When Regent Surgical Health first started developing ASCs in 2001, the company was heavily focused on independent centers. But as reimbursement networks narrowed, Regent pivoted to hospital partnerships.
Note: These responses have been slightly edited for style and clarity
A decade ago, Regent had one hospital partnership. Today, that number is 19.
With a rapidly saturating, if not already saturated market, Regent Development Leader and Partner Jeffrey Simmons shared insights with Becker's ASC Review on the ASC market's future.
Question: With the ASC market at/or near saturation, how will centers continue to grow?
Jeffrey Simmons: [Centers will grow] if an ASC partnership is fortunate to affiliate with practices that are large and growing. [ASCs] should encourage the new partners in that group and offer an ownership percentage in the ASC, especially if the ASC can prove adding these new affiliates is an "accretive" event, like by adding new product lines especially in the areas of total joints and spine.
[ASCs can drive growth] by partnering with a hospital that may have employed surgeons whom they allow to participate in ownership and by having certain managed care products that require these cases to be performed in an outpatient setting.
Q: Recently, Regent has successfully negotiated health system partnerships, often doubling contracted payer rates. How has the company been successful in this?
JS: Hospitals have a need to take cases from the hospital to an ASCs due to pressures from payers to reduce the cost of surgeries (which occurs quite often these days). Then, it is often a reasonable assumption that payers will pay more for these cases [in an ASC] because they are saving money because hospitals pay almost twice or more for the same procedures that can be completed in ASCs.
Q: Is it possible for an ASC seeking an affiliation to increase their contracted payer rates? Or does it take a company like Regent to accomplish that?
JS: Regent is one of a small handful of national companies that are experts in these type transactions.
Q: Do you expect the market to experience any sort of contraction going forward?
JS: Just the opposite. As payers demand a lower cost facility environment, more opportunities are available [for ASCs].
Q: Is there anything you'd want ASC administrators and executives to know about market saturation?
JS: It's like any other business. Competition forces businesses to be creative and effective. The most creative solutions that are cost effective will be the ones [the market] chooses.