Physician-owned ASCs often have a difficult time competing with the influx of health systems or hospital-affiliated ASCs, according to one executive.
Raghu Reddy is the executive administrator at Cumberland-based SurgCenter of Western Maryland. He spoke with Becker's ASC Review on the most significant external threat to ASCs.
Question: What is the most significant external threat to ASCs?
Raghu Reddy: The most significant external threat is marketplace competition and/or domination by the hospital systems or its affiliates, mainly by physician employment and through hospital-owned ASCs or joint ventures.The hospital JVs are on the rise in many states, especially when physicians are selling their practices to the hospitals or joining supergroups that may affiliate with a hospital to minimize the politics.
The health systems could make it hard if you plan to have a 100 percent physician-owned ASC or even in partnership with a management company, depending on the ASC location. In urban areas of Maryland, due to the number of ASCs, the competition is high, and the dominant payers like Blue Cross Blue Shield may not give out their best contracts to new physician-owned ASCs.
The administrators have to constantly evaluate the external threats and strategize the tactics to grow the ASC. Fortunately, we are the only multispecialty ASC in our area. Our main challenge is the availability of surgeons and is the main barrier to our growth.