Will physician shortages threaten independent ASC ownership?

The U.S. is expected to reach a shortage of 37,800 to 124,000 physicians by 2034, and more than 2 of 5 active physicians will be older than 65 in the next decade.

This impending physician shortage, paired with increasing industry consolidation, has some ASC leaders worried the physician-owned business model of ASCs will be jeopardized.

"As the generation of independent surgeons that founded many ASCs 20 to 25 years ago approach retirement, there may be fewer surgeon investors available to replace them," Scott Thellman, MD, surgeon at Lawrence (Kan.) Plastic Surgery, told Becker's

This is exacerbated as more physicians are being employed by hospitals. By the end of 2020, nearly 70 percent of physicians reported being employed by hospitals, with a steady acceleration in the latter half of the year. 

Dr. Thellman added that hospital-employed surgeons could be pressured to partner with systems and develop strategies that allow for employed surgeons, rather than independent ones, to share ownership in ASCs.

Additionally, some ASC leaders have seen an increasing number of independent practices being sold to hospital systems and redirecting outpatient procedures to hospital-owned surgery centers.

"I think the pandemic severely affected the sole-practice physicians, as many of them sold to hospital systems to cut their losses and sustain their careers," Trey Sampson III, administrator of Newport Beach (Calif.) Surgery Center, told Becker's

There are also CMS and commercial payer changes that have made many physician owners question the financial viability of their ASCs. 

"Surgeons see inconsistent payer practice from CMS and commercial with restrictive prior authorizations and then the removal of the 258 CPT codes from the ASC," Christine Blackburn, BSN, administrator at the South Kansas City SurgiCenter in Overland Park, told Becker's "It's so hard to decide where to go with this information. Do we invest in more, or do we retire?"

COVID-19 was the tipping point for many physicians. About 25 percent of physicians have made plans for early retirement during the pandemic, according to a Medscape survey

With these retirements, Ms. Blackburn is unsure if newer surgeons will be able to buy the centers. Fewer physicians coming out of medical school are choosing private practice because they graduate with large medical school debt, and hospitals can offer signing bonuses to relieve some of that financial pressure.

Christina Holloway, RN, the administrator of Ambulatory Surgery Center of Bala Cynwyd (Pa.), expects ASC funding to also be affected by the physician shortages. 

"Our facet of healthcare will not only lose providers for the patient populations served but also supportive funding," she told Becker's. "When taking these future complications into account, along with the potential upcoming CMS amendments to elective procedures, the next three years will truly navigate how outpatient services will suffer or survive as a viable option for care."

Many ASC leaders are worried about this decline of physician ownership — will independent ASCs be able to keep costs low?

"Physician ownership preserves efficiency, is a great recruitment tool and keeps costs down for our patients," Dr. Thellman said. 

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