Where ASC chains see major financial opportunity

As big healthcare companies, payers and investors turn to bundled payments, ASC chains are looking to value-based care systems in an effort to lower costs and improve care quality. 

Many leaders feel ASCs are in the perfect position to adopt value-based care models because of the cost-efficient procedures surgery centers can offer. 

"The payers are now interested in discussing bundles on some of the higher spends that can be done in the outpatient setting," Jeffrey Flynn, administrator and COO of New York City-based Gramercy Surgery Center, told Becker's. "Joint replacements, bariatric and some general procedures are all on the table for discussion. With the bigger push to move procedures out of the hospital, many of us are in discussions for bundled payments with a boost in the reimbursement to bring it to a more cost-efficient setting."

For surgical specialties, value-based care makes up 5.54 percent of total revenue, according to the Medical Group Management Association's report, "Patient Access and Value-based Outcomes Amid the Great Attrition." But this number will likely grow as the healthcare industry as a whole moves towards bundled payments. 

ValueHealth is a key leader in bringing value-based care to the ASC setting. The company offers a value-based delivery system of hyperspecialty surgical programs, including bundled payment arrangements, provider risk-readiness and reinsurance solutions, automated claims administration and a surgery benefit program. 

The company is partnering with ASC chains and health systems to accelerate value-based care adoption. In May, ValueHealth and Brentwood, Tenn.-based Surgery Partners announced a partnership to expand access to high-value surgical care. The partnership will build ASCs and deploy ValueHealth's surgical programs at Surgery Partners' current and in-development locations.

Earlier this month, ValueHealth also partnered with Chillicothe, Ohio-based Great Seal Medical Group to develop several ASCs throughout Ohio and across the upper Midwest region. The joint venture will begin with a multispecialty ASC with orthopedic services powered by ValueHealth's Muve program, which provides value-based outpatient total joint replacements.

Private equity is following suit. In May, private equity-backed practice management company Orthopedic Care Partners bought an ownership stake in value-based care company ValueHealth's ASC in the Villages, Fla.

In March, Optum, parent company of ASC chain SCA Health, acquired home healthcare business LHC Group for around $5.4 billion, aiming to strengthen Optum's ability to provide value-based care. In June, Optum Ventures, CVS Ventures, Anthem and HLM Venture Partners announced they are investing in CareBridge, a value-based healthcare company for patients receiving home and community-based services.

UnitedHealth Group, Optum's parent company, is already seeing financial impact in the transition. UnitedHealth Group saw double-digit revenue growth in the second quarter driven by continued member growth under UnitedHealthcare and value-based arrangements at Optum Health, according to the company's second quarter 2022 earnings report released July 15.

Value-based care is also growing in the spine and orthopedics sector, a main driver of many ASCs' revenue. 

Phoenix-based Healthcare Outcomes Performance Co. is a private equity-backed musculoskeletal practice management and value-based care platform that partners with musculoskeletal practices, health systems and payers to develop value-based care programs. 

The company has affiliated with orthopedic practices in Michigan, Arizona, Florida and Nevada and expanded relationships with health systems and payers in the last year. 

Notably, HOPCo affiliated with Florida Blue, the state's Blue Cross Blue Shield arm, to develop a network of physicians and facilities to participate in HOPCo's Musculoskeletal Outcomes Management Program and risk-shared incentives.

Many leaders also predict the shift will accelerate ASC acquisitions and industry consolidation. 

In the next five years, "health systems and national ASC management acquisition of existing ASCs will occur at a faster rate to meet value-based reimbursement requirements and a lower-cost delivery system," Liliana Lehmann, president of Fort Lauderdale, Fla.-based Axis HealthCare Partners, told Becker's.

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