Four ASC leaders joined Becker's to discuss the biggest obstacles to ASC ownership.
Question: What are the biggest obstacles to ASC ownership right now?
Editor's note: These responses were edited lightly for brevity and clarity.
Jeff Baird. Former Administrator of Willamette Ear, Nose, Throat & Facial Plastic Surgery (Salem, Ore.): Buy-in costs for new providers can be overwhelming, especially if they just bought into a practice. Make the path to ownership less costly with sweat equity and/or incremental buy-ins. Additionally, management of smaller ASCs can be hard to staff with the appropriate number and or level management personnel which can create significant downstream risk across the board.
Susheela Bala, MD. Owner of ACE Endoscopy Center (Rialto, Calif.): Costs of running an ASC because of the increase in personnel and supply costs with no increase in ASC reimbursement. When we recently tried to negotiate with Blue Cross, they increased the facility fee by $20, which does not cover even inflation.
Alejandro Fernandez. CEO of Synergy Orthopedic Specialists (San Diego):
- Capital investment: Establishing and operating an ASC requires significant upfront capital investment. This includes facility construction or lease costs, equipment procurement, staffing and ongoing operational expenses. Securing funding for these investments can be challenging, especially for individuals or groups without access to substantial financial resources.
- Reimbursement and payer negotiations: ASCs rely heavily on reimbursement from government programs like Medicare and private insurance payers. However, negotiating favorable reimbursement rates with payers can be difficult, and reimbursement policy changes can significantly impact an ASC's financial viability.
- Physician recruitment and engagement: Recruiting and retaining skilled physicians and surgeons is crucial for the success of an ASC. However, competition for talented practitioners can be fierce, particularly in areas with high demand or limited physician supply. Building relationships with physicians and ensuring their active involvement in the ASC can be challenging.
- Market competition: ASCs face competition from other healthcare providers, including hospitals and larger healthcare systems. These competitors may have greater resources, stronger negotiating power with payers and broader referral networks, which can make it challenging for ASCs to attract patients and secure a steady stream of cases.
- Regulatory compliance: ASCs are subject to a multitude of regulations at the federal, state and local levels. Meeting these requirements and maintaining compliance can be complex and costly, particularly as regulations continue to evolve.
Bo Neichoy, MD. Bariatric Surgeon at Florida Coast Weight Loss Center (Palm Coast): I feel that the biggest challenge to ASC ownership is changing the perception that procedures can be done in the ASC setting. Our center does a lot of bariatric surgery, and that is a service line that most centers feel uncomfortable about. The service lines that are easy to gain ASC acceptance are not always very profitable (hand surgery, plastic surgery, podiatry, etc). If you fill your roster with these types of surgeons, you might limit your profitability in the long term. The other struggle is the employment of surgeons by healthcare systems that basically block them from performing procedures in the ASC setting. The decline of private practice finances will be the ultimate challenge to ASCs (that are not hospital-owned).