Three ASC leaders joined Becker's to discuss how declining reimbursements are affecting the ASC industry.
John Peloza, MD. Orthopedic Spine Surgeon, The Steadman Clinic (Vail, Colo.): Because of declining reimbursement, single practitioners and small group practices will not survive. Therefore, medical groups are consolidating, joining, or contracting with hospital systems in order to optimize contracts and reduce overhead. Private equity is another option to capitalize growth for large groups that dominate a geographic area, service line or wish to expand into other geographic areas or service lines. Health systems are also consolidating to leverage their size and economies of scale to maximize their competitive position and manage costs. Bigger is truly better as long as you can manage all the competing interests in a medical organization.
Omar Khokhar, MD, CPE. Partner, Illinois GastroHealth (Bloomington, Ill.): The ASC space going forward is a double-edged sword. Rising staffing costs and declining reimbursements will tighten margins across the margin. That said, ASCs still represent value for patients and payers, and they should continue to shift surgical cases from hospitals which represent lower value for service. That last word is key — ASCs need to meet the patient where they are and be flexible with regards to timings and availability which further distinguishes them from hospital-based services.
Joseph D'Agostino, MBA. Administrator, Advanced Surgery Center Perimeter and Gwinnett Advanced Surgery Center (Snellville, Ga.): Several factors play a key role in this trend, such as dynamic market challenges include, but are not limited to, declining reimbursement for both providers and facilities, increased cost of staffing and supply shortages. The inevitable shift to higher acuity cases from an HOPD to a freestanding ASC will also continue. In addition, the possibility of the elimination of noncompete agreements could drive greater utilization and the opening of new facilities overtime.