Paul Eiseman, Vice President, Business Development of Regent Surgical Health discusses physician recruitment trends and how a hospital partner could be beneficial in the future. Q: What current trends in the healthcare market are having an impact on surgery centers?
Paul Eiseman: Right now we are seeing a trend toward hospital partnerships, and I think we're going to see more as hospitals seek to partner with low-cost venues to expand their reach and comply with government initiatives. Surgery centers will want to convert more from physician-owned to a mix of hospital/physician ownership because most started out-of-network with fairly significant reimbursement, but over time insurance companies have insisted on in-network contracts in most cases.
Whereas in the past surgery centers may have had 50 percent of their cases out-of-network, many are dropping down to around 10 percent. The ASCs have lost a lot of income without losing volume because of insurance company trends. Partnering with hospitals could increase their negotiating power and reimbursement rates, and has advantages for physician recruitment.
Q: What unique challenges do surgery centers face in the markets where hospitals are employing specialists?
PE: In the markets where hospitals are employing physicians, which are growing, its much more difficult for ASCs to find eligible physicians to join surgery centers as partners because they are forced to work at the hospital outpatient departments or the hospital-owned ASCs. Having said that, hospitals are also facing a challenge of bundled payments and participating in government initiatives like accountable care organizations, so they have got to find out how to take care of patients at the lowest cost possible.
Hospitals want to get the best results with quality as well as lower readmissions.
Q: What steps can surgery center leaders take to recruit new physicians to the community?
PE: Regent's model is a solution. We partner with hospitals and surgery centers for joint venture ASCs. In our model, the hospital has a large percentage of the ownership and control of the ASC, so they can participate in a low-cost venue for surgery. With the surgery center/hospital partnership, the hospital can leverage its managed care clout and get a pretty fair proportion of their hospital outpatient rates compared to what the physician-owned surgery center can do independently.
We take a stake in every project, usually only 10 percent in the hospital joint ventures, which gives physicians up to 49 percent ownership on a typical model. Together with Regent votes on the board of directors, the hospital has 51 percent control, which is what they need for the managed care contracting.
Q: When ASCs take on a hospital partner, what benefits are there for physician recruitment?
PE: When physicians in the community look at ASC investment opportunities, they may find it more appealing when the ASC has the stability of a hospital partnership. ASCs may also have access to physicians employed at the hospital whose contracts prohibited them from taking cases to the ASC before.
Q: Where do you see ASC recruitment trends heading in the future?
PE: It's too early to tell how ACOs and bundled payments will impact physician recruitment, but hospitals have been aggressive in recruiting specialists so far. The hospital partnership also enables the hospital to leverage the efforts of the ASC to recruit new physicians who are not members of the hospital staff. This extends their reach further into the community and bringing in new physicians because the ASC physicians will do inpatient work as well as cases at the surgery center.
We think that surgery centers will be a good venue for physician recruitment in the future.
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