1. Entering uncertain times. "Healthcare in general faces a great deal of uncertainty," says Michael Redler, MD, an orthopedic surgeon at the Surgery Center of Fairfield County in Bridgeport, Conn. "We are entering uncharted waters." Predictions that the recession is ending have not come to pass. Healthcare reform should create many changes, but with no regulations yet, it's difficult to say what they would be. And the 21.3 percent physician fee cut is ready to take effect again toward the end of the year.
2. Volume will still be down. High unemployment and the continued trend toward higher deductibles are discouraging elective procedures, leading to a drop in volume at many ASCs. Jason Lockette, MD, an otolaryngologist at Shoals Outpatient Surgery in Florence, Ala., says while volume was growing at the beginning of the year, there has been a small drop in the past few months. "If that trend continues it could be a problem," he says. "You'd like to think we've seen the worst."
3. A time of modest profits. While volume is down, ASCs do not appear to have seen a marked drop and many continue to make a modest profit. "My surgery center is making a little money; it's above break-even," says Joe Wieck, MD, an orthopedic surgeon Premier Orthopaedic Surgery Center in Nashville, Tenn.
4. Recession will linger. Ken Pettine, MD, a spine surgeon who co-owns the Loveland (Colo.) Surgery Center, predicts unemployment will stay at 10 percent through the rest of the year and perhaps as much as 10 more years. He sees better prospects for his home state of Colorado, where unemployment is at 7.5 to eight percent.
5. Centers will avoid layoffs. Many ASCs are still making modest profits, so widespread layoffs are unlikely. Since talented staff are the backbone of ASCs, "cutting back staff is not an option," Dr. Lockette says. Recently, his ASC hired a nurse. He thinks the center could survive a slump in volume because "we run a pretty tight ship."
6. The longer term seems rosy. "In the long run ASCs will prosper because they are more efficient and cheaper," Dr. Wieck says. Dr. Pettine agrees. "I'm feeling pretty good about what we're coming into," he says. "Every time I hear Obama talk, it's about quality care at lower costs. ASCs are the right entity at the right time." The healthcare reform law did not directly refer to ASCs, but proposed regulations due in the late fall should shed some light on just how they will be affected.
7. More volume for ASCs. Even if total surgery volume stays off, these physicians believe ASCs will wrest more volume away from hospitals because ASCs are more affordable. Dr. Wieck says his group is working with several major carriers to build incentives for policyholders to cases done in a preferred setting. Dr. Pettine predicts Medicare will allow more procedures, especially in spine surgery, to be done in the ASC. Hospitals have opposed this change, but as hospitals buy up more ASCs, they will support such a change.
8. More surgeons may join ASCs. Dr. Lockette says his ASC offset part of its loss in volume by recruiting a couple more surgeons in the past year. "We've been able to lose much less volume than some of our competitors," he says. But Dr. Wieck says lower returns may affect recruitment of new partners. "To buy into a mature surgery center costs more money if you won't see a high return on investment," he says. "Physicians used to count on 30 percent yearly return, but now it's something like 15-20 percent."
9. Better discounts with vendors. Vendors are still willing to cut prices, Dr. Lockette says. "We're able to see some cost reductions with vendors in some pretty aggressive negotiating," he says. "It's a competitive market and there are a lot of comparable products out there."
10. Physicians willing to make sacrifices. Hard times mean physician-partners are willing to negotiate discounts, Dr. Lockette says. "Generally speaking, they are willing to choose a less expensive option," he says.
11. ACOs begin courting centers. As hospitals and large groups start organizing accountable care organizations for a Jan. 1, 2012, launch date, they will begin to ask ASCs and their surgeons to share in bundled payments. "ACOs begin contracting for whole pieces of care, such as a rotator cuff from beginning to end," Dr. Wieck predicts. But Dr. Hathaway sees no reason to be part of an ACO. As a cataract surgeon, he already covers the whole episode of his patients' care. Dr. Pettine also plans to stay away from ACOs. "I'm a proponent of a small, specialized model," he says. "You do one thing and you do it well."
12. November election may dampen reform. Dr. Wieck says healthcare reform won't be slowed unless the Democrats have a terrible showing in the Nov. 2 elections. Even then, President Obama will veto any effort to repeal the law. The battle plays out in Dr. Wieck's backyard. His Democratic congressman, Jim Cooper, voted for the healthcare reform bill even though constituents opposed it by a margin of 2-1.
13. Medicare fee mess in December. The current temporary Medicare fee fix ends on Nov. 30. If Democrats are weakened in the Nov. 2 elections, physicians should be prepared for a replay of the payment hold-ups when the last fee fix ran out in June, Dr. Hathaway predicts. Medicare is 90 percent of his business, so when Medicare payments were postponed in June, his income practically dried up. He relied on cash payments and used his lies of credit. "I was able to survive but all my reserves were tapped," he says.
14. Colonoscopy waiver may not matter much. On Jan. 1, Medicare will waive the copay on colonscopies, but Dr. Lockette is not sure how much that will boost volume. He says many people who get colonoscopies are too young for Medicare.