What's ahead for ASCs? Tallahassee Orthopedic Clinic CEO weighs in

As private equity and value-based care continue to boom and more procedures migrate to ASCs, many leaders expect changes in how health systems, hospitals and ASCs are run in 2023. 

Michael Boblitz, CEO and chief strategy officer of Tallahassee (Fla.) Orthopedic Clinic, recently connected with Becker's to discuss how healthcare management is evolving. 

Q: How do you expect the health system/hospital/ASC ownership structure to shift in the next year?

Note: This response was lightly edited for length and clarity.

Michael Boblitz: Market forces continue to shift towards lower-cost settings of care with ASCs front and center.  

Employers are beyond frustrated with the never-ending rise in premium costs to administer healthcare benefits to their employees and beneficiaries. Payers are under attack as a result and beyond frustrated with provider networks for not being able to aggressively respond to the pressing desires to lower the overall cost of care.  

The employers are beginning to seek direct-to-provider arrangements that guarantee care in the lower-cost ASC setting and thus reduce the spend by at least 30-40 percent per case (relative to hospital-based surgery).  

Payers are thereby scrambling to create: 1. New payer policies that no longer cover certain elective outpatient surgery in hospital-based settings, and 2. Building "in-house" provider networks that include ASCs with a laser focus on moving patients to lower cost settings — fast.

Several states are also responding to the rapidly rising costs and related employer frustrations by going even further to consider abolishing the certificate of need law that has preserved hospital-based surgery, and restricted the ability for more ASCs to be built and help reduce cost of care. Some states, such as Florida, already implemented this change.

As Newton's third law has always stated, "Every action creates an equal and opposite reaction," and to no surprise hospitals are trying to react to the same market forces and making modest investments in ASCs, but at a very slow pace.

Over the next year and beyond, the tailwinds will continue to fuel the growth of ASCs with employers and payers leading the charge and hospitals running behind trying to keep up and stay in the game.  

I envision the structure to swing towards pure surgical practice ownership without any joint venture arrangements that may include non-provider capital lending and certainly the continued opportunity to partner with private equity firms.

Looking further, the joint venture ASC model will shift from traditional hospital/surgical practice arrangements to payer and surgical practice partnerships with direct-to-employer bundled pricing coming along for the ride. 

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