Are ASCs becoming less physician-friendly?

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ASCs are known as nimble, physician-centric organizations founded by surgeons who wanted more control over the surgical episode and patient experience. They often attract new partners and cases because they can cater to surgeon requests.

Many of these centers were hit hard by the pandemic and are joining large national chains, health systems or private equity-backed networks for the capital to thrive. As part of larger systems, surgery centers may face new restrictions on equipment purchases or incentives to consolidate supplier contracts. ASCs that plan to remain independent are also assessing their budgets and considering exclusive deals with implant companies to keep costs low.

Will surgery centers become less physician-friendly as a result? ASCs run that risk if they become part of larger organizations and hospital networks, say some administrators.

"It's interesting to see the transformation of patient-centered care and physician ownership as surgeons have historically broken from their hospital-only strongholds to fund their own centers and are now rejoining the shared management model, including, yet again, the hospitals," Cherilyn Smith, administrator of St. John's Surgery Center in Fort Myers, Fla., told Becker's. "When the focus is taken off of the patient and placed on the dollar, the foundations will certainly fracture."

Robert S. Bray, MD, Newport Beach, Calif.-based DISC Sports & Spine founding director, sees several advantages to retaining independence.

"In the higher-acuity market, such as spine and joint, the ability to maintain your own quality protocols and personalized service is a significant plus to the patient population," he told Becker's. "While the major purchasing power and contracts of the large chain are certainly a plus, those physicians lose controlling interest and give up secondary management fees."

During the pandemic, he said DISC as an independent entity experienced significant growth because it could rapidly develop protocols, support employees and streamline the decision-making process based on what physician owners felt was best.

Vincent Hayes, COO of Bradenton-based Florida Digestive Health Specialists, said he's heard from physicians who sign contracts with management companies or hospitals and then have second thoughts or experience burnout. His group plans to remain independent after experiencing growth in the last year, he said.

"When COVID-19 hit, our teams selected and launched a new telemedicine system in one weekend," he said. "And while other health systems cut physician salaries, we onboarded seven new gastroenterologists and opened two new clinics. We're able to keep operational costs low, streamline administration tasks and use our large market share to negotiate better reimbursement rates. Our patients also benefit from improved access and continuity of care."

Selling an independent center to any buyer will result in changes. Private equity companies are a newer type of investment that could affect how ASCs operate, and while some physician groups and ASCs report success, others are wary of offers that may not put physician partners and patients first.

Richard Lee, MD, an ophthalmologist with Oakland, Calif.-based Eye MD Laser & Surgery Center, told Becker's he has had several offers from private equity firms but has decided not to sell because his philosophy didn't match with the investors' vision for the center.

"Surgery is based on the best interest for patients, not what's in the best interest of the enterprise. Private equity companies will say they are concerned about patient care, but the bottom line is they're motivated by profit," he said.

Howard Leibowitz, MD, an internal medicine physician at Access Family Medical Clinic and Avera Medical Group Worthington (Minn.) said: "Private equity investment is a double-edged sword. It's good in the sense it provides capital to expand and update equipment, but it's bad when it removes physician control and makes return of income the overriding mentality."

The decision-making process for instruments and implants can be a sticking point for ASCs, which traditionally have been able to accommodate special requests. New robotic technology is expensive, and ASCs may not be able to purchase it.

Orthopedic surgery and general surgery centers in particular are feeling pressure to purchase robotic technology to accommodate surgeon requests. Claudette Fox, administrator of Short Hills Surgery Center in Millburn, N.J., said general surgeons at her center are requesting a robot for laparoscopic cases. She has two concerns about the technology: high costs without extra reimbursement and adding time to the surgical cases.

The center's surgeons also perform total joint replacements without a robot.

"ASC profits are primarily driven by case volume. Robotic surgery falls out of the ASC business model unless payers are willing to reimburse appropriately," she said. "It is a conundrum, since the hospitals are pushing joints to outpatient settings."

Alfonso del Granado, administrator of Covenant High Plains Surgery Center in Lubbock, Texas, said during the Becker's ASC Virtual Event in October that early career surgeons now want to use the robot, and his center is purchasing one to avoid losing their cases.

The convenience physicians experience at ASCs compared to hospitals also remains a top priority for centers.

"The ASC industry started as a means for surgery specialists to secure [operating room] time without worrying about running over scheduled time or being 'bumped' by surgeons whose specialties were more prone to emergencies and/or were more lucrative to the hospitals," said Donald Lenz, administrator of Eye Surgery Center of New Albany (Ind.). "These visionaries saw the opportunity to have more input into how their patients received their care and a return on their investments."

No matter the arrangement, ASCs need the flexibility to accommodate physicians and their requests for a high standard of patient care to attract cases and thrive as part of the healthcare delivery ecosystem.

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