The healthcare industry continues to evolve in 2024, with ASCs facing a growing number of external challenges including anesthesia shortages, prior authorization pushback and consolidation in the marketplace.
These 25 industry leaders explain what is getting easier, and harder, about running an ASC in 2024. The executives featured in this article are all speaking at Becker's 2024 ASC conferences, including our 30th Annual The Business and Operations of ASCs, which is set for Oct. 30-Nov. 2 at the Hyatt Regency in Chicago.
If you work at an ASC and would like to join as a speaker, contact Claire Wallace at cwallace@beckershealthcare.com.
As part of an ongoing series, Becker's is talking to healthcare leaders who will speak at our roundtable. The following are answers from our speakers at the event.
Question: How is your market changing? What is getting easier, and what is harder about running your business?
Alex Akio. Chief Operating Officer at Medical Associates Clinic (Dubuque, Iowa): We continue to flourish by keeping our patients on a closed network on our own payer plans. Independent multipractice groups can learn how to manage risk by truly managing risk on their own and not being dependent on organizations.
Alfonso Del Granado. Administrator and CEO at Covenant High Plains Surgery Center (Lubbock, Texas): My market is becoming more competitive again. Although COVID put a damper on new center development, the last year has seen some interesting activity – a new center opened up and another is in the early pre-planning stages. What is getting easier, if only a little, is hiring. While two years ago it was impossible for me to obtain sufficient staff to run my centers at full capacity, lately it seems I get more job listing responses and I get them almost immediately, though it still takes longer to fill an opening than it used to. Unfortunately, I don't foresee a return to "normal" anytime soon. Prior to the pandemic, we had already observed increasing shortages in the nurse labor supply, for example, and nothing had really been done to address the looming crisis. COVID served to kick those trends into overdrive, leading to more early retirements and decreases in nursing school attendance, while at the same time creating incredible traveling nurse compensation packages that made it nearly impossible for us to hire anyone without bankrupting ourselves. All in all, hiring is getting a bit easier, but I don't expect it to get "easy" anytime soon. What is harder, conversely, is retention. The shortage continues to make it possible for licensed staff to get a new job quickly and easily, often with an attractive signing bonus. This makes it more important than ever for my team to work hard to ensure staff satisfaction. Our hospital system is an amazing partner that is fully supportive of our efforts, some of which include rich benefit packages, bonuses, and other perks. However, I'm also blessed with an excellent management company partner with outstanding HR leaders that make employee engagement a central focus. My clinical and administrative leaders work on creative ways to drive morale in ways that take a bit of effort but don't break the budget. In the end, I think the staff appreciate the effort we put into these initiatives more than the tangible value they derive from them. Retention continues to get harder, to require more effort, but it's far less expensive than hiring and training new team members, and we are happy to work on it.
Ali Ghalayini. Administrator at Munster (Ind.) Surgery Center: The ASC market is undergoing significant changes that impact how these facilities are operated. As healthcare evolves, ASCs are at the forefront of adapting to new trends, technologies and regulations. One of the most significant trends is the shift of surgeries from hospital settings to outpatient centers like ASCs. This transition, driven by advancements in medical technology, not only enables more complex procedures to be performed safely in an outpatient setting but also offers cost-effective and patient-preferred options for less invasive and more convenient care settings.
In addition to changes in procedure location, ASCs face a dynamic regulatory environment. Keeping up with changes in reimbursement policies and compliance requirements, particularly under Medicare and other insurance programs, is now more crucial than ever. These regulatory adjustments require ASCs to stay continually updated, invest in ongoing training and potentially increase staffing levels to maintain compliance. Technological integration is another area where ASCs are seeing significant improvements. The adoption of electronic health records, telehealth and other digital tools is not just enhancing operational efficiency but also improving patient care. These technologies streamline patient scheduling, management and billing and improve the coordination of care with other healthcare providers, promising a more efficient and patient-centric future.
However, while technology makes some aspects more manageable, it also presents challenges. Compliance with evolving health regulations remains complex and costly. Additionally, the ASC market is becoming more competitive as the number of centers increases, necessitating effective marketing and exceptional patient care to stand out. Another growing concern is cost management. The expenses associated with adopting new technologies, alongside rising costs for staffing and healthcare supplies, pose significant challenges. Furthermore, the recruitment and retention of skilled healthcare professionals, such as nurses and surgical technicians, are becoming increasingly difficult due to a competitive labor market and professional burnout.
In conclusion, running an ASC today involves balancing the adoption of innovative practices and technologies with effectively managing regulatory, financial, and operational challenges. As the market continues to evolve, ASCs that navigate these changes successfully will be better positioned to deliver high-quality care and achieve operational excellence.
Andrew Lovewell. CEO of Columbia (Mo.) Orthopaedic Group: The healthcare market continues to experience consolidation, large group aggregation and mid-market mergers/acquisitions. One big trend that has dramatically stalled is the number of private equity transactions in the healthcare industry. The private equity slowdown is due to several compounding factors, the largest being the interest rates and the cost of the financial growth for these entities. Unfortunately, nothing is getting easier about running our business. The continued cost pressures and decreased reimbursements plague the private practice arena and everybody else as well. Luckily, our group is large enough that we can weather the storm to some degree. The ability to sustain growth and scale is a must in the modern era of private practice. Our goal is to continue to scale our business and create more value as we add differentiated services to increase the patient experience and access to our services.
Anthony Tortolani, MD. Cardiac and Thoracic Surgeon and Professor Emeritus for Clinical Cardiothoracic Surgery at Weill Cornell Medical College (New York City): Quality and efficiency produce value. With limited resources, including lack of paramedical personnel, increased variable costs, limited reimbursement via Medicaid and Medicare, and lower reimbursements by insurance companies to specific hospitals provides no assurance of margin or persistent deficits for many hospitals. Finally, there is quality data that private equity presence may further exacerbate these issues.
Benjamin Levy III, MD. Gastroenterologist at University of Chicago Medicine: The U.S. Preventive Services Task Force recently changed the colonoscopy guidelines to begin screening at age 45 due to an increased incidence of colorectal cancer being diagnosed at age 49. The thought was to perform screening colonoscopies on patients at age 45 in order to remove polyps before they have a chance to grow into cancer. Also, colorectal cancer is more easily treated when caught at earlier stages. The market for outpatient colonoscopy procedures at ASCs and in hospitals has skyrocketed because all of a sudden, there are 19 million additional Americans between the ages of 45-49 who need screening colonoscopies. ASCs and gastroenterologists should work to increase colorectal cancer screening rates in local communities to help prevent cancer. If we were able to get everyone between the age of 45-49 screened on-time, we could diagnose early onset colorectal cancers at earlier and more easily treated stages. The American College of Gastroenterology has been working to help raise awareness about the new colorectal cancer screening guidelines through Tune It Up: A Concert To Raise Colorectal Cancer Awareness. Over the past three years, we have seen enthusiasm for colonoscopies among 45-49 year-olds increase, which is awesome. Our gastroenterology public health campaigns are working. It also would be helpful to increase the number of post-graduate fellowship training spots nationally to help keep up with this new demand in gastroenterology.
Ben Seals. CEO of Thomas Eye Group (Atlanta): The eye care market in Atlanta has undergone significant changes in recent years. While there has been substantial consolidation within Atlanta, the level of competition has continued to rise. Presently, there are four eye care platforms based in Atlanta, making survival as one of the few independent multispecialty practices a considerable challenge. Compounding this challenge is the increasing cost of labor and its availability, which puts pressure on all aspects of healthcare. Consequently, we are experiencing growing pressures from both patients and providers to develop effective tools for productivity enhancement and process improvement. One of the emerging difficulties lies in differentiating one practice from another. As consumers become increasingly tolerant of virtual or independent care delivered on demand, it becomes more challenging to stand out. Consumers now expect healthcare, including eye surgery, to be accessible on demand, with treatment times becoming progressively shorter.
Despite these challenges, Thomas Eye Group continues to attract top talent to the practice. We have become a destination of choice for young doctors, both MDs and ODs alike, as many practitioners seek a collaborative care model that integrates high-quality services within one organization. We eagerly anticipate how these various market forces will challenge our organization to adapt and continue to grow.
Bruce Feldman (New York City): We are seeing a higher acuity level of cases shifting from the hospital setting into the ASC environment. This is especially notable with orthopedic and spine procedures, and we are now seeing a shift in the cardiovascular services arena. This presents challenges in the area of reimbursement as these cases become more costly in terms of supplies and equipment needed. It also requires clinical staff to have a higher level of training, which presents challenges in recruitment. These issues make running the daily operations of an ASC more difficult and complex.
Choll Kim, MD, PhD. Orthopedic Spine Surgeon at Excel Spine (San Diego): My practice has changed dramatically over the past few years. The ever-increasing burdens of insurance authorization and the relentless decline of payments has made it very difficult to care for our patients with spinal disorders. I have witnessed the inadvertent increase in patient volumes to maintain a steady income. Instead of seeing 20 clinic patients per day, it is common to schedule over 50 patients per day. Rather than 200 surgeries per year, the new standard is closer to 350 per year. All this has led to a decline in the time available to evaluate and care for patients. In my personal experience, this frantic pace made it very difficult to provide the type of care I envisioned for my patients. Consequently, my practice has evolved to a more concierge, out-of-network model. I now have the time to dive deep into a patient's diagnosis. I have the mental energy to understand the needs and expectations of the patient and their family. And I no longer consider insurance coverage policy to decide on the best treatment option. While there are drawbacks to this business model, it has restored my ability to care for patients in the manner I would want my own family to be treated.
Daniel Mulconrey, MD. Orthopedic Surgeon at Midwest Orthopaedic Center (Peoria, Ill.): Our market has been undergoing drastic change since the second quarter of 2023. Authorization for patient care has become increasingly more difficult. This difficulty has led to frequent denials and dramatic increases in wait times for ancillary studies, physician appointments, and referrals to therapy, pain management, etc. This year continues to bring challenges. Perhaps what is getting easier is dealing with the current medical quagmire. The doctor's ability to adapt and navigate in the new healthcare environment is getting easier. These current difficulties include insurance authorization, providing excellence in patient care, improving access to care for patients, and office staffing issues. All these continue to be challenges in 2024. The additional time required to deal with these challenges is exhausting. This constant increase in time requirement to provide the same level of patient care is getting harder.
Dean Lehmkuhler. Administrator of Northside Gastroenterology Endoscopy Center (Indianapolis): Our market is becoming more and more payer- and hospital-dominated and controlled. Both parties seem to operate more in a domineering role versus a collaborative role to best serve the community. Nothing is getting easier. Data management, along with analytical presentation of the favorable data to help the business, is becoming more difficult. Pricing is on the rise for all products and services, resulting in increased challenges to stay in business.
Harel Deutsch, MD. Co-Director of the Rush Spine Center (Chicago): The drastic increase in patients with Medicare Advantage plans has been a nightmare. Getting authorization with Medicare is simple, but Medicare Advantage plans will basically deny everything, including things such as routine CT scan to assess for fusion.
James Flaherty, MD. Cardiologist at Northwestern Medicine (Chicago): The major healthcare market shift over the past few years in the Chicago area has been the further consolidation of hospitals into large health systems.
Jami Osterlund, MSN. Perianesthesia Manager at Houston Physicians' Hospital (Webster, Texas): We haven't noticed much change within the surgery center, mainly because our physicians and anesthesia providers are employed. We are, however, seeing a shift of anesthesia providers leaving the large hospital systems and coming to our organization. We are ramping up two new centers this year and plan to open two more by the end of next year. This internal growth makes it easier for our patients to reach medical and surgical care across the greater Houston area.
Janet Carlson, MSN, RN. Executive Director for Ambulatory Surgery Centers of Commonwealth Pain & Spine (Louisville, Ky.): My market is changing with many large health systems eliminating their pain management service line, where we are positioned to help those chronic pain management patients to continue the continuity of their care in their community. The conversations around ASCs are continuing to engage surgeons, patients, clinicians and patients. The site of service conversations are getting easier with our transparency around our quality metrics, cost containment and excellent patient outcomes. The most difficult aspect of my business in the ASC space are the challenges surrounding the restrictive and outdated certificate of need laws in certain states, along with the continued debate around employed surgeon noncompetes. Overall we need to allow free market forces to prevail in the delivery of healthcare in America and return physicians and nurses back to the driver's seat for effective leadership in the clinical and operational spaces.
Jeremy Smiley, MD. Internal Medicine Physician at NorthShore/Endeavor Health (Evanston, Ill.): The biggest challenge that we are facing is insurance companies that are denying more inpatient claims. It is a challenge to convince the medical directors why inpatient level of care is appropriate despite not meeting "inpatient criteria."
Joe O'Brien, MD. Medical Director of Minimally Invasive Orthopedic Spine Surgery at VHC Health (Arlington, Va.): The market has seen a consolidation of practices to gain economies of scale in the D.C. region. Group negotiations make work with payers and hospitals easier, and we have seen a push toward that end. D.C. has seen OrthoVirginia (140+ docs), Centers for Advanced Orthopaedics (170+ docs) and private equity as means of consolidation. It remains to be seen which method will prove most effective at preserving physician independence and compensation. In terms of ease and difficulties of running practice, I have seen that group practice brings ease of multiple layers of help for various areas. However, it tends to put partners in an adversarial role when it comes to overhead. As I have aged in practice, I have seen many older partners want help that they are not paying for. The group model tends to subsidize those that are less productive. It can get frustrating for high producers.
John Prunskis, MD. CEO and Medical Director of the Illinois Pain & Spine Institute (Elgin): Obstruction by insurance companies to allow patients to have necessary procedures is increasing. What's improving is the data and types of procedures we have to decrease or eliminate painful conditions in the spine and other areas.
Kayla Schneeweiss-Keene, BSN, RN. ASC Administrator of Mann Cataract Surgery Center (Houston): It is getting harder and harder to keep costs down for our centers as supply cost increases, wage cost increases, third party-paid survey requirements, and quality water testing were just added this year, to name a few. Insurance reimbursement is not keeping up with the cost demands of a center.
Mike Madewell. CEO of Panama City (Fla.) Surgery Center: Our biggest new challenge that we are facing is anesthesia stipends. We've never had to worry about our anesthesia providers being able to cover their costs with the cases they support at our centers. But as CRNA salaries escalate and we add more and more Medicare cases, especially total joints, to our facilities, anesthesia providers are finding their margins disappearing and are now asking ASC's to supplement their group's incomes, as hospitals have done for years. Many of us are already struggling as it is and have very little resources to supplement other providers. It's a huge challenge
Omar Khokhar, MD. Partner of Illinois GastroHealth (Bloomington, Ill.): Our market is rapidly evolving. The challenge at the moment is that our numerator (patients) is growing, but our denominator (clinicians) is shrinking. So while it's a good situation from an ASC market point of view, we need to improve our workflows to book patients within two to four weeks; anything beyond that, and it's tough to maintain their interest in elective procedures.
Randal Reynolds. Senior Vice President of Field Operations at HealthCrest Surgical Partners (Edmond, Okla.): Compared to prior years, I am not sure that there is anything easier about running ASCs. Hyperinflation has created an environment of much higher costs for all facets of operations, including payroll and supplies as well as vendor contracts, including anesthesia. Sadly, reimbursements from government and commercial payers have not kept pace with these cost increases. The only solution is to run as efficiently as possible, while at the same time evaluate and implement ways to grow revenue through adding productive doctors and/or specialties and identifying new procedures that help to increase profitability.
Ram Tumuluri, MD. President and CEO of Saak Health (Brookfield, Wis.): There is a subtle change in providers and patients. Providers are moving towards independent practice and moving away from corporate medicine. Patients are looking at cost-effective medicine, especially procedure-oriented.
Rick Ngo, MD. Founder and Surgeon at Texas Surgical Specialists (Fort Worth): My market as a general surgeon who has a specialization in minimally invasive hernia repairs has changed in that there is more competition in the field as more general surgeons are taking less acute care surgery call and focusing more on elective/outpatient general surgery. Patient acquisition has become easier in that an increasing number of patients are finding and selecting physicians on their own via the internet, social media and other modern-day modalities. This does pose the challenge and need for physicians to spend more time and money on marketing efforts.
Robert Bell, MD. Founder and Orthopedic Surgeon at Cypress Orthopedics (Houston). In the healthcare sector, independent medical practices and surgery centers are facing significant challenges arising from diminishing insurance reimbursements. This trend is significantly impeding their ability to maintain financial viability and operational continuity. Conversely, large healthcare conglomerates or hospital networks have positioned themselves to capitalize on these shifts, leveraging their scale and engaging in questionable collaboration with insurers. The overarching trend toward consolidation raises concerns regarding potential constraints on patient choice and diminished competition in select regions, thereby posing substantive challenges to the long-term accessibility and affordability of healthcare services.