1. The economy
One of the biggest business issues facing ASCs today is something they have little control over — the economy. The bad economy and the resulting high unemployment rates have created multiple challenges for ASCs in recent years. "We've seen a migration to government payors — Medicaid is up as a percentage of revenue," says Kyle Goldammer, SVP of financial services at Surgical Management Professionals. "It's hard to prove, but anecdotally it seems that most of our centers have seen that shift."
Large deductibles and higher rates are stopping those with health insurance from undergoing elective procedures as well, resulting in lower volumes for ASCs. Although plastic surgery centers have taken the biggest hit in volume, ASCs across the country have been affected. Ellen Johnson, COO of Facility Development and Management, notes that she has seen somewhat of a comeback in recent months, but it has not been anything tremendous. "If people are planning elective surgeries and they have a large deductible, they postpone it," she says. Waiting is not always the best solution, however — "wait too long and they run the risk of a more complicated procedure," she adds.
2. Healthcare insurance policy changes
Changes in healthcare insurance policies and reimbursement also have become a business challenge for ASCs. "Insurance companies are not playing the out-of-network game anymore, potentially bankrupting places that rely on out-of-network," says Mr. Goldammer.
Higher deductibles and changes in out-of-network policies affect patients' choices on elective surgeries, thereby affecting patient volume. "At one time, deductibles were a part of all out-of-network plans — now they are found in-network along with higher copays and co-insurances," says Ms. Johnson. These out of pocket expenses, even at an in-network facility causes patients to consider finances more carefully before undergoing a procedure. According to Ms. Johnson, many patients stop and think "do I have the money to pay that even if I'm in-network" before scheduling an elective procedure.
The new policies also mean higher expenses for ASCs. New policies and conditions can require IT upgrades and staff training, which means extra costs for ASCs, says Mr. Goldammer. Higher health insurance costs also mean more expenses for ASCs and their employees for health benefits. And despite the higher costs to patients, ASCs continue to struggle as supply costs and salaries outpace any increase in reimbursements, Mr. Goldammer adds.
3. Access to capital
Another economy-related business challenge for ASCs is obtaining funding. In the current economy, "banks are not lending to one another," says Joe Zasa, managing partner of ASD Management. "The global healthcare reform seems to limit providers, which puts pressure on ASCs." Capital funding is especially hard to get now, with requirements including higher down payments and personal guarantees.
4. Finding physicians and nurses
A major challenge for ASCs today is finding new physicians. Adding new procedures and staying up-to-date on technology is one method of attracting new physicians and nurses, says Ms. Johnson. "How do you find them and keep them?" she says of operating room nurses. "There are not as many experienced ones as before."
As many ASC physicians age out, attracting new physicians is of the utmost importance, but can also be extremely difficult. "There are a lot fewer free agents," says Mr. Goldammer. One reason he cites is that as physician reimbursements decrease, more physicians turn to community hospitals for employment. "Once they are employed by a community hospital, they are locked out of investing in for-profit facilities," he says.
Mr. Zasa believes the number of ASCs is part of the problem in finding new physicians as well. "There are a lot of ASCs," he says. "There are only so many surgeons to support these ASCs."
5. Keeping centers "vibrant"
A further challenge for ASCs is what Ms. Johnson describes as "keeping centers vibrant." This includes keeping centers up-to-date and employees who stay motivated, both of which can be challenging feats.
According to Ms. Johnson, one of the most important ways to keep an ASC vibrant is to "continue to look for opportunities to do procedures that had previously not been available" at the center.
Difficulty in finding physicians and nurses means that finding ways to keep them takes a top priority. According to Ms. Johnson, the best way to do this is to provide employees with an excellent working environment, positive incentives, competitive salary and excellent healthcare benefits — all of which can be difficult as healthcare costs and salary standards go up, but reimbursements do not keep pace.
One of the biggest business issues facing ASCs today is something they have little control over — the economy. The bad economy and the resulting high unemployment rates have created multiple challenges for ASCs in recent years. "We've seen a migration to government payors — Medicaid is up as a percentage of revenue," says Kyle Goldammer, SVP of financial services at Surgical Management Professionals. "It's hard to prove, but anecdotally it seems that most of our centers have seen that shift."
Large deductibles and higher rates are stopping those with health insurance from undergoing elective procedures as well, resulting in lower volumes for ASCs. Although plastic surgery centers have taken the biggest hit in volume, ASCs across the country have been affected. Ellen Johnson, COO of Facility Development and Management, notes that she has seen somewhat of a comeback in recent months, but it has not been anything tremendous. "If people are planning elective surgeries and they have a large deductible, they postpone it," she says. Waiting is not always the best solution, however — "wait too long and they run the risk of a more complicated procedure," she adds.
2. Healthcare insurance policy changes
Changes in healthcare insurance policies and reimbursement also have become a business challenge for ASCs. "Insurance companies are not playing the out-of-network game anymore, potentially bankrupting places that rely on out-of-network," says Mr. Goldammer.
Higher deductibles and changes in out-of-network policies affect patients' choices on elective surgeries, thereby affecting patient volume. "At one time, deductibles were a part of all out-of-network plans — now they are found in-network along with higher copays and co-insurances," says Ms. Johnson. These out of pocket expenses, even at an in-network facility causes patients to consider finances more carefully before undergoing a procedure. According to Ms. Johnson, many patients stop and think "do I have the money to pay that even if I'm in-network" before scheduling an elective procedure.
The new policies also mean higher expenses for ASCs. New policies and conditions can require IT upgrades and staff training, which means extra costs for ASCs, says Mr. Goldammer. Higher health insurance costs also mean more expenses for ASCs and their employees for health benefits. And despite the higher costs to patients, ASCs continue to struggle as supply costs and salaries outpace any increase in reimbursements, Mr. Goldammer adds.
3. Access to capital
Another economy-related business challenge for ASCs is obtaining funding. In the current economy, "banks are not lending to one another," says Joe Zasa, managing partner of ASD Management. "The global healthcare reform seems to limit providers, which puts pressure on ASCs." Capital funding is especially hard to get now, with requirements including higher down payments and personal guarantees.
4. Finding physicians and nurses
A major challenge for ASCs today is finding new physicians. Adding new procedures and staying up-to-date on technology is one method of attracting new physicians and nurses, says Ms. Johnson. "How do you find them and keep them?" she says of operating room nurses. "There are not as many experienced ones as before."
As many ASC physicians age out, attracting new physicians is of the utmost importance, but can also be extremely difficult. "There are a lot fewer free agents," says Mr. Goldammer. One reason he cites is that as physician reimbursements decrease, more physicians turn to community hospitals for employment. "Once they are employed by a community hospital, they are locked out of investing in for-profit facilities," he says.
Mr. Zasa believes the number of ASCs is part of the problem in finding new physicians as well. "There are a lot of ASCs," he says. "There are only so many surgeons to support these ASCs."
5. Keeping centers "vibrant"
A further challenge for ASCs is what Ms. Johnson describes as "keeping centers vibrant." This includes keeping centers up-to-date and employees who stay motivated, both of which can be challenging feats.
According to Ms. Johnson, one of the most important ways to keep an ASC vibrant is to "continue to look for opportunities to do procedures that had previously not been available" at the center.
Difficulty in finding physicians and nurses means that finding ways to keep them takes a top priority. According to Ms. Johnson, the best way to do this is to provide employees with an excellent working environment, positive incentives, competitive salary and excellent healthcare benefits — all of which can be difficult as healthcare costs and salary standards go up, but reimbursements do not keep pace.