ASC executives across the U.S. are bullish on the market as CMS and commercial payers move to incentivize the transition of larger orthopedic procedures to the outpatient setting. The boon for large physician groups and ASC chains is clear.
But what will happen to the many one- and two-physician centers across the U.S.?
"There continues to be a strong growth in the direction of shared and corporate ownership while solo-physician-owned centers are sadly becoming more like the endangered species of the surgical kingdom," Cherilyn Smith, administrator of St. Johns Surgery Center in Fort Myers, Fla., told Becker's. "The latest opportunists that seem to be sinking their grip into these mergers and acquisitions are the private equity groups, who often have more cash for capital than common sense when it comes to providing good-quality patient care."
Traditionally, surgeons have chosen to invest in ASCs and take cases there because they offer more autonomy over patient care. The surgeons can have more control over the surgical process, procedure scheduling, which implant systems they use and how patients recover after surgery.
"The ASC industry started as a means for surgery specialists to secure [operating room] time without worrying about running over scheduled time or being 'bumped' by surgeons whose specialties were more prone to emergencies and/or more lucrative to the hospitals," said Donald Lenz, administrator of Eye Surgery Center of New Albany (Ind.). "These visionaries saw the opportunity to have more input into how their patients received their care and a return on their investments. Over time as the industry developed, additional surgeons wanted to secure time and shares in the ASCs, leading to additional procedures being performed and an increase in demand."
Last year, many centers closed or lowered procedure volume for a short period until their teams could safely perform procedures during the pandemic. The situation exacerbated struggles smaller centers already faced, such as keeping up with finances and new regulations. Some see joining a larger network as their only option.
"It's interesting to see the transformation of patient-centered care and physician ownership as surgeons have historically broken from their hospital-only strongholds to fund their own centers and are now rejoining the shared management model, including, yet again, the hospitals," Ms. Smith said. "When the focus is taken off of the patient and placed on the dollar, the foundations will certainly fracture."
She theorized that surgeons who struck out on their own years ago are being driven back to shared ownership models potentially because of poor management and lack of training and mentorship for administrators overseeing day-to-day operations.
The American Medical Association's report on physician-owned practices doesn't offer much hope. The report, released May 5, showed the number of physicians in independent practices dipping below 50 percent for the first time last year. The number of physicians in practices with fewer than five physicians hit 33.6 percent, and only one-third of physicians under the age of 40 years worked in private practice last year. Since 2018, the number of physicians in private practice has dropped 5 percentage points.
It seems inevitable that consolidation will continue to make survival hard for small physician-owned centers. However, the pendulum eventually could swing back.
"Most surgeons, while they may relish a handsome profit, do tend to take greater heart in devoting themselves to superior postoperative outcomes and happy patients," Ms. Smith said. "They say history is doomed to repeat itself. … It will be intriguing to see if surgeons will once again attempt to break away from those obligatory shared profits and pursue the dream of becoming their own boss once more, especially for the sake of the patient."