Here are five trends that are exciting ambulatory surgery center administrators across the country.
1. More people are demanding price transparency in healthcare. A trend toward price transparency in healthcare is sweeping the country and ambulatory surgery centers are in a prime position to benefit. However, they must take advantage of this opportunity to truly compete with other providers in the healthcare market.
"Price transparency is going to put ASCs in a great position and make a difference for them across the nation," says Bud Brooks, vice president of development of Surgery Center Network. "They are unable to depend upon surgeons nearly as much to bring case volume because hospitals are purchasing physician practices. ASCs have to do something to market directly to their customers, which are now payors, employers and patients."
Healthcare works differently from other industries because of the veiled pricing, but with incentives to lower the cost of care, increasing premiums and trends toward self-funding, people want to know what their healthcare will cost before they purchase it.
"It's a national issue because the healthcare system is so broken and messed up that there's nothing that could bring prices down any better than for people to be honest and upfront about their prices," says Keith Smith, MD, administrator of Surgery Center of Oklahoma. "I see it as an issue that could actually be good for business — it has been good for our surgery center. There will be an improvement in quality and plummeting in prices; it happens in every other industry and healthcare is no different."
2. ASCs can be more competitive in the consumer-driven market. As people take more control over their healthcare dollars, consumerism will drive more patients to low-cost outpatient settings. They will pay more attention to price and look for better quality.
"Price transparency will be better for healthcare overall. It's going to create an open market and competitive environment where just because you are the most expensive doesn't mean you have the best quality," says Jeff Blankinship, president and CEO of Surgical Notes. "That's a real concept that will be more prevalent in healthcare. You are going to find out that in the future, surgery prices will be more competitive on both the consumer and provider side."
Surgery centers owned by physicians will likely have a huge advantage over big hospitals because by owning their own facility, the physicians eliminate higher facility fees.
"That makes them difficult to compete with because most physicians are satisfied with the healthy professional fee; they don't need to hit a grand slam on the facility fee," says Dr. Smith. "If you have transparent pricing, you can actually have meaningful competition where consumers can determine some meaning of value. My price may have to change when I have more competitors, which I hope will be soon. We look for a healthy price war; I think that's what this country needs and is long overdue."
3. Third party payer rate increases are becoming more common. While they aren't the standard, rate increases from third-party payers are becoming more common than they were over the past few years. For combined new and renegotiated contracts, Dan Connolly, vice president of payor contracting for Pinnacle III, has seen anywhere from 5 percent to 88 percent increases over the previous rate this year.
"There is a broad range for reimbursement" notes Mr. Connolly. "If it's gastroenterology in a multispecialty setting, we have seen decent rate increases. I attribute the moderate increase to the leverage of the other specialties. Even in the single specialties, I'm seeing moderate gains that we weren't seeing a few years ago because of fall-out from CMS. "
Mr. Connolly has also seen gains in ophthalmology and orthopedics.
4. Insurance companies are more willing to contract for orthopedics and spine in ASCs. As more high acuity orthopedics and spine cases move from the inpatient hospital to the outpatient surgery center, insurance companies are more willing to negotiate better rates for the ASC — which is still lower than the hospital.
"I'm astonished at what we're seeing for orthopedics because we're seeing some turnaround," says Mr. Connolly. "We have increased reimbursement on many existing contracts and secured carve outs for implants on some contracts where we were not historically able to do that."
5. More EMR options are available for different types of ASCs. Surgery centers may have different EMR needs depending on number of specialties and there are systems available to accommodate them. "Some EMRs are tailored for a single specialty, so they've wrapped the features and functionality around a single specialty," Chad Luttrell, senior vice president of information technology for Meridian Surgical Partners says. "The information needs within a multi-specialty center can vary from a single specialty center. An EMR system needs to have the flexibility to meet those different needs. "
It is also important for an EMR in a single or multi-specialty center to be efficient enough to handle the higher patient volume and turn over present in the ASC space. "There are some EMR systems that will only allow one person to be in the chart at a time," Mr. Luttrell says. "You need a system that really allows multiple people to access a chart to perform their work."
More Articles on Surgery Centers:
4 Ways for ASCs to Save Real Dollars on Human Resources
Outlook for ASC Development & Transactions: 8 Key Trends
10 Statistics on Orthopedic-Driven Surgery Center Operating Expenses
1. More people are demanding price transparency in healthcare. A trend toward price transparency in healthcare is sweeping the country and ambulatory surgery centers are in a prime position to benefit. However, they must take advantage of this opportunity to truly compete with other providers in the healthcare market. "Price transparency is going to put ASCs in a great position and make a difference for them across the nation," says Bud Brooks, vice president of development of Surgery Center Network. "They are unable to depend upon surgeons nearly as much to bring case volume because hospitals are purchasing physician practices. ASCs have to do something to market directly to their customers, which are now payors, employers and patients."
Healthcare works differently from other industries because of the veiled pricing, but with incentives to lower the cost of care, increasing premiums and trends toward self-funding, people want to know what their healthcare will cost before they purchase it.
"It's a national issue because the healthcare system is so broken and messed up that there's nothing that could bring prices down any better than for people to be honest and upfront about their prices," says Keith Smith, MD, administrator of Surgery Center of Oklahoma. "I see it as an issue that could actually be good for business — it has been good for our surgery center. There will be an improvement in quality and plummeting in prices; it happens in every other industry and healthcare is no different."
2. ASCs can be more competitive in the consumer-driven market. As people take more control over their healthcare dollars, consumerism will drive more patients to low-cost outpatient settings. They will pay more attention to price and look for better quality.
"Price transparency will be better for healthcare overall. It's going to create an open market and competitive environment where just because you are the most expensive doesn't mean you have the best quality," says Jeff Blankinship, president and CEO of Surgical Notes. "That's a real concept that will be more prevalent in healthcare. You are going to find out that in the future, surgery prices will be more competitive on both the consumer and provider side."
Surgery centers owned by physicians will likely have a huge advantage over big hospitals because by owning their own facility, the physicians eliminate higher facility fees.
"That makes them difficult to compete with because most physicians are satisfied with the healthy professional fee; they don't need to hit a grand slam on the facility fee," says Dr. Smith. "If you have transparent pricing, you can actually have meaningful competition where consumers can determine some meaning of value. My price may have to change when I have more competitors, which I hope will be soon. We look for a healthy price war; I think that's what this country needs and is long overdue."
3. Third party payer rate increases are becoming more common. While they aren't the standard, rate increases from third-party payers are becoming more common than they were over the past few years. For combined new and renegotiated contracts, Dan Connolly, vice president of payor contracting for Pinnacle III, has seen anywhere from 5 percent to 88 percent increases over the previous rate this year.
"There is a broad range for reimbursement" notes Mr. Connolly. "If it's gastroenterology in a multispecialty setting, we have seen decent rate increases. I attribute the moderate increase to the leverage of the other specialties. Even in the single specialties, I'm seeing moderate gains that we weren't seeing a few years ago because of fall-out from CMS. "
Mr. Connolly has also seen gains in ophthalmology and orthopedics.4. Insurance companies are more willing to contract for orthopedics and spine in ASCs. As more high acuity orthopedics and spine cases move from the inpatient hospital to the outpatient surgery center, insurance companies are more willing to negotiate better rates for the ASC — which is still lower than the hospital.
"I'm astonished at what we're seeing for orthopedics because we're seeing some turnaround," says Mr. Connolly. "We have increased reimbursement on many existing contracts and secured carve outs for implants on some contracts where we were not historically able to do that."
5. More EMR options are available for different types of ASCs. Surgery centers may have different EMR needs depending on number of specialties and there are systems available to accommodate them. "Some EMRs are tailored for a single specialty, so they've wrapped the features and functionality around a single specialty," Chad Luttrell, senior vice president of information technology for Meridian Surgical Partners says. "The information needs within a multi-specialty center can vary from a single specialty center. An EMR system needs to have the flexibility to meet those different needs. "
It is also important for an EMR in a single or multi-specialty center to be efficient enough to handle the higher patient volume and turn over present in the ASC space. "There are some EMR systems that will only allow one person to be in the chart at a time," Mr. Luttrell says. "You need a system that really allows multiple people to access a chart to perform their work."
More Articles on Surgery Centers:
4 Ways for ASCs to Save Real Dollars on Human Resources
Outlook for ASC Development & Transactions: 8 Key Trends
10 Statistics on Orthopedic-Driven Surgery Center Operating Expenses