Health systems are getting bigger and bigger, leaving standalone hospitals and ambulatory surgery centers as crucial pieces in the consolidating healthcare market.
At the 20th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 24, Greg Koonsman, senior partner at VMG Health, explained how the health system market is consolidating and what the implications are for ASCs.
The major for-profit and nonprofit systems have acquired hospitals at a rapid pace over the past few years. Franklin, Tenn.-based Community Health Systems, Dallas-based Tenet Healthcare Corp. and St. Louis-based Ascension Health are three of the prime examples Mr. Koonsman discussed. As these systems build their national scope, smaller, regional systems with less than $500 million in net revenue have debt-to-EBIDA ratios that are twice that of the big players. "They are kind of asking themselves, 'What should we be doing?'" Mr. Koonsman said. "Should we be standalone?"
Economic pressures, the rise of high-deductible health plans, new payment models and capital constraints are pushing many of these hospitals into the merger and acquisition market. However, ASCs are primed to be major components of these systems as well, Mr. Koonsman said. Up to 6 percent of hospitals' Medicare Part A payments will be at risk by 2017 through various elements under the Patient Protection and Affordable Care Act, and to counter this shift away from admissions, hospitals are looking to beef up their outpatient presence.
The major for-profit ASC companies are looking to reach partnerships with hospitals because they, too, want to avoid cuts to their bottom line. Whether they are joint ventures or conversions into hospital outpatient departments, ASCs are directly in the scope of their major hospital competitors, whether they realize it or not.
"I really believe there are a lot of systems that previously had not considered ASCs as a big part of their strategy," Mr. Koonsman said. "But boards are saying, 'We need an outpatient strategy quickly.' That's great news for the ASC market. It's much more likely to help push that outpatient business into a surgery center partnership."
More Articles on the 20th Annual ASC Conference:
Compensation Corner: How Much Should ASC Administrators and DONs Be Paid?
How an Ambulatory Surgery Center Escaped the Threat of Bankruptcy
Common Misconceptions About Out-of-Network Reimbursement
At the 20th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 24, Greg Koonsman, senior partner at VMG Health, explained how the health system market is consolidating and what the implications are for ASCs.
The major for-profit and nonprofit systems have acquired hospitals at a rapid pace over the past few years. Franklin, Tenn.-based Community Health Systems, Dallas-based Tenet Healthcare Corp. and St. Louis-based Ascension Health are three of the prime examples Mr. Koonsman discussed. As these systems build their national scope, smaller, regional systems with less than $500 million in net revenue have debt-to-EBIDA ratios that are twice that of the big players. "They are kind of asking themselves, 'What should we be doing?'" Mr. Koonsman said. "Should we be standalone?"
Economic pressures, the rise of high-deductible health plans, new payment models and capital constraints are pushing many of these hospitals into the merger and acquisition market. However, ASCs are primed to be major components of these systems as well, Mr. Koonsman said. Up to 6 percent of hospitals' Medicare Part A payments will be at risk by 2017 through various elements under the Patient Protection and Affordable Care Act, and to counter this shift away from admissions, hospitals are looking to beef up their outpatient presence.
The major for-profit ASC companies are looking to reach partnerships with hospitals because they, too, want to avoid cuts to their bottom line. Whether they are joint ventures or conversions into hospital outpatient departments, ASCs are directly in the scope of their major hospital competitors, whether they realize it or not.
"I really believe there are a lot of systems that previously had not considered ASCs as a big part of their strategy," Mr. Koonsman said. "But boards are saying, 'We need an outpatient strategy quickly.' That's great news for the ASC market. It's much more likely to help push that outpatient business into a surgery center partnership."
More Articles on the 20th Annual ASC Conference:
Compensation Corner: How Much Should ASC Administrators and DONs Be Paid?
How an Ambulatory Surgery Center Escaped the Threat of Bankruptcy
Common Misconceptions About Out-of-Network Reimbursement