Hospitals cutting service lines is bad news for health systems, but could offer a unique opportunity for ASCs.
Three healthcare executives connected with Becker's to discuss how ASCs are affected by hospitals closing service lines.
Note: Responses have been lightly edited for length and clarity.
Thomas Campanella. Healthcare Executive in Residence at Baldwin Wallace University (Berea, Ohio): The closing of hospital service lines have the potential of creating business opportunities for ASCs for either existing services or potentially new services.
Hospitals are facing financial challenges from a number of perspectives including reimbursement from payers and competitors in the growing lucrative outpatient market.
Enhanced price transparency will accelerate the move to developing benefit designs by payers to incent consumers to select value-based providers such as ASCs. This will create even greater financial challenges for hospitals that could result in closing of additional service lines.
Advances in science and technology which allows surgeries to be delivered in a cost-effective, quality and safe manner in ASCs will create incentives for payers to allow more procedures, including potentially those from closed hospital service lines, to be performed in ASCs.
Jennifer Misajet, RN. Interim COO and Chief Nursing Officer at MercyOne (Des Moines, Iowa): As hospitals evaluate and close or ramp down in specific service lines, it can be a real opportunity for ASCs to capture new volume in a variety of specialties. Surgical patient volume in many specialties continues to migrate safely and appropriately to an ambulatory approach in both ASCs and hospitals. While service expansion may require ASCs to purchase specialty equipment and train staff, selectively focusing on growing volumes in specialties moving out of acute care can make sense for the revenue, productivity and utilization of the ASC.
Alok Sharan, MD. Founder and President of the Spine and Performance Institute (Edison, N.J.): The increasing fixed cost of hospitals is leading to significant downward pressure on operating margin. This is leading to many hospitals closing down service lines.
For ASCs this represents a tremendous opportunity to deliver high-value care. Numerous studies have shown that ambulatory surgery centers are able to deliver more cost-effective care (high quality/lower cost). Increasingly, we are seeing ASCs that are focusing their resources around one or two specialties. For example, there are already ASCs that are focused on just doing joint replacements. We are seeing some ASCs that are focused around cardiac procedures. We will soon see the same for just pain management and spine procedures.
Just as certain hospitals have been developed that just focus on one specialty, I believe that the closure of certain service lines in hospitals will present an opportunity for ASCs to develop outpatient-focused factories that are devoted to one or two specialties.