Where ASCs fit in a consolidating marketplace — Is independence an option?

Healthcare leaders have a significant challenge in front of them — running a sustainable business that tasks providers to offer high-quality care in an exceedingly trying reimbursement landscape. While surgery centers have gained traction in recent years, a large portion of ASCs are entering new partnerships with health systems and health plans to remain financially afloat. However, some ASCs are successful in maintaining their independence and will continue putting forward efforts to remain so, despite the healthcare landscape swiftly consolidating.

During a keynote panel at Becker's 15th Annual Spine, Orthopedic & Pain Management-Driven Conference in Chicago, a panel of physicians with ASC ownership spoke about their marketplaces and factors that may be strengthening or chipping away at their ability to remain independent. The panel featured Daniel Tomes, MD, president of Southwest Lincoln (Neb.) Surgery Center; Daniel Larose, MD, CEO of Omaha, Neb.-based Advanced Surgery Center; and Gregory Corradino, MD, neurosurgeon with Johnson City-based East Tennessee Brain and Spine.

Recruiting physicians
Making physician recruitment an overall priority for a surgery center is vital to the center's sustainability. If ASCs forgo the importance of bringing in new physicians, especially as partners edge toward retirement, volume could drastically decrease and many younger physicians could seek hospital employment.

"I try to empower mature physicians to be leaders and bring in new recruits," Dr. Tomes said. The ASC leaders can highlight what differentiates the surgery center from other practice settings, such as advertising that Southwest Lincoln Surgery Center is the only surgery center in the area doing outpatient spine procedures. The ASC's leaders also keep a close tab on physicians' ages to ensure the surgery center is not left high and dry if a group of physicians' opt to retire at the same time.

"If surgery centers have physicians who are all the same age that could start to hurt them down the road," Dr. Tomes said. "We get a list every year from the local medical school of [students] doing neurosurgery. We send [those students] a note and that has been how I've been able to recruit so far."

Dr. Larose is the president of an orthopedic group that has been placing more emphasis on subspecialization and bringing in more providers who specialize in certain areas, such as hands or sports medicine. He noted the group has two hand specialists who do replantations, which differentiates the group from other local orthopedic or spine groups. Differentiating a surgery center or a group is crucial in the competitive landscape and highlighting what sets your center apart from competitors will help bring in new blood.

Relationship with hospitals: Ally or adversary?
The relationship between surgery centers and hospitals can often be quite complicated and can evolve from a competitive relationship into a partnership. East Tennessee Brain and Spine operates in a certificate-of-need state, which Dr. Corradino noted required the ASC to obtain hospital approve before being built. The local hospital owns 51 percent of the ASC. While the surgery center is faring well financially at this point in time, this may change if two major hospital systems' merger comes to fruition. The merger could impact competition in the Johnson City area, making it difficult for independent surgery centers to compete.

"If the hospital merger goes through, there probably won't be much independence left in the area. I joined a multispecialty group in my career and that lasted about four or five years," Dr. Corradino said. "If considering it again, I would look at the shared vision and the leadership of the group."

Despite two hospital systems operating in Lincoln, Dr. Tomes said the Southwest Lincoln Surgery Center is doing well at this point in time. Planners built the surgery center on a hospital's grounds in 2009, which occurred because the CEO at the time was retiring and allowed the decision. The hospital tried to buy the ASC out two years ago and wanted 51 percent ownership.

"It took awhile to get our doctor to realize even if you get the big check [initially], it will go down and stay down afterward," Dr. Tomes said. "We didn't want to go back to the deficiencies we had when we left the hospital for our surgery center."

The physicians concurred they want to maintain ownership in the surgery center, despite the factors at play that may interfere with this goal. Some fears may be escalated within the medical community, and not be as daunting as they initially appear.

"[Some concerns I have] are mainly the unknown and uncertainty in the law arena, but I have been in practice for 30 years and I am not too worried," Dr. Larose said. "In the Midwest, there are trends happening in the larger cities that won't be [relevant] in our rural area. Whenever there is a threat, I think about it but I don't overreact to it."

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