Four industry experts from ambulatory surgery center management and development companies weigh in on how healthcare reform is changing the market and where independent ASCs fit in.
The ambulatory surgery center industry has been traditionally dominated by purely physician-owned centers, but whether or not ASC leaders are prepared, widespread change is now an industry constant. Hospitals, health systems and ASC management companies are acquiring centers at an escalating rate, independent physicians seem to be an increasingly rare commodity and independent centers are faced with an uncertain future.
Four ASC industry leaders share their thoughts on where the ASC industry stands and cast an eye on one of the most pressing questions in the industry. Does the independent ASC have a sustainable future?
Threats
Physician employment: Independent physicians, whether equity owners or simply bringing cases to a center, are the foundation of the ASC industry. As hospitals and health systems race to acquire physicians and physician practices, it is growing concern that this foundation is beginning to crack. Physician employment places pressure on ASC referral sources.
"It used to be a physicians' world. Physicians drove where patients ended up, but that is changing," says Anita Roper, group vice president at Nueterra. As hospitals and health systems gain control of patient populations, many ASC leaders fear a decline in cases and the ability to remain an individual entity in a market of vast competitors.
Consolidation: General healthcare consolidation comes hand in hand with physician acquisition. Not only are practices becoming part of a larger entity, but large hospitals and systems are merging with one another. Competition for patients grows fiercer, larger systems gain even more clout with payers and the pressure to be swept up into the proverbial belly of the beast grows for ASCs.
"Based on our history, acquisitions and consolidation may not be sustained, but those ASCs that survive and remain independent have to become savvy with cost control and 
demonstrating value," says Robert J. Carrera, president and CEO of Pinnacle III. Regardless of what the healthcare climate may be years from now, ASC leaders must face the current situation and seize the opportunity to keep a place for their centers in today's market.
Opportunities
Price transparency: Price transparency represents a huge paradigm shift for all of healthcare. The transition will be no simple matter for any provider, but ASCs are smaller, more nimble entities. The ability to welcome the opportunity of price transparency is simply a matter of realizing how high it is on the list of patient demands.
"Consumerism is penetrating the whole system. Patients want and need to know the prices. You can go kicking and screaming or bite the bullet," says Barry Tanner, CEO of Physicians Endoscopy. Early adopters of price transparency will have a leg up over competitors.
As price transparency spreads throughout the market, shedding light even onto hospital prices, the cost savings ASCs offer will shine all the brighter. "Once price transparency takes hold, insurance companies will start directing patients to ASCs," says Ms. Roper. Patients themselves are stepping outside the box of being corralled by physicians and payers; taking on the initiative to find the lower cost options themselves. 
Higher acuity cases: As technology and minimally invasive techniques continue to improve, patients are subject to quicker recovery time and less postoperative pain, the perfect recipe for moving procedures to the ASC setting.
"You are going to see the more progressive developers target total hips, especially the anterior approach, and higher acuity spine cases," says Chris Bishop, partner and senior vice president of acquisitions and business development at Blue Chip Partners. ASCs will be able to demonstrate significant value in the shift of higher acuity care from the inpatient to outpatient setting. Patients, employers, payers and the healthcare delivery system will all benefit from this shift to the more appropriate setting.
Demonstration of value: Quality outcomes, lower infection rates and higher patient satisfaction is the mantra of the ASC industry, but a tune that remains too softly spoken. "The real opportunity, as an industry, is to do a far better job of quantifying our value," says Mr. Bishop. Tracking and recording quality metrics allows ASC leaders to showcase value for patients and payers, helping to carve out a foothold in the current healthcare environment.
Evolving to remain successful.
In a healthcare world as complex as the one providers face today, independence becomes a question of definition. Does it mean working with no one outside of a group of physician-owners or does it mean retaining the power to make decisions? "If ASCs operate as isolated providers of healthcare versus as one important step in the care delivery cycle, then eventually ASC independence will be threatened from lack of cooperation and collaboration," says Mr. Tanner.
A great deal of an ASC's appeal comes from its independence, but industries rarely remain as they began. "Anytime an industry matures, you are going to see consolidation," says Mr. Bishop. Strength in numbers is a driving force behind consolidation, but on the flipside consolidation opens the door to creating a system of collaborative care. It is no secret that consolidated, coordinated models of care have historically, achieved superior outcomes, says Mr. Bishop. ASC leaders may realize the old aphorism "no man is an island" rings true.
However, shifting the definition of independence does not mean relinquishing all control. The future of ASCs is not one of entirely hospital outpatient department conversion and loss of autonomy. 
"Eliminating physician independence and continued ownership in freestanding ASCs would destroy the very equilibrium we must achieve," says Mr. Tanner. "Physicians participation from an independent seat at the table versus an employer/employee model is critical to success." Creating strategic partnerships and remaining actively engaged in the industry is key.
Joint ventures are increasing in frequency and collaboration is a healthcare buzzword, but this does not mean the purely physician-owned center is extinct. It is highly dependent on each individual's ability to survive in a new era of healthcare.
"ASCs need a plan. If you don't have one, you need someone who will help, whether it is a hospital or third party management company," says Mr. Carrera. In recent years, the ASC industry has been comprised of 60 to 70 percent of centers owned solely by physicians, but the balance is shifting. The question is no longer of maintaining the status quo of the past, but facing the future and evolving to find a place in the new healthcare delivery system.
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