About 25 percent of physicians have made plans for early retirement during the pandemic, according to a Medscape survey, and several others say they have considered leaving medicine.
The ASC industry could be hit hard by early physician retirements if the trend continues. Fewer physicians coming out of medical school are choosing private practice because they graduate with large medical school debt and hospitals can offer signing bonuses to relieve some of that financial pressure. Early career physicians also may not have access to capital to start a new business or buy into ASCs.
Several surgery centers that opened in the early 2000s are reaching a stage in which the original owners are ready to scale back. Has the well run dry for potential physician investors?
"Physician retirement and recruitment are top of mind. I think some physicians are reevaluating their career timeline after having been through a very challenging 2020," said Tina Piotrowski, CEO of Copper Ridge Surgery Center in Traverse City, Mich. "They've had to deal with all of the COVID challenges in their practices, as well as for physician investors in their ASCs. So we're continuously focused on ongoing physician recruitment and retainment, both for investor and noninvestor physician users of our center."
She said her center helps support about 18 local physician practices, from solo practitioners to large groups, to ensure they remain independent and consider the surgery center an extension of their practice.
"Each practice has their own nuances and priorities, so supporting them is vital to our continued growth," Ms. Piotrowski said.
Karen Albright, nurse administrator of Riva Road Surgical Center in Annapolis, Md., is also focused on bringing in early career physicians and thinking about succession planning.
"A fair amount of our docs were seasoned when we built Riva Road Surgical Center, so we have to operationalize and weigh the exit strategies of our older physician partners with the incoming youth and making sure we maintain long-term success of the center by ensuring that we have providers with like minds," she said.
Ms. Albright said bringing in the new physicians is sometimes a balancing act because they were trained to perform more complex cases in the outpatient setting with new technology, whereas the original partners are more skeptical of bringing in high-acuity cases, such as total joints and complex spine surgery, into the ASC.
"We had to rearrange the mindset of the older physicians who originally were doing all their complex cases in the hospital and say it's ok, just because you're doing what you've always done doesn't mean you have to continue," said Ms. Albright. "You can be a trendsetter, and you can move to the outpatient arena, as many procedures are under the fee schedules now. The longevity of the center and long-term goals and planning are very important when you consider the outpatient arena."
The pressure on ASCs in some markets remains fierce as hospitals and health systems acquire physician groups and gain market share.
"We're in a really precarious position here in our demographic area," said Leasa Hermanson, administrator of Ambulatory Care Center in Vineland, N.J. "We have one hospital system, and it's a monopolistic environment for us. We've had some real challenges with the restrictive covenants in terms of recruiting physicians because a lot of the new docs are looking toward the big groups and hospitals, and once they do that, we can't utilize them."
As one of the only physician-owned ASCs left in her area, Ms. Hermanson said she has considered partnering with a larger entity such as a management company or hospital as the independent physician supply grows scarce.
"It is only because of our board of directors and their efficiencies, looking for every way to staff and finance things creatively, that we are able to manage without having a management partner or working with a hospital at this point," said Ms. Hermanson. "We have worked really hard to be able to keep things the way they are. I look for cowboys, the young guys who really want to make their own way. They are motivated, and they like to work, and we try to recruit that way. But I see that ASCs have a bright future in general, and I'm hoping that's the same case for us."
Ms. Piotrowski said her physicians have become big allies in recruiting new physicians to the area and center, especially among recent graduates.
"Some physicians that have been investors have realized [ASC investment] was a very wise thing for them to do, and they've been very encouraging for younger physician investors as well, despite having been through a pandemic where we had a percentage of our cases lost due to the elective surgery shutdown," she said. "They've been some of our biggest promoters in physician recruitment, and we've been excited to add more physician investors over the past six months."