The independent ambulatory surgery center model was built, in part, on volume. Fill the rooms. Turn the cases. Keep the schedule moving. But as reimbursement rates compress and payer pressure intensifies, several ASC leaders say that logic has become a trap.
The conversation surfaced at Becker’s Spine, Orthopedic and Pain Management-Driven ASC + The Future of Spine Conference from June 11-13 during a panel on the future of independent ASCs.
“We have to stop chasing volume,” said Kevin Plancher, MD, founder of Plancher Orthopaedics in New York City. “That will put the physician against a lot of administrators and other people. That’s not a good thing. We have to find a better way because chasing volume is a surge to the bottom and it’s just not going to happen.”
The mechanism Dr. Plancher described is straightforward: The more an ASC markets its efficiency — faster throughput, shorter turnaround, more cases per day — the more reason it gives payers to cut rates. He illustrated the point with a story from early in his career, recounting a case he documented carefully to ensure it registered as a two-hour procedure, protecting the reimbursement tied to it. The lesson he drew from it was not about gaming the system but about the danger of letting operational speed define a center’s value proposition.
“The day you start saying ‘I’m more efficient’ and use that word, that is a call, rightfully so, for the payer — ‘more efficient, then I’ll pay you less,'” Dr. Plancher said. “You want to say that you’ve trained for excellence to produce the outcome and however long it takes, it does it.”
The panel reflected a broader reckoning playing out across the independent ASC space. Reimbursement rates from both CMS and commercial payers have fallen below the cost of staffing, anesthesia and implants in many markets. The conditions that made it easy to absorb operational inefficiency a few years ago are gone.
Tricia Wollam, administrator of Alliance Surgery Center, a three-OR orthopedic-only center in Traverse City, Mich., said the margin for error has narrowed sharply — not just financially but operationally.
“Today there’s much less room for that operational error,” Ms. Wollam said. “Now you’re looking at everything — whether it’s staffing, anesthesia costs, implant costs. We didn’t have to deal with that five years ago the way we do now.”
Her response has been to keep her physician owners more deeply informed than ever. That means sharing weekly operational reports, initiating difficult conversations about implant spend and scheduling decisions, and occasionally making calls that are not popular — stacking cases for cost efficiency, adjusting start times — and then walking surgeons through the reasoning afterward.
“I keep my surgeons very informed on the daily operations of the center,” Ms. Wollam said. “Why? Because they’re at the top of it and they started it. And I need to have those conversations with them on their implant cost: What does that look like, what are they willing to give up, what are they willing to want to have.”
These shifts in supply chain decisions and operational belt-tightening can be quick adjustments for smaller ASCs, which may benefit from being able to pivot more nimbly in the market. But workflow advantages do not protect margin on their own. Dr. Plancher’s argument is that the protection has to come from outcomes data.
“We have to lead with outcomes as independent ASCs,” he said. “We have to show that we believe what we say and we have the data to prove it.”
For Ms. Wollam, the case for independence ultimately returns to the question of why the physicians started the center in the first place — and whether they still believe the answer.
“I always just revert back to that whenever there are conversations,” she said. “I always just come back to: Remember six and a half years ago, why? Why did we do this? And I think that just gets us all back on the same page.”
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.