Jared Leger is the CEO and managing partner of Arise Healthcare.
Q: What do you see as the top concerns for ambulatory surgery centers in 2012? How are those concerns different from the issues of the last year (or few years)?
Jared Leger: I think the top concerns facing ASCs in 2012 are as follows:
• Declining growth. Many physicians are being integrated into the hospital system, either through employment or alignment models with the hospital. The remaining ASCs are all pursuing the same few independent physicians in a given market. Each year, we see the number of ASC-eligible, independent physicians going down. It will be a challenge for ASCs to keep surgeons happy when other ASCs and hospitals are likely courting them. It will also be a challenge to increase ASC "same-store growth" without adding new physicians.
• Increased difficulty with payor negotiations. In the past, many employers purchased health insurance plans for their employees that included out-of-network benefits — and ASCs could count on them. This enabled ASCs to stay out-of-network with a given health insurance carrier as a negotiation strategy or leverage with the insurance carriers.
Many employers are looking to lower health insurance costs. As a result, fewer employers are purchasing health insurance plans for their employees that include OON benefits. If an employer does purchase a plan with OON benefits, the OON deductibles are typically very high. This is forcing many independent ASCs to go in-network with the insurance carriers with little or no bargaining leverage. When there is a surplus supply of in-network ASCs, the insurance payors are less inclined to negotiate with the ASC for better rates, carve-outs, etc.
• Increased governmental oversight. We are seeing an increased number of governmental audits and investigations. Some of these investigations are looking into physician relationships with the entity that he or she refers to. However, most of these investigations and audits are based on coding, billing, collections and medical necessity. Nearly everyone in the ASC industry is predicting that governmental investigations will continue to increase in 2012.
Q: What can ASC leaders do to tackle each of the concerns you mentioned? For each problem, could you discuss a short-term and long-term plan?
JL: Each of the problems I discussed can be handled with a short-term plan and a long-term plan:
Short-term plans
• Declining same-store growth. ASCs should look at adding new procedures and new technology. ASCs should ask existing medical staff if there are any procedures that could be done in the ASC setting if they had the proper equipment. We are seeing a lot of procedures that are typically done in an inpatient setting migrating to the ASC outpatient setting. This will allow for increased same-store growth if you are not able to attract new physicians.
• Increased difficulty with payor negotiations. If staying OON is your short-term plan, a good marketing strategy would be to locate the employers who purchase insurance plans for their employees that include OON benefits. Then market your facility and your specialists to those employees.
• Increased governmental oversight. Short-term strategies for insuring legal compliance could include a random coding audit or legal compliance audit by an outside healthcare attorney or consulting firm.
Long-term plans
• Declining same-store growth. As a long-term strategy, the ASC could consider aligning with a local hospital system in some way. Many hospitals are under financial pressure as well, and a symbiotic relationship can make sense — and help ASCs gain greater access to hospital-integrated physicians.
Another way to improve a center's growth is to market directly to patients. If you are able to properly educate the patient that ASCs provide lower-cost care with better quality outcomes, the patient may ask their physician to do their procedure at your ASC as opposed to the hospital.
ASCs can also market its specialists to other independent referrals sources. Such sources can include independent urgent care centers, independent family practice and internal medicine physicians and other independent specialists.
• Increased difficulty with payor negotiations. If moving in-network is a long-term possibility, then reach out to payors to see what the in-network rates look like. It may make sense to hire a managed care consultant to help you develop a plan for moving in-network or a plan for staying OON.
• Increased governmental oversight. A good long-term strategy for insuring legal compliance is to develop a legal compliance program. The program needs to be multifaceted and cover regulations set forth by all of the state, local and federal agencies. These agencies include HIPPA, CMS, OIG, your state health department and OSHA, just to name a few. A good healthcare attorney can assist you in developing your legal compliance program.
Q: What changes do you see on the horizon as far as specialty mix? Which specialties do you think will surge in 2012, and which will suffer?
JL: I think the majority of specialties will continue to be pushed into the ASC setting because ASCs are a lower-cost option with better quality outcomes when compared to hospitals. Specialties that have historically done most procedures in an inpatient setting will continue to surge in 2012 and beyond. With advancements in minimally invasive approaches, many of the following specialties (with examples of procedure types, when applicable) will see more and more procedures pushed to the ASC setting:
1. Orthopedic procedures — unicompartmental knee replacements
2. Urogynecology procedures — A&P repairs and slings
3. Gynecology procedures — laparoscopic hysterectomies
4. Spine procedures
When I think of a specialty that will suffer in the ASC setting in 2012 and beyond, cardiology [comes to mind]. Cardiology tends to be the largest specialty integrating with hospital systems, and therefore I see these procedures being done more in a hospital setting than an ASC setting.
Learn more about Arise Healthcare.
Related Articles on ASC Operations:
5 Strategies to Minimize Damage From Same-Day Cancellations
Social Media Use by Surgery Centers: Q&A With Kim Woodruff of Pinnacle III
30 Statistics on Pain Management in Surgery Centers
Q: What do you see as the top concerns for ambulatory surgery centers in 2012? How are those concerns different from the issues of the last year (or few years)?
Jared Leger: I think the top concerns facing ASCs in 2012 are as follows:
• Declining growth. Many physicians are being integrated into the hospital system, either through employment or alignment models with the hospital. The remaining ASCs are all pursuing the same few independent physicians in a given market. Each year, we see the number of ASC-eligible, independent physicians going down. It will be a challenge for ASCs to keep surgeons happy when other ASCs and hospitals are likely courting them. It will also be a challenge to increase ASC "same-store growth" without adding new physicians.
• Increased difficulty with payor negotiations. In the past, many employers purchased health insurance plans for their employees that included out-of-network benefits — and ASCs could count on them. This enabled ASCs to stay out-of-network with a given health insurance carrier as a negotiation strategy or leverage with the insurance carriers.
Many employers are looking to lower health insurance costs. As a result, fewer employers are purchasing health insurance plans for their employees that include OON benefits. If an employer does purchase a plan with OON benefits, the OON deductibles are typically very high. This is forcing many independent ASCs to go in-network with the insurance carriers with little or no bargaining leverage. When there is a surplus supply of in-network ASCs, the insurance payors are less inclined to negotiate with the ASC for better rates, carve-outs, etc.
• Increased governmental oversight. We are seeing an increased number of governmental audits and investigations. Some of these investigations are looking into physician relationships with the entity that he or she refers to. However, most of these investigations and audits are based on coding, billing, collections and medical necessity. Nearly everyone in the ASC industry is predicting that governmental investigations will continue to increase in 2012.
Q: What can ASC leaders do to tackle each of the concerns you mentioned? For each problem, could you discuss a short-term and long-term plan?
JL: Each of the problems I discussed can be handled with a short-term plan and a long-term plan:
Short-term plans
• Declining same-store growth. ASCs should look at adding new procedures and new technology. ASCs should ask existing medical staff if there are any procedures that could be done in the ASC setting if they had the proper equipment. We are seeing a lot of procedures that are typically done in an inpatient setting migrating to the ASC outpatient setting. This will allow for increased same-store growth if you are not able to attract new physicians.
• Increased difficulty with payor negotiations. If staying OON is your short-term plan, a good marketing strategy would be to locate the employers who purchase insurance plans for their employees that include OON benefits. Then market your facility and your specialists to those employees.
• Increased governmental oversight. Short-term strategies for insuring legal compliance could include a random coding audit or legal compliance audit by an outside healthcare attorney or consulting firm.
Long-term plans
• Declining same-store growth. As a long-term strategy, the ASC could consider aligning with a local hospital system in some way. Many hospitals are under financial pressure as well, and a symbiotic relationship can make sense — and help ASCs gain greater access to hospital-integrated physicians.
Another way to improve a center's growth is to market directly to patients. If you are able to properly educate the patient that ASCs provide lower-cost care with better quality outcomes, the patient may ask their physician to do their procedure at your ASC as opposed to the hospital.
ASCs can also market its specialists to other independent referrals sources. Such sources can include independent urgent care centers, independent family practice and internal medicine physicians and other independent specialists.
• Increased difficulty with payor negotiations. If moving in-network is a long-term possibility, then reach out to payors to see what the in-network rates look like. It may make sense to hire a managed care consultant to help you develop a plan for moving in-network or a plan for staying OON.
• Increased governmental oversight. A good long-term strategy for insuring legal compliance is to develop a legal compliance program. The program needs to be multifaceted and cover regulations set forth by all of the state, local and federal agencies. These agencies include HIPPA, CMS, OIG, your state health department and OSHA, just to name a few. A good healthcare attorney can assist you in developing your legal compliance program.
Q: What changes do you see on the horizon as far as specialty mix? Which specialties do you think will surge in 2012, and which will suffer?
JL: I think the majority of specialties will continue to be pushed into the ASC setting because ASCs are a lower-cost option with better quality outcomes when compared to hospitals. Specialties that have historically done most procedures in an inpatient setting will continue to surge in 2012 and beyond. With advancements in minimally invasive approaches, many of the following specialties (with examples of procedure types, when applicable) will see more and more procedures pushed to the ASC setting:
1. Orthopedic procedures — unicompartmental knee replacements
2. Urogynecology procedures — A&P repairs and slings
3. Gynecology procedures — laparoscopic hysterectomies
4. Spine procedures
When I think of a specialty that will suffer in the ASC setting in 2012 and beyond, cardiology [comes to mind]. Cardiology tends to be the largest specialty integrating with hospital systems, and therefore I see these procedures being done more in a hospital setting than an ASC setting.
Learn more about Arise Healthcare.
Related Articles on ASC Operations:
5 Strategies to Minimize Damage From Same-Day Cancellations
Social Media Use by Surgery Centers: Q&A With Kim Woodruff of Pinnacle III
30 Statistics on Pain Management in Surgery Centers