ASCs and hospitals are increasingly joining forces as healthcare consolidation accelerates, and more procedures shift to outpatient settings, driven by payer preferences and patient demand for lower-cost alternatives.
This collaboration is reshaping operational structures and competitive dynamics for both parties.
Bruce Feldman, administrator of Eastern Orange Ambulatory Surgery Center in Cornwall, N.Y., joined Becker's to discuss how a recent ownership restructuring has transformed his ASCs' operations. As of February, the ASC transitioned from being majority physician-owned to hospital majority-owned, with Bronx, N.Y.-based Montefiore Health System now holding the majority stake.
With the ownership shift, Mr. Feldman is working to incentivize Montefiore to migrate more hospital-based cases to the ASC.
"In the past, the hospital didn’t want to do that because they didn’t want to lose revenue to the ASC," he said. "Now, they’re putting the money in their own pockets and realizing it will reach a point where the insurance carriers will mandate that certain procedures can no longer be performed in a hospital if there’s an ASC nearby."
The governance changes are expected to accelerate the migration of procedures from the hospital to the ASC.
"The hospital can negotiate better contractual rates with third-party payers," he told Becker's. You're seeing that now across the country, where healthcare systems are either buying up or developing their own freestanding ASCs, because they’re losing volume."
A January survey of health system executives by VMG Health found that 60% of leaders were considering pursuing outpatient surgery joint ventures in 2024, the highest area of interest of any potential specialty partnerships.
With the new leverage, Mr. Feldman has found that negotiating payer contracts has become much easier.
"We now have the managed care department of one of the largest healthcare systems here in New York behind us in terms of the negotiation table," he said. So now, when we're negotiating contracts with Emblem and United Healthcare and Aetna, we're not negotiating as a single ASC, we're negotiating under the umbrella and power of Montefiore Health System."
However, one key issue remains: hospital outpatient departments still receive higher reimbursements than ASCs for performing the same procedures. For colonoscopies, for example, those conducted at HOPDs cost $1,224 compared to $925 at ASCs, according to an analysis by Nashville, Tenn.-based ASC operator AMSURG.
"You would think that’s contrary to the ASC cost-saving model, but most third-party payers haven’t grasped that concept yet," he said. "It makes no sense. The purpose of doing a case in an ASC is that ASCs are more cost-effective and provide better patient and physician satisfaction."