Ellen Johnson is COO of Facility Development & Management in Orangeburg, N.Y., which develops and manages ASCs in New York, New Jersey and Florida. She discusses six trends affecting ASCs.
1. Out-of-network opportunities dry up. As premiums rise, fewer people are enrolling in insurance policies that allow out-of-network services because these policies are more expensive. Ms. Johnson sees this trend in New Jersey in particular. An ASC can get more volume by going in-network but it still may make less money because the difference in reimbursements is significant. In some cases, reimbursements from two to three in-network patients are the same as the reimbursement from just one out-of-network patient, she says.
2. Recession reduces volume. Ms. Johnson reports volume is down somewhat. People have been putting off elective surgeries to save money, hoping economic conditions will improve in the longer term. The recession can also be blamed for other trends that are reducing volume. For example, the decline in out-of-network opportunities and a rise in high-deductible plans are the result of policyholders looking to keep their premiums in check in the face of double-digit rate increases.
3. Problems collecting deductibles. As more people have insurance with deductibles as high as $1,500 or more, collecting deductibles becomes more difficult for ASCs. Often the money cannot be collected from the patient at the point of service, the most effective time to collect, because it is hard to know what portion of the deductible is left to pay. The typical surgery patient has had other recent health services that also required payments toward the deductible. This means the ASC has to wait until the payor sends the bill.
4. Collections not a problem yet. Despite not being able to collect at the point of service, Ms. Johnson has not yet seen significant problems with collecting from patients, but this is something to watch. She recommends offering patients a payment plan, but it should not last longer than a few months. Under the typical plan, the ASC asks for an initial downpayment and then receives two to three monthly installments from the patient. "If people don't pay and we've done our best, then I think they should be sent to a collection agent," she says.
5. More hospital-physician joint ventures. Hospitals have successfully blocked ASCs in New York, which is a heavy certificate of need state, but now some hospitals want to partner with physicians. "If you don't have a hospital blocking you, the CON application becomes pretty much a no-brainer," Ms. Johnson says. Hospitals are interested in ASCs because they have been seeing their volumes depleted by office-based surgery in such areas as GI and plastics. Hospitals are sometimes willing to have minority interest because "having a percentage of something is better than having a percentage of nothing," she says.
6. ASC mergers on the rise. As the ASC market matures in most states, some centers are struggling with insufficient volume. In some cases, they are trying to merge with another center so that their surgeons can continue their work. However, it takes a great deal of planning to shut down a center.
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Read about more trends and developments impacting ASCs:
- 5 Observations on the Future of ASCs by Dr. Neal Lintecum of Kansas' Lawrence Surgery Center
- 6 Key Issues and Trends Impacting Outpatient Services and Physician-Owned Facilities
- Health Reform's Impact on ASCs: Commentary From Marian Lowe of ASCAC