Here are 16 trends for the ASC industry, including financial, operational and market acquisition statistics.
Market trends
1. Technavio reports the global ASC market is expected to grow at a 4.36 percent compound annual growth rate through 2020. There will be a continued rise in the minimally invasive surgery market, driving ASC growth.
2. Cardiac surgeries are increasingly becoming minimally invasive and procedures, with aortic valve surgeries and endoscopic robotic cardiac procedures potentially moving to the ASC. Orthopedic surgeries such as total joint replacements and spinal fusions are increasingly performed in the outpatient setting as well.
3. Vertess predicts the trend toward consumer-driven healthcare shopping illustrated by the demand for one-stop shops and on-demand healthcare services pose an opportunity for ASCs and urgent care clinics to attract patients. The company expects ASCs to combine with ambulatory groups, imaging centers and other specialists to provide a superior patient experience.
4. As healthcare moves toward pay-for-performance, bundled payments and shared savings models may present an opportunity for ASCs to thrive in a competitive healthcare environment.
Transactions
5. Half of the ASC company respondents to HealthCare Appraisers' 2017 ASC Valuation Survey use a formula to determine minority interest transactions with new or existing physician investors; another 32 percent obtain an independent fair market value appraisal.
6. Minority interest sale takes three to six months on average for 55 percent of the respondents when dealing with a new physician. However, when selling controlling interest to an ASC, 56 percent say it takes six months to one year to complete the process.
7. Half of the respondents report selling controlling ASC interest to a hospital or health system.
8. Almost half — 48 percent — report earnings growth per year is expected to grow 3.1 percent to 6 percent for the first several years after the transaction; just 19 percent expect growth exceeding 12 percent over that time period.
Operational
9. Salaries, wages and benefits on the high end are 30.4 percent of ASC net revenue; on the low end, they are 17.8 percent of ASC net revenue, according to Avanza Healthcare Strategies "Ambulatory Surgery Center Special Report: 2017 Benchmarks." Total operating expenses on the high end of ASC net revenue are 32.7 percent; on the low end, they are 15 percent of net revenue.
10. The typical ASC has eight operating room surgical cases per day on the high end; on the low end, ASCs have 3.2 cases per operating room per day. The average operating room time per surgical case is 60 minutes on the high end and 40 minutes on the low end.
11. At the high end, the typical ASC has 12.6 non-surgical cases per OR per day; at the low end, the average ASC has 3.4 non-surgical cases per operating room per day. Procedure room time per case is 40 minutes on the high end and 30 minutes on the low end.
12. ASC room utilization is typically 1,200 cases per room annually for ENT, general surgery and gynecology procedures on the high end; on the low end, the utilization is 1,000 cases per day. For orthopedic procedures, utilization is 850 cases per room annually on the high end and 750 cases per room annually on the low end.
Financial
13. Based on VMG Health's 2016 Intellimarker Multi-Specialty ASC Study, the average payer mix as a percentage of gross charges for ASCs is as follows:
• Commercial: 59 percent
• Medicare: 29 percent
• Worker's compensation: 9 percent
• Medicaid: 7 percent
• Self-pay: 4 percent
• Other pay: 5 percent
The average payer mix as a percentage of case volume at ASCs is as follows:
• Commercial: 51 percent
• Medicare: 33 percent
• Medicaid: 10 percent
• Other pay: 9 percent
• Self-pay: 5 percent
• Worker's compensation: 4 percent
14. Net revenue per cases is highest for orthopedics cases, hitting $3,222 on average. Net revenue for otolaryngology cases is $2,492 on average; gastroenterology is $963; ophthalmology is $1,395; and pain management average net revenue per case is $1,015.
15. The average EBITDA margin for ASCs is:
• Less than $3 million: 14 percent
• $3 million to $4.9 million: 21.6 percent
• $5 million to $6.9 million: 27 percent
• $7 million to $8.9 million: 26.4 percent
• Greater than $9 million: 35.1 percent
16. The total hourly staff wages is $30.21 on average with the nurse staff making $35.58, tech staff making $23.32 and administrative staff making $26.24 on average. The average nurse salary is $74,009 per year, ranging from $63,770 on the low end and $95,119 on the high end. The average ASC reported 14.5 staff hours per case, including seven nurse hours per case and 4.5 administrative hours per case.