Can independent ASCs survive? What specialties are still great and which will grow? 10 key ASC industry questions answered

Becker's Healthcare Publisher and McGuireWoods Partner Scott Becker moderated a panel at the Becker's ASC Review 24th Annual Meeting: The Business and Operations of ASCs on Oct. 27 discussing the biggest industry trends and challenges.

The panel included ASCA CEO William Prentice; McGuireWoods Partner Melissa Szabad; Physicians Endoscopy President and CEO Barry Tanner; and ASCOA CEO Luke Lambert. Here are 10 key questions from the panel.

1. How can ASCs thrive today? "There are three things surgery centers do well and we have to make sure we really excel in these areas. One is productivity for the physicians who work there. Typically, they'll see a 100 to 150 percent increase in how much work they can get done in a period of time. If you can deliver that, that's one of the legs the ASC can stand on. The other is you've got to save money for the payer. If you can go to the payer and say, 'We can take these more expensive cases out of the more expensive hospital and into a center if you work with us on this reimbursement' and that's very powerful. The third is the patient experience we can deliver and typically we do. It's higher quality care and a superior patient experience. Together, that builds your base," said Mr. Lambert.

Mr. Lambert also advised centers to revisit opportunities that might not have worked in the past. Opportunities change over time, and just because it wasn't available two or three years ago doesn't mean the same is true today. "It's that persistence, understanding what your strengths are and then looking outward and saying how do I work with this environment. Can I get involved in a bundle where we can provide care at a lower cost and be able to have cases come into our center that we weren't before? Those are all things that we need to be actively looking outward and figuring out how to be involved in this new environment."

2. Can the independent ASC survive? "I think it will be depending upon the market and the ability of the leadership of that surgery center to pay attention to their market and to learn from other surgery centers that have thrived successfully in that way. I think there is always going to be a niche where independent surgery centers are going to do very well. That said, I think aligning yourself with someone like Luke or Barry and all the knowledge and experience they bring is very valuable for a surgery center. Clearly both models can work and in the regulatory framework we have right now, I think both can survive," said Mr. Prentice.

3. How do the most successful ASCs approach leadership? "It is a full-time job to run a surgery center so you have to have a unique set of physicians who are willing to put in the extra time and effort, who are very business savvy minded, to make their surgery center grow. I think coupled with that, having a really experienced, involved, motivated administrator is key to that as well," said Ms. Szabad.

4. What specialties are still great in ASCs? "In terms of specialties that work well, we still have great centers in ophthalmology, orthopedic and GI. What is more important than the specialty itself is the surgeons you are working with. If you are working with accomplished, busy, successful surgeons, that makes all the difference. If you're working with folks who have more of an academic outlook that aren't accustomed to having productivity oriented to their practice, those are typically surgeons that are more challenging to have success with," said Mr. Lambert.

5. What specialties are poised for significant growth? "Pulmonology is an area where we might see significant growth over the next five to 10 years," said Mr. Tanner.

6. Will cardiology and vascular surgery make inroads into the ASC? "It's all going to be clinically driven. Based upon the surgeon's skills and belief that this can be done safely in the outpatient setting and ASC," said Mr. Prentice

"We are seeing more of the cardiac procedures, more of the total joints. It's not growing by huge percentages, but it is growing over time," said Mr. Lambert. "Stents are not something we are doing ourselves right now. I have heard other people in the industry heading in that direction and doing more advanced cardiac procedures."

7. Will independent centers disappear with the proliferation of narrow networks? "We've had centers that felt like they had to align with hospital systems as the market was carved up into narrow networks and if they weren't part of a network their referrals were going to be cut off. That has been a challenge in some markets, but in terms of independent centers disappearing, I would say not. I've seen the number of ASCs being acquired by hospitals and what happens after acquisition. I can't think of any centers that were acquired by a hospital and then became enormously successful; usually it's the opposite and they fall apart," said Mr. Lambert.

8. When can hospital partnerships be effective? "Of our 60 centers, approximately 25 of them have a hospital partner. We started doing it 10-plus years ago. It was somewhat defensive at the time; as we looked at the crystal ball and saw reimbursement changing, we wanted the hospital to have a vested interest in the outcome of the surgery center and have a seat at the table with us so we could collaboratively bring cost down in the system and drive quality of care. Roll the clock forward 10 years, I think now we include the hospitals because we think we want to work with them and not against them in the market," said Mr. Tanner. "What we are trying to do with the hospitals and payers is say look, we have a value proposition here. We can deliver savings with a high quality of care. We don't need every single dollar of savings to come to us. Somehow, some way, everyone needs to get a win out of this. So if hospitals are incentivized to move cases from the HOPD to ASC, they should be rewarded for that because they are effectively saving healthcare dollars."

9. How does value-based care change the hospital's relationship to ASCs? "If the hospital is going to control the primary care referral source, you would like them to partner with the surgery center because even the hospitals know that we have a high-quality service at a low cost and as the hospitals themselves move toward more risk bearing contracts, it behooves them to get the care in the right setting for the lowest cost. With their referrals they have to make sure they save money with their risk bearing contracts, so part of this collaboration I alluded to is to have them on our side and work together to make sure the referral base stays solid," said Mr. Tanner.

10. Which is more desirable: single or multispecialty ASCs? "If we have a single specialty center, we tend to generate above average levels of efficiency for that specialty, but we have a number of centers that might have three substantial specialties within the center, and that has proven to be very effective. If you have a group of five ophthalmologists, five OBs and five orthopedists, that could be a very terrific center. Our single specialty centers, for all of their efficiencies, they don't tend to make very good use of the physical plans of the center because there are only so many specialists within a given specialty and geography, but if you can get in other specialties you can get the overall facility utilization much higher," said Mr. Lambert.

 

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