Michael Boblitz, CEO of Athens (Ga.) Orthopedic Clinic, joined Becker’s to discuss the federal policies, market forces and healthcare trends he’s watching most closely in 2025:
Question: What federal policies are ASCs watching most in the coming months?
Michael Boblitz: The new administration and Republican-controlled House and Senate are sending clear messages on reducing healthcare costs and reallocating funding to — finally — increase physician Medicare reimbursements. The aim appears to be on eliminating site of service payment differential (i.e. stop paying 30% to 40% more for a joint-replacement surgery in a hospital than a ASC), and eliminating tax exemption with many large “non-profit” health systems generating $200 million-plus in annual income. While the market forces continue to create a lot of headwinds for hospitals, the orthopedic industry continues to have tremendous tailwinds for expansive growth.
Q: What do ASCs want out of mergers and acquisitions in 2025?
MB: Strategic partnerships are a crucial component to any organization’s strategy. I view them as funds in your retirement account where some funds — A.K.A. partners — perform better than others and sometimes a fund — partner — needs to be replaced with a better one. The role of the larger national ASC-focused organizations offer private orthopedic practices with wholly owned surgical centers [is] an option to elevate financial performance through enhanced contracting and supply chain advantages. If a private orthopedic practice can secure a partnership by selling a 51% stake in their ASC division to create a liquidity event for the partners while also elevating the operating results where distributions still increase, then the partnership is truly a win-win. Athens Orthopedic Clinic operates a strong, wholly owned ambulatory surgery division with multiple sites and well positioned to take full advantage of such strategic partnership options as they arise in the future.
Q: What’s one current aspect, problem or trend in the ASC industry that you think needs more attention?
MB: The one area in the ASC industry that warrants more attention is the opportunity to create expansive direct-to-employer contracting solutions that drive down costs via lower-cost ASCs, while also simplifying the very complex billing environment via one bundle payment that combines the physician fee with anesthesia and the facility. Back pain has become one of the highest cost conditions in the U.S. and thus direct contracting for spine care is very logical, as well as joint replacement surgery. Athens Orthopedic Clinic is making this a top priority as part of our new strategic plan.
