is going toward our social services. What they're doing in hospitals is unsustainable."

But hospitals aren't going gentle into that good night, Dr. Ahmed told Becker's ASC Review. The large hospitals and health systems in his area are pulling out all the stops to prevent ASCs from gaining CON approval or offering lower-cost services that will draw patients away from the inpatient space.

"If you want to open a really nice bakery next to Walmart, guess what happens? Walmart jumps on you to crush you," he said. "So when we applied for our CON, the local hospital network … they pulled the daggers out and went all the way to the CON board to oppose us."

Hospital-employed primary care physicians are getting caught in these battles, according to Dr. Ahmed. Fully aware of where their bonuses and contracts come from, they may hesitate to refer patients to ASCs that could provide the same procedures at lower costs.

Plus, Dr. Ahmed said, these providers who are already overwhelmed may be burdened with extra paperwork if they do choose to refer patients out of the system. At the end of the day, the decision to keep referrals in-network by providers who "have no choice but to comply" only hurts patients, Dr. Ahmed said.

"Referring patients for elective procedures to a hospital when a local ASC is able to provide that service for a third of the cost is medical malpractice and should be punishable as such," Dr. Ahmed said. "Stop calling it unethical, because people will do it if it's unethical. Start calling it illegal, and people will stop."

The issue doesn't necessarily have to come down to legal blows. Dr. Ahmed said hospitals could voluntarily give up elective procedures to outpatient settings at a temporary loss, as they did with dermatology and ophthalmology procedures such as mole removal and cataract surgery.

Hospitals can also partner with ASCs, establishing a relationship where a percentage of cases are done in the outpatient setting. Even buying an ASC and providing services there at a higher price is a lesser evil than doing elective procedures in the inpatient setting, Dr. Ahmed said.

Dr. Ahmed said Atlas Surgical Group feels the squeeze by local hospitals on a daily basis, with referrals shrinking as health systems work to keep services internal. But when the practice petitioned the O'Fallon board for a certificate of need to build its ASC, it gained unanimous approval — a much-needed win despite opposition from the local $2.4 billion health system.

"There's enough awareness in the medical community — enough people with the right ethics, approach and freedom that will continue to use us — that we will not only survive, but we will come out winners," Dr. Ahmed said. "There are good people out there and on our team who will make sure that we continue to thrive."

Want to share your thoughts on this topic? Email Angie Stewart: astewart@beckershealthcare.com.

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