California’s ASCs play a crucial role in expanding patient access to high-quality, cost-effective surgical care, but financial sustainability remains a pressing concern for many leaders.
Bradley Heaton, CEO of the surgery center division at Sacramento, Calif.-based Sutter Health, joined Becker’s to discuss the biggest challenges facing California ASCs today.
Question: What factors are most impacting financial sustainability of ASCs in your state?
Brad Heaton: There are several factors affecting ASCs in California today, and it’s really exciting to work for Sutter Health, which has the vision to become the most comprehensive, integrated, and connected health system for getting and staying well. The ASCs within our system are a critical part of that work and what we’re trying to accomplish as a health system.
ASCs in California are facing challenges like anesthesia shortages, clinical staffing shortages, and inflation — particularly with the rising costs of supplies, equipment, and even new construction for building or expanding ASCs. As part of Sutter Health, we work to leverage our operational performance, reinvest, plan and navigate those challenges as a system.
We do have strategies to address the anesthesia shortages, clinical staffing shortages and inflationary pressures. Despite these challenges, ASCs in California are still growing, and we continue to add more ASCs — both within Sutter Health and outside of it.
Q: How would you characterize the current market dynamics of ASCs in your state in terms of competition and consolidation?
BH: ASCs are growing in California. There are more than 800 ASCs in the state today, and the need for them continues to grow. Patients are looking for a place that is affordable, provides high-quality care, is efficient and is close to home. ASCs meet that need for the patients and communities we serve.
…We’ve also seen that, in California, more and more patients are actively looking for this kind of care. Because of that demand, we’re approaching care delivery in a more organized and collaborative way across the continuum of care. We’re asking: How do we meet patients where they live and provide care in their communities? Not just from a surgery center perspective, but also by integrating primary care, specialty care and urgent care. How do we coordinate their labs and imaging in a local setting so that all of their healthcare needs are met conveniently?
Q: Aside from CON laws, are there any state-specific regulations or legislative initiatives that are either helping or hindering ASC expansion in California?
BH: I think policymakers across the state, and even the nation, are working to create more efficient, accessible healthcare for patients. The legislative process plays a role in that, with regulatory oversight influencing how care is delivered.
Sutter Health is actively engaged with policymakers and industry leaders to identify and address barriers where they exist. One example is the approval of cardiology procedures in ASCs. In 2019, Medicare approved both diagnostic and interventional cardiology procedures to be performed in an ASC setting. Today, over 45 other states have adopted those procedures and are successfully performing them in ASCs at a lower cost, with greater efficiency, and with the same high quality of care.
However, in California, state law requires legislative approval for these procedures to be performed in an ASC. This is something Sutter Health, along with other organizations, is working to address. We want to expand access for patients who need cardiac care in an ASC setting, but that requires engagement with our legislative bodies to move forward.
