In an increasingly consolidating landscape, independent ASCs still have a seat at the table.
Operating an independent ASCs has become harder than ever. In an environment with less than optimal reimbursements and rising operating costs, partnering with private equity or a health system can be an enticing deal.
"As an independent ASC, as we transition to the higher acuity ortho and spine cases, it is becoming very apparent that remaining independent is becoming impossible, as we have absolutely dismal rates, no scope of negotiating anything at our scale — with the insurers or the vendors — and the personnel costs are out of control," Jayesh Dayal, MD, an anesthesiologist at White Flint Surgery in Rockville, Md., told Becker's. "For 2024, we have started talking to national chains, private equity firms and hospital systems to partner with so that the rates get better, the cost of disposables and implants get better, and the day to day operations and RCM are optimized. The days of in-house billing, long-term relationships with one's team, the independence to run your own outfit, are sadly gone. It was fun while it lasted, but it's time to bring in the suits — like the hospital days of yore."
Despite these challenges, about 70% of ASCs remain independent as of 2022, according to a report from VMG Health. One expert believes there may even be an increase in independent ASCs.
"As a bold prediction, I think we will see more independent ASCs stay the course and we could even see some ASCs break away from the management conglomerates," Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group and the Surgical Center at Columbia Orthopaedic Group, told Becker's. "The big five — USPI, AmSurg, HCA, SCA and Surgery Partners — will continue to consolidate through acquiring the smaller management companies in the space, but it will stall past that. The reason for the stall is that the uptick to standardizing processes is so long. Coupling the breadth and depth of disparate systems in ASCs makes the consolidation process even harder."
Though the news of ASC partnerships and consolidation may seem like doomsday for independent ASCs, leaders are optimistic about their place in the industry.
"I feel that the future is bright for independent ASCs," Jon Schmidt, vice president of operations at Rothman Orthopaedic Institute, told Becker's. "I think as patient care, particularly in orthopedics, continues to shift to outpatient models, we will continue to see ASCs being built with various structures put in place. Although I think the majority of ASCs will be connected to larger healthcare systems, there is certainly a place for independent ASCs. Flexibility is going to be essential in this very dynamic environment, where different approaches are going to be used to meet the needs of that particular market. I think this holds true for orthopedics, but I also think it pertains to other specialties who utilize a higher percentage of freestanding ASCs."