In a recent Becker's Healthcare Podcast episode, Jeff Andrews, Chief Operating Officer at Regent Surgical Health, discusses ASC trends and outpatient care in a post-pandemic world. The discussion focused on how Regent is advancing employee engagement and talent retention, and addressing reimbursement for its growing portfolio of centers nationwide. A transcription of the podcast is available below, and the episode can be listened to here.
Scott Becker: This is Scott Becker with the Becker's Healthcare Podcast. Thrilled today to be joined by the one of the leaders and one of the fastest growing surgery center chains in the country, Regent Surgical Health. We're joined today by brilliant Chief Operating Officer, Jeff Andrews, and Jeff is gonna talk to us about what he sees for the surgery center industry over the next several years. Jeff, before I get started, can you take a moment and introduce yourself and maybe tell the audience just a little bit about Regent?
Jeff Andrews: Scott, thank you. Really appreciate you having me on your podcast today. I am a veteran, I would say, of the surgery center industry. I started my career back in the early 2000’s with a surgery center company in Phoenix and migrated my way through the industry, ended up at USPI for about 16 years and led a lot of the operational initiatives that we implemented there over time. And then ended up over here at Regent about a year and three months ago. And I'm happy to be over here.
SB: Well, fantastic. And we find ourselves in a very dynamic healthcare environment to say the least. Take a moment and talk about sort of, there's huge economic ERs facing health systems, flattening reimbursement, but increasing staff costs and all kinds of costs increasing, so really hurting the margins of major enlarged health systems. How do ASCs fit into the short and long term plans for recovery and ultimately sort of a sustainable healthcare model in our country?
JA: Thanks, Scott. I think there's really a few ways that we can do this. I'd like to start briefly with the short term and then I'll move into the long term. As you mentioned, hospitals across America, they are absolutely in recovery mode from Covid. Making an ASC strategy work today is really a nice to have. I would say there's no doubt that our environment today is very difficult. These health systems that we work very closely with, they need every surgical case today to help fill very big income statement deficits. In some recent conversations I've had with some health system executives, they've really seemed to point towards a focus of a renewed need towards alignment with physicians around an outpatient surgery strategy. And speaking of alignment, they've also expressed some concern about the rise they're seeing in private equity activity with respect to key physician groups.
So where do ASCs fit in all of this? Strategically aligning with these physician groups other than an employment model allows them to become very proactive with an ambulatory strategy. And I say proactive, because sometimes the sentiment can be, well, I'm gonna wait for the physicians to come talk to me about an ASC versus the system approaching the physicians as a way to make them more efficient and more effective longer term, 18 months or so. An ASC strategy is a must today, there are a lot of ASC procedures still being done in a hospital, but it's only gonna last a little while longer. I was speaking with a health system ambulatory leader the other day about the large number of, of GI, ENT and ophthalmology cases that are still being done in several hospitals. There is no doubt that these procedures will migrate to an ASC setting based on the proactive hospital strategy I'm speaking of.
SB: And take a moment, Jeff, when you see this migration, and I want the characterization of a “want to have” versus “must have” and that kind of movement. Talk for a moment about the evolution. How do you view the impact of value-based reimbursement models on the ASC and the surgery center industry? How do you view that?
JA: Scott, it is a great question, and, and as you're aware, value-based care is always a hot topic and will be for a while and has been for a long time. it's a topic I jokingly refer to as a unicorn. It's always close, but it's always elusive. ASCs without any special managed care arrangements, in my opinion, are by nature value-based care with the constant scrutiny of a healthcare dollar. The low cost ASC setting really does extend the healthcare dollar with more and more cases to be performed in this setting, thus increasing the value of this healthcare segment. And as you know, Covid really proved that higher acute cases can safely be done in surgery centers. Additionally, the ASC industry is well positioned to identify bundle payments specific to existing specialties around orthopedics, spine, and cardiovascular to name just a few. And lastly, I would say more and more ASCs are becoming equipped with the latest technology to perform more complex procedures, thus supporting the premise that are naturally a value-based care solution.
SB: Thank you. I mean, certainly lower cost, high value, good outcomes. Talk about predictions for the space, for the surgery center area over the next several years, next five years or so, and what are some of the emerging themes and trends you'll be watching?
JA: Scott, I'm glad you're asking. Unfortunately, I wish I was a weatherman, it feels like you're asking me to predict the weather. The ambulatory space from my perspective is well positioned for the future, as we just touched on the out migration of traditional hospital surgeries moving to outpatient, not only driven by the health system leaders in their strategy, but also by the demand of a more educated patient about what they really want here. Here's a few things to look out for. it's been discussed on several of your previous podcasts, but the focus around cardiovascular in a surgery center, big questions for health systems come when you start having this dialogue around when do we start the planning? Who do I call to help execute this? And what is the timing of an execution plan?
My advice is to be ahead of the game or the physicians will beat you to it. Regent has built our own team of CB experts to be a thought partner to try and help inform our current partners on the strategy, but also how we can help assist the other health systems today that are contemplating this or thinking about doing this in the future. Second, we are entering a time with private equity becoming more aggressive about practice rollups. I'm hearing that from my health system executives that I work closely with. I'm also hearing that from physician groups that are both employed and independent, that are expressing their interests in, or exploring, PE alignment. Physician engagement is absolutely at an all-time high to navigate on how to keep these physicians aligned with the health systems. The ambulatory strategy is an excellent way to do that.
And we've seen that across the industry and we've seen that here at Regent. Lastly, I see some changes with how anesthesia's engaged at the surgery center level today. There's a real meaningful shortage of providers, anesthesia providers, creating coverage issues at hospitals and ASCs, anesthesia stipends that exist at our hospitals and health systems today. They are putting a downward pressure when it comes to staffing at the ASCs that are creating some unusual conversations around an ASC stipend that really our industry hasn't had to deal with before. This could become an economic issue for some surgery centers to maintain their profitability. And it's something that all ASCs should be talking about and thinking about if they haven't. And we are embarking on that same conversation here at Regent on how we can align with anesthesia groups or explore how stipends are working.
SB: Thank you. So this issue of both CV orthopedics, what the movement looks like, this issue of anesthesia stipends where only certain systems can really afford anesthesia stipends makes a big issue when there's a huge shortage of anesthesiologists, CRNAs and so forth. You’re a leader of a high growth company, a high, high growth surgery center management company. You talked a little bit about some of these challenges in your discussion, but what are some of the big challenges facing the industry today?
JA: Scott, thank you. Great question. I want to give two main challenges that I see, but I know there's many more out there. First, I want to talk about employee engagement. I believe that as an industry, we have placed a lot of emphasis around physician and patient experiences. While absolutely necessary and worthy of our time, it feels a little to me that healthcare employees have taken a backseat to the others. Now, listen, I am not implying at all by any means that the employees are forgotten or that the work isn't being done on this very important topic. But rather I'm implying if we can continue to find ways to unlock our engagement with the workforce outside of pay increases, outside of stay bonuses, that our patient and physician experience will improve rapidly. I think there is, and we all know this, this is not an epiphany.
There's a great deal to burnout among clinical employees post-Covid causing us to engage different, how do we do that? Obviously, it'll be different for every ASC organization, but at Regent we've started a journey that includes some career advancements for our clinical teams, more flexible work schedules and a formal engagement program to improve retention and attract top talent. Second, absolutely reimbursement. We've touched on the possible anesthesia stipend issue a little bit, thus raising the surgery center cost as technology advances and more procedures are able to be performed in these ambulatory settings, cost will also rise for the surgery centers precipitating the need for more collaboration with the payers to better understand site of service pricing shift and ultimately offset the increase of cost for the ASC.
SB: Thank you very, very much. So a lot there in terms of both reimbursement and staffing. And Jeff, you've had this remarkable career in the surgery center space dating back from the surg days a long time ago. What are you most excited about currently? What are you most focused and excited about?
JA: Thanks for asking. I will tell you, and obviously the listeners, this industry is ahead of us. The history has been here, surgery centers have been around for a long time, going back to the first one in Phoenix. And I will tell you, I think the future is ahead of us still. The hospitals are needing or kept capacity to do higher acute patients. They are needing those ORs to do sicker patients, take care of sicker patients. Whereas the industry today that we're in is positioning itself and has positioned itself to take on higher acute patients at a reduced cost to the system. And I think as we open up the door to new specialties, new procedures, CB's a great example. Nobody five years ago thought about cath labs going away and doctors shifting that into a surgery center or their office-based labs moving over into a surgery center. There will be more and more opportunities like that over time. And I believe this industry has got a whole other world ahead of it and is going to expand even more from where it is now to be that critical piece for health systems across the country.
SB: Jeff, I want to thank you for taking the time to visit with us at the Becker’s Healthcare Podcast. Always a pleasure to visit with you at a remarkably great company, Regent Surgical Health. Thank you for joining us, and the Becker's Healthcare Podcast. And thank you for your time.