At an Oct. 19 panel session at the Becker's ASC 25th Annual Meeting: The Business and Operations of ASCs in Chicago, four industry experts weighed in on the most pressing challenges facing ASC stakeholders as well as the areas ripest with opportunity. They covered a wide array of topics, including physician recruitment, supply chain efficiency and selling interest in an ASC.
The panelists included:
• Barry Tanner, president and CEO of Physicians Endoscopy
• Zach Pocklington, senior vice president of ASC sales at Medline Industries, Inc.
• Jon Vick, president of ASCs Inc.
• Ying Chen, DO, neurological surgeon with Columbus, Ohio-based OrthoNeuro
Mr. Vick on ASC transactions
"There are more opportunities to sell an interest in your center today than five years ago and that's because the hospitals have jumped in. Hospitals represent a really good potential buyer, but they undervalue ASCs. They use a valuation approach that does not value ASCs as high as ASC management companies do. So we recommend getting competing offers from ASC companies. The combination of hospitals, private equity companies and ASC companies bidding [for your center] is good for valuation. Also, you need to sell five to 10 years before the doctors are ready to retire. You want to sell when the center has excess growth opportunity."
Mr. Pocklington on case costing
"Work with your distribution partner to identify your case cost and then work on strategies to drive them down. For example, streamlining your physician preference cards is helpful. Use lean assessments to identify those supply chain efficiencies….and leverage the technology that's out there. Tie preference cards and inventory to software."
Dr. Chen on physician recruitment
"The main thing is to recruit early. Start recruiting young physicians early because it takes some time to get them up to speed on outpatient surgery. They are not quite ready yet."
Dr. Chen also said, "Spine is getting more complex and costs more because it requires more technology, more imaging, etc. Many of the doctors coming out of training don't have a lot of MIS or outpatient spine training."
Mr. Tanner on challenges facing GI practices
"Specifically for GI, [the challenges are] physician recruitment and succession planning. There are many permutations, and you are talking about how the buy-ins and buy-outs need to be managed, and for more successful ASCs, the buys-ins can be expensive. The second challenge is how to best deal with and market our value proposition. We need to do a much better job of getting the word out."