Why ASCs could be health systems' ticket to growth

New Hyde Park, N.Y.-based Northwell Health is heavily expanding its outpatient portfolio to increase market share, CEO Michael Dowling told Becker's Hospital Review.

"If you're relying on the hospital to be the core provider of the future, you're going to lose," he said. "You've got to take a little bit of a hit by going out and expanding your ambulatory presence. But the more you expand ambulatory and grow in the right locations, the more you increase market share, which brings more of the necessary inpatient care back to your hospitals."

Northwell Health has 23 hospitals and 890 outpatient facilities. Many hospitals are looking to ASCs and outpatient surgery to offset these losses and boost revenue, particularly as surgery is increasingly migrating to the ASC setting. 

"Our biggest growth is in outpatient care. A lot of surgeries are moving outpatient, so we have to get ahead of that," Mr. Dowling added. "Some think we are only a hospital system, but only about 46 percent of our business is from our hospital sector today."

Northwell is looking to neurosurgery, orthopedics, cancer and cardiac lines as key areas for revenue growth, but the system is also focused on expanding into new geographic areas and markets.  

Northwell is not the only health system following this trend. One-third of hospital revenue is shifting to ASCs, office-based labs and other outpatient sites, according to JLL's "Healthcare and Medical Office Perspective" report. Inpatient discharge declines, health system competition in high-growth markets and innovative technologies are fueling a shift to ambulatory settings, the report said.

Mike Slubowski, president and CEO of Livonia, Mich.-based Trinity Health, which comprises 88 hospitals across 26 states, told Becker's that ASCs are a huge growth opportunity for the system. 

"You have to shoot to where the puck is going, and ambulatory surgery is rapidly moving to freestanding ASCs, so we have partnerships with a number of physician groups to do freestanding ambulatory surgery," he said. "We're starting to open a lot more freestanding ASCs. Care is shifting away from hospital-based ambulatory surgery as well because patients and payers don't want to cover the additional cost of being hospital-based."

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