Seven ASC leaders were asked what ASC competition will look like in five years. This is how they responded:
Editor's note: These responses were edited lightly for clarity and length.
Paul Doelling. Director of Mohr Partners (St. Louis): Competition will continue to grow and more surgery centers will be purchased at higher prices due to their ability to increase physician's profits due to their ownership or lease over the building.
Kimberly Brown, MD. Chief of gastroenterology at the Henry Ford Health System (Detroit): I feel the competition will increase. The hospitals are realizing that the future for most surgeries will be performing them in ASCs. Hospitals are starting to build their own ASCs or partnering with already established ASCs. Private equity is also very active in the ASC industry. With the new laws about price transparency, patients are able to look at surgery costs and compare the ASCs in their area and make decisions on where to have surgery partly based on the costs.
Liliana Lehmann. President of Axis HealthCare Partners (Fort Lauderdale, Fla.):
- COVID-19 has changed the rules of the game to some degree. Supply costs and staff costs/shortage are driving the market to consolidate among some ASCs in order to keep profitability in place.
- Health systems and national ASC management acquisition of existing ASCs will occur at a faster rate to meet value-based reimbursement requirements and a lower-cost delivery system
- Decline of startups with 100 percent physician ownership due to barriers of entry (cost and ASC market concentration)
Andrew Lovewell. Administrator of The Surgical Center at Columbia (Mo.) Orthopaedic Group: I think we will continue to see rapid growth in some markets that don't have a heavy ASC presence. On top of that, many hospitals that did not have an outpatient or ASC strategy have looked to develop one of their own or partner with management companies across the country to create one. We will undoubtedly see more private equity market penetration in the ASC space; this could possibly result in more market consolidation.
On top of that, many payers are developing steerage mechanisms to shift cases to lower-cost settings which will result in more pressure on physicians to move cases to the outpatient ASC arena. All of that to say that the growth of ASCs cannot keep up with the demand. We will continue to see higher acuity joint replacement, cardiac, bariatric and spine cases venture into the ASC space, so much so that by 2030 the projections are that 50 percent of the total joint cases will be performed at an ASC. I think the future is very bright for those ASCs that have been early to market that also deliver very high quality, patient-focused care. These places will be increasingly harder to compete with.
Andy Poole. Manager of ASC business solutions at ECRI (Plymouth Meeting, Va.): With further legislative changes promoting price transparency set to begin in this window, I fully expect to see a greater focus on competition on cost of the procedure to the patient, as well as outcomes. There will be a greater shift for centers to enter into value-based contracting as payers will want to have demonstrated outcomes as well as lower costs.
Brian Bacot, MD. Orthopedic surgeon at Comprehensive Orthopaedic Global (St. Thomas, Virgin Islands): The trends for the future indicate that there will be higher utilization of ASCs and more procedures being approved to be performed there. Hospitals will need to react by becoming more involved with ASC development and partnership. Healthcare will certainly move away from centralized healthcare to outpatient procedures and outpatient services.This will herald a shift in increasing importance for ASCs as well as reevaluating how hospitals are utilized.
Martin Roche, MD. Director of Arthroplasty at HSS Florida (West Palm Beach): The hospitals are seeing a significant shift to ASCs, and it will increase in the next five years. The No. 1 reason is cost savings for the insurance companies. The ability for physicians to participate in these entities as Medicare and payers continue to push reimbursements down on the professional side will drive this as well. Additionally, orthopedic companies have all defined programs to participate with robotics programs with wearable and implantable sensors to measure outcomes and stay connected to the patients.