ASC market saturation, competition & growth areas — 6 key insights

ASCs are poised to benefit from the consumerization of healthcare and the shift from fee-for-service to value based care, but there are also headwinds to keep in mind, according to Global Healthcare Advisors, an investment bank focused on healthcare mergers and acquisitions.

Six insights from GHA's latest ASC market brief:

1. The number of Medicare fee-for-service beneficiaries and the number of services per beneficiary grew faster than the number of ASCs in 2017, causing "a high degree of competition" among centers. Market saturation is another significant headwind for ASCs. In roughly 50 percent of U.S. states, there are at least 10 ASCs per fee-for-service beneficiary.

2. Musculoskeletal and orthopedic surgery is an area ripe for growth. While a small number of single-specialty ASCs are devoted to these procedures, they offer higher potential revenue and reimbursement than other cases.

3. In the coming years, ASCs may be subject to new quality reporting rules. ASCs are currently only evaluated on submission of quality performance data, not the data itself, which the Medicare Payment Advisory Commission foresees changing.

4. With payers consolidating, ASCs lacking scale may face downward pressure on reimbursements. Additionally, the reimbursement gap between ASCs and hospital outpatient departments may shrink over time, exacerbated by hospitals' negotiating power.

5. ASCs have surpassed HOPDs in outpatient surgery volume in recent years. However, the continued migration of surgery cases — particularly high-acuity ones— from HOPDs to ASCs is essential to future market growth.

6. Patients may delay elective procedures as high-deductible health plans become more common and costly. The trend could "inhibit case growth and put pressure on margins," GHA concluded.

Click here to download the report. 

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