Amid a changing reimbursement landscape, the move towards Medicaid expansion and the increased popularity of ACOs, the healthcare industry resides in a state of gradual yet constant transformation. These changes to the "healthcare ecosystem" can produce indirect, downstream consequences for ASCs, according to Aaron Murski, managing director at Dallas-based VMG Health.
Mr. Murski and Colin Park, director at VMG Health, highlighted major industrywide trends occurring in healthcare during a presentation at the Becker's ASC 23rd Annual Meeting on October 28, 2016, in Chicago. Mr. Murski and Mr. Park identified both headwinds — factors opposing industry growth — and tailwinds — factors driving the industry forward — describing how these trends will impact ASCs.
Headwinds
Major payer consolidations: About one-third of U.S. counties will only have one payer offering health plans under the ACA's exchanges in 2017 and about another third will only have two options, according to data from the Kaiser Family Foundation. The growing amount of payer consolidations means there are fewer payers out there who hold more economic bargaining power. Many payers are also switching to high deductible health plans, "which push much of the financial burden of the premium on the patient until the deductible is met," Mr. Murski said.
Volume to value: When asking how the switch from volume to value will affect your surgery center, you have to ask yourself a few questions like, "Who is in your market?" and "What is their strategic plan or ability?" said Mr. Murski. Surgery centers must hold an awareness about the other players in their markets and how they are handling the shift from fee-for-service to value-based care to remain competitive and profitable.
Market saturation and increased competition: From 2000 to 2010, Medicare-certified ASCs saw an annual growth of 5.4 percent, according to CMS data. From 2010 to 2016, the growth has been about 1 percent annually, representing a mature market. This mature market — combined with fewer payers, more options for surgeries and lower bargaining power — may lead to an upcoming growth in ASC affiliations, Mr. Murski said.
Tailwinds
ASCs as a market disruptor: "As ASCs perfected their practices, they could handle higher acute cases and became a mainstream continuum of healthcare," said Mr. Park. As these surgery centers grab a firmer foothold in the mainstream market, he expects to see the ASC disruption trajectory continue to rise, with the centers providing higher levels of acute care.
Aging demographics: By 2025, the population aged 65 and over is projected to grow by 41 percent, according to information from the U.S. Census Bureau. This aging population will bring an increased demand for numerous age-related procedures and boost healthcare spending. "As the population ages, Medicare will be looking to lower expenses," said Mr. Park. "That's going to be done by treating patients in lower cost settings like ASCs."
Projected shortfall and surgical physicians: By 2025, the Association of American Medical Colleges predicts a 25,000 to 30,000 shortage of surgical physicians. "You have a growing population that needs to be served by a shrinking population of physicians," said Mr. Park. He believes ASCs are perfectly positioned to service these individuals amidst a growing shortage since the surgery centers are specialized, efficient, easily accessible and produce lower infection rates than hospitals.
Payer and patient cost savings: Insurance companies, employers and patients all demonstrate a preference for lower cost settings. Mr. Park expects to see an increase in demand for lower rates and cost savings, which can be achieved from shifting cases from an hospital outpatient department setting to an ASC setting.