Change has become the norm over the past five years, but now heading into the second half of the decade healthcare reform's foundation firmly in place.
"The rate of change has slowed since the implementation of the ACA," says Ambulatory Surgical Centers of America CEO Luke Lambert. "The dominance of hospital systems and hospital employment of physicians has reduced the opportunities for de novo projects but increased opportunities to sell to our partner with hospitals."
The Affordable Care Act promotes high quality care for the lowest cost possible, leaning on data collection, reporting and transparency to drive better value. ASCs typically have higher quality and patient satisfaction scores than hospitals with lower costs.
"A lot of the changes in healthcare will be beneficial for ASCs because they favor high quality and low cost," says Matt Searles, MBA, partner with Merritt Healthcare. "However, we are in a mature industry and that reality is leading us to see fewer opportunities for new facilities. Instead, there is more consolidation and working with hospitals that want to take procedures to the outpatient setting. A lot of the things that drove success 15 years ago won't drive it now, but that's how the industry evolves and changes. We'll make it a positive for our business."
And hospitals are ready to acquire. A new Accenture report shows hospitals and health systems are abandoning hospital acquisitions for physician practices and clinics. These vertical acquisitions are expected to reach 84 percent of the total provider acquisition volume by 2018, up 74 percent from today.
Payers are also driving outpatient cases to surgery centers and patients are more cost-conscious than in the past. As a result, ASCs are an attractive option for hospitals. Payer trends are driving ASCs to partner with larger entities — including corporate partners and health systems — as well.
"The continued deterioration of being out-of-network has made the strategy more challenging but is creating opportunities to buy into troubled centers," says Mr. Lambert. "Health plan deductibles and copays continue to increase driving an increase in the consumer/patient's concern for cost-effective care."
Physician-owned facilities are also more likely to partner with larger entities as expenses and regulations increase without similar increases in compensation and reimbursement.
"As part of the whole healthcare reform efforts, we expect reimbursement to continue tightening and there will be less out-of-network opportunity. Additionally, because of industry saturation, we won't see ASCs grow at the same rate," says Mr. Searles. "You will look for growth from hospital partners or consolidation of economies of scale."
While the large, national changes have slowed, there are still opportunities to make meaningful headway in pro-ASC legislation at the state-level allowing new cases into the center. Those changes include 23-hour stays in states where they're currently not possible.
"We are expecting the federal legislation to be positive for the industry, and the 23-hour legislation at the state level would have an impact on orthopedic surgery centers," says Mr. Searles. "These are technically more difficult procedures to accommodate and require a different approach, but we can do those surgeries safely and efficiently in the outpatient setting."