'ASCs could fail with inflation taking hold': How ASCs can remain profitable

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As Medicare reimbursements shift in the next two to four years, some ASC executives are concerned about how ASCs can remain profitable amid inflation. 

Ron Blair, chairman of Mesa, Ariz.-based Surgery Center Services of America, spoke to Becker's ASC Review on how reimbursement policy changes will affect ASCs and how supply chain is hurting profitability. 

Mr. Blair has been developing ASCs since 1990. Surgery Center Services of America has plans to open 14 more ASCs this year and has developed more than 300 centers nationwide.

Editor's note: This response has been edited lightly for clarity and brevity. 

Question: What's a challenge for ASCs in the upcoming years?

Ron Blair: I think a challenge we've got down the road, particularly with the current administration, is what's going to happen with Medicare reimbursements over the next two to four years. 

ASCs could fail with inflation taking hold. At the federal level, is there going to be some recognition of this increased cost, and will rates with Medicare reflect that? Are we going to be stuck without any relief? And then how do we manage our increased costs to maintain a good bottom line for the surgery centers? I see that as an evolving challenge for the ASC industry.

I think it's going to force anybody who's operating or managing an ASC to analyze their costs. I think you're going to see collective bargaining on the part of multiple surgery centers with vendors to get better pricing on supplies.

Historically, medical supplies for surgery centers say that ASCs have not done a very good job of holding our suppliers' feet to the fire. If we see a 10 percent increase in our costs, we're not going after the supplier for a 10 percent decrease in their product. As an industry, we've done a very poor job of that. We've kind of just let them have their way or, more importantly, they have decided to not be responsive or even care. I think those days are over. 

I think it'll be a combination of focusing on supply costs and labor costs. But then, I think separately, there's got to be some relief on the part of the federal government on the Medicare side. While we may not get as much as we'd like, I'm hopeful that we'll get something.

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