How providers, payers and HCOs will drive ASC competition 

Patsy Newitt - Print  |

ASCs will be an asset to providers, payers and healthcare organizations in the coming years, according to Matt Kraemer. 

Mr. Kraemer, orthopedic service line administrator for Northern Arizona Healthcare in Flagstaff, spoke with Becker's ASC Review on how these three players will shape ASC competition.

Question: What are your bold predictions for the ASC industry in the next five years? 

Matt Kraemer: I am confident that the ASC industry will only get more competitive and important for organizational development in the next five years. This will be driven by three things: healthcare organizations, insurance companies and providers.

HCOs will continue to try and drive out costs and retain volumes to help offset the continual shrinking of their contribution margins. One way they can do this is through controlling the volumes and contracts while maintaining the facility fee and improving the patient throughput for those appropriate procedures being completed in the ASC setting.

Insurance companies will also look for HCOs to move some of these historically inpatient procedures to the ASCs — as they are no longer on the inpatient-only lists, and the ASC fee schedule is far less than that of the outpatient hospital outpatient department reimbursement schedule. This means their costs will be dramatically reduced, and it will allow them to reduce their premiums to their members, thus assisting in increasing their market shares.

Also, providers will continue to drive the utilization of ASCs to perform their cases. Improved throughput, as compared to the hospital with a set staff that is familiar with their cases, allows for better case times, turnover times and increased volumes performed in a block day. Participation in some ASCs also allows for provider shares to be purchased, and financial and quality performance also allows for provider participation in a share of the margins.

However, we cannot forget about the patient. The patient desires for the best product, the best outcomes and the lowest cost. Typically the ASC is a pretty sure bet to achieve all of those. Not to mention, the patient is able to avoid being in a hospital setting and potentially exposed to other nosocomial infections. A streamlined registration process, ease of access of the facility, familial setting and a same day discharge home to recover in their own bed is a more commonly requested benefit by patients today and will only continue to grow.

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