How ASC competition has shifted over the last 5 years

Seven ASC leaders spoke with Becker's to discuss how competition in the ASC industry has shifted in the last five years. 

Editor's note: These responses were edited lightly for clarity and length. 

Paul Doelling. Director of Mohr Partners (St. Louis): Competition has shifted the ASC industry. Competition is now with [real estate investment trusts] getting involved, purchasing more ASCs than in the past. This is the case where I have been working, and I think it is due to Medicare shifting more procedures to the outpatient side, and now physicians can do more expensive procedures, such as knee and hip implants. Hospitals will continue to be involved too in order to maintain some control over the facility in terms of the building ownership or lease.

Kimberly Brown, MD. Chief of gastroenterology at the Henry Ford Health System (Detroit): I feel the competition has slowed in the last five years mostly due to the pandemic. Hospitals and ASCs had to work together to help take care of the patients needing surgery since the hospitals were canceling all elective surgeries. Also ASCs in my area worked together to make sure we had the supplies needed to continue to perform procedures.

Liliana Lehmann. President of Axis HealthCare Partners: 

  • An increased demand for ASCs due to the influx of COVID-19 patients to the hospitals and thus limiting elective surgery 
  • An increase of hedge funds interest in the ASC environment
  • Health systems developing ASCs under joint ventures with physicians at a faster rate

Andrew Lovewell. Administrator of The Surgical Center at Columbia (Mo.) Orthopaedic Group: Over the course of the last five years we have seen massive shifts in cases from the hospital setting to the ASC. This has created competition amongst ASCs, as well as ASCs and hospitals in key markets. The key levers that have created such full scale shifts outside of COVID-19 are related to the Medicare inpatient-only list becoming more relaxed under the previous administration as well as the evolution of safe care in the outpatient setting. I don't think any of us could have predicted the rapid acceleration that COVID-19 created as well. For example, in many markets, ASCs realized growth overnight due to advanced restrictions at the hospitals or simply the lack of beds available. Another point to be made related to the shift in cases is the shift in expectation of the modern patient. Over the last five years, many patients have shifted their mindset and realized that with high deductible health plans that they are paying more of the bill and need to be savvy consumers. Many patients needed to find lower cost alternatives and ASCs fit that niche. 

Andy Poole. Manager of ASC business solutions at ECRI (Plymouth Meeting, Va.): While there is variation within the different markets, the largest competitive element in the ASC industry over the past five years has been the competition for talent, specifically surgeons and nurses. This has dramatically increased since the start of the COVID-19 pandemic and the "Great Resignation," and given the projected staffing shortages, this will continue to be a key point of focus in the future. Expect to see centers using traditional and innovative elements (technology, compensation and benefits structure, work environment) to bring in and keep the top providers. 

Much of the emphasis on competition for patients has been driven by technology, such as laser cataracts and robotics. This also has become more prevalent as a larger number of ASCs are implementing new technologies to recruit new providers and transition procedures typically done at the hospital to their center. 

Brian Bacot, MD. Orthopedic surgeon at Comprehensive Orthopaedic Global (St. Thomas, Virgin Islands): The major shift in the ASC industry is its overall utilization in the healthcare arena. The overall cost savings and improved patient satisfaction has driven more and more procedures into the ASCs and away from hospitals which are less efficient and have lower satisfaction measures. The recent pandemic has emphasized the importance of ASCs in the delivery of safe and efficient healthcare.

Martin Roche, MD. Director of Arthroplasty at HSS Florida (West Palm Beach): I believe more joint arthroplasties are transitioning safely to the ASC. Even with patients that we do in a hospital setting, most still go home the same day. This requires an excellent perioperative team and a motivated patient. The competition is now seeing hospital joint ventures with physicians as they need to be part of the new paradigm in orthopedic care. ASC operators continue to merge — this will give them leverage on costs as the reimbursements are up 40 to 50 percent less in some geographies. 

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