Growing an ambulatory surgery center (ASC) network in today's competitive healthcare market can be a challenge. Phoenix-based Banner Health proactively mapped out its strategy to build an ambulatory surgery center network and partnered with Atlas Healthcare Partners (Atlas) to see it through.
During a session sponsored by Atlas at the Becker's Hospital Review 9th Annual CEO & CFO Roundtable, Aric Burke, Atlas' CEO, discussed Atlas' joint venture with Banner Health to expand Banner's ASC network.
Three key insights were:
1. Have a clear joint venture ASC strategy. Atlas' mission is "providing exceptional care and outstanding customer service to every patient, every physician, every time," and its vision is being the "partner of choice for the world's best health systems and physicians." Atlas' strategy is to form joint ventures with health systems to develop and manage the health system's ASC network. Atlas' joint venture strategy consists of:
- ASC network development: Develop a network of high-quality, convenient and affordable ASCs for patients in the health system partner's market and enhance geographic and specialty coverage.
- Physician alignment: Build strong physician alignment in surgical center partnerships and create long-term health system relationships with employed and community physicians.
- Market share gain: Increase outpatient market share to align with or exceed overall health system market share and deliver a strong return on investment.
Atlas also works with health system and physician partners to create growth strategies for each ASC that focuses on recruiting and retaining physicians as well as network alignment. Atlas develops and executes these strategies by providing expertise and management to support its partners in optimizing profitability driven by strong managed care contracting, revenue cycle performance and supply chain, labor management and overhead cost containment.
2. Attracting physicians requires providing the culture, equipment, staff and return on investment that they seek. Atlas focuses on building a strong team, a great culture and a positive employee and patient experience. "Doctors come to ASCs for OR time and to align with their health system," Mr. Burke said. "Culture matters to doctors; bad morale will keep them away. We work hard to provide great service, the right staff and equipment and the return on investment they expect. They want to make one good decision from both a professional and investment standpoint and stick with it for the long term."
3. Because of this joint venture, Banner Health has more than doubled its ASC network and projects additional growth. In 2018, Banner Health operated 8 ambulatory surgery centers — six in Phoenix and two in Northern Colorado. Today, Banner has 23 ambulatory surgery centers: 17 in Phoenix, three in Northern Colorado, three in Tucson and eight more under development.
Banner's eight legacy ASCs have increased their number of cases by 45 percent, annual revenue by 122 percent and EBITDA by 311 percent. The new ASCs opened during the joint venture have increased acuity and expanded service lines to include spine, total joints and cardiovascular as well as improved the payer mix and renegotiated commercial rates. Over the next five years the joint venture is projecting substantial increases in case volume, rerevenue, and earnings.
Earlier this year, Atlas began work with a second joint venture and plans to identify other nonprofit health systems to partner with in growing their ASC networks.
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