“[Hospital physician employment] can impact ASCs and ASC valuation because they are driven by specialist reimbursement,” he said. “As specialists find it more difficult to stay in private practice, ASCs will feel the impact … [They] will have to continue to be more cost-effective to maintain their margins.”
ASCs that cannot survive the impact of the economy and physician employment trends may consider selling to a hospital, Mr. O’Sullivan said. Hospitals have recently shown more interest in buying underperforming or market-challenged ASCs and restructuring them to become part of the hospital entity.
“These ASCs are underutilized, poorly managed or have out-of-network contracts that are no longer viable,” Mr. O’Sullivan said. “Hospitals look to consolidate their services and can negotiate higher rates under the hospital’s provider number and the HOPD payment schedule.”
Since the inception of VMG, Mr. O’Sullivan has provided leadership in the company’s strategic objective of providing unparalleled financial and transaction advisory services in the healthcare market.
With Mr. O’Sullivan’s background, it is not surprising he has a few words of advice on sound financial management. With VMG Health, he has performed extensive engagements in hospitals, ASCs, imaging centers and physician organizations and has acted as a financial advisor in turnaround and restructuring efforts for clients undergoing realignment. While at VMG, he also served as founder of Practice Performance, a third-party business process outsourcing firm in the medical practice market of Texas, Colorado and South Carolina.
Mr. O’Sullivan is also a founder and owner of VMG Holdings. Prior to founding VMG Health, he served with the financial advisory services group Ernst & Young.
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