ASC management company Atlas Healthcare Partners was founded in 2018, and has since become one of the fastest growing management firms in the U.S.
Through partnerships with Banner Health and Corewell Health, Atlas has multiplied ASCs nationwide and created long-term value for health system and physician partners.
Atlas helped Banner's network expand from eight ASCs to 27 and Corewell to add three cardiovascular ASCs, an orthopedic ASC and two multispecialty de novo ASCs.
In 2022, Atlas formed a cardiovascular-focused ASC management company with consulting company MedAxiom.
Aric Burke, president and CEO of Atlas Healthcare Partners, spoke with Becker's about tips for success, employee retention and growth opportunities for ASCs in 2023.
Question: What are some of the keys to success for building a major ASC network like Banner Health's?
Aric Burke: What we've developed with some of our current partners is to look at four key metrics. One, what type of network does the health system need today and five years from now? We're trying to think about the future from a value-based care standpoint and from a delivery perspective. We help them look at where centers are needed geographically, what types are needed from a service line standpoint and what type of capacity is needed with operating rooms and procedure rooms. So one is the planning aspect.
Two is the physician alignment strategy. Understanding how the physicians fit in and compliment the network plan. So, how many physicians are employed now and in the future for each service line, how many are independent and what type of affiliated groups the system wants to work with, whether they'll offer ownership opportunities to the independent doctors as well as employed doctors. Those are all key aspects of the positioning strategy. We find ourselves working very closely with service line leaders to confirm we're helping them to align their service line strategies with their ASC strategies.
Three is the broader delivery network alignment. As these health systems become more than hospital companies, how do we align ASCs with hospitals, understand what's shifting to the outpatient setting and when, what the impact on hospitals is, as well as how we interface with primary care physicians and their various medical groups and other assets like labs, imaging and urgent care. There's a lot of connectivity from a network standpoint.
The fourth major area is ultimately the financial strategy and the market share strategy in terms of what kind of outpatient goals the health system has from a service line standpoint and just overall. What kind of case volume can we drive through the strategy — revenues, cash flows, earnings. These are both strategic and financial investments for the health systems, and we want to look at both. Those are the four major areas we look at when developing a health system's ASC strategy.
Q: How is your company, and your ASC network, retaining qualified and effective staff right now?
AB: Our model is focused on ultimately providing a very cost-effective and high quality community service. Physicians are our customers, and patients are customers of physicians. That's what our mission is based on is taking care of doctors and patients. In order to do so effectively, it starts with the team and the culture. We look at how to recruit the right people into our culture. We have one mission, one vision, one common set of values for the company. We try and recruit into those values, onboard people into that and focus on retention by making it a good place to work. We talk about employee engagement, surveys, activities around career development, with the goal of long-term retention. It comes down to having the right leadership at the right levels and focusing truly on engagement and making it a great place to work. We have a strong human resources team that has the right infrastructure in place. From an HR standpoint, that really leads to making it a good place to work that people want to stay at and be engaged.
Q: Has COVID-19 and its after-effects slowed or increased ASC growth for Atlas?
AB: In the early days, it was obviously a negative headwind. Ever since, it has been a positive thing from a shift standpoint. There is a realization that ASCs are high-quality sites of service, more cost-effective and from a convenience standpoint patients didn't have to go into hospitals that were dealing with COVID challenges. They could go to an ASC and have safe care. A lot of physicians increased their interest in ASCs. Our partners have a lot of employed physicians utilizing the surgery centers. We were able to stay open after the initial phase so it gave doctors a place to go do their cases when hospitals were being shut down for elective procedures. Physicians who were introduced to the ASC setting really liked it. We had a lot of development activity come up because of COVID. Doctors wanted to have a health system partnership because they realized the risks of being on their own, both from a capital standpoint and from a business standpoint. Our model allows independent doctors to stay independent by having a strong tie and relationship to a large health system. It gave them confidence to weather the storm. COVID was unpredictable, and having more stability was really helpful. We had a lot of tail winds out of COVID.
Q: What are some of the biggest challenges ASCs are facing right now? Any tips for overcoming them?
AB: Staffing is definitely a top challenge. Other ones that come to mind are anesthesia: supply, demand of resources and people. Anesthesia has really been a challenge, especially in more rural and remote markets. That's led to coverage issues; in some cases we haven't been able to keep all the operating rooms up and running. It has led to expense issues where we've had to provide some financial guarantees to anesthesiologists in return for coverage. And just overall inflation. Everything is more expensive. Even though reimbursement has technically gone up, so has the expense side. That puts a lot of strain on the profitability of ASCs. You have to manage costs more effectively than before. You have to have a really strong financial plan that not only focuses on cost control, but also growth. Ultimately, you have to be able to have growth through strong physician recruiting, retention, having service lines and other strategies. Being affiliated with a big health system has been effective in driving growth.
Q: Do you think independent, non-health system affiliated ASCs will be able to survive the next few years?
AB: I'm sure they can survive. It'll be more challenging as hospital employment of physicians increases, as well as networks starting to narrow. Our partners are looking to build up a network of ASCs they can use with broader strategy. So there is a lot of opportunity to partner with joint ventures. That gives a lot of options to partners for remaining independent on the physician side. Remaining independent on the ASC side in the long-term is going to be more challenging. Access to capital is harder. Getting reimbursement that's fair is harder. Managing all of the things that need to get managed on a one-off basis is hard with all the expenses and inflation pressures.
Q: What are some of the biggest growth opportunities for ASCs in the next few years?
AB: ASCs are so well positioned as physicians, patients and payers are more focused on cost. Even health systems that are becoming payers and taking risk are more focused on cost. ASCs are the natural solution. They're high quality, convenient, cost-effective, more patient- and physician-friendly. Our outcomes are just as good or even better in a lot of cases. They're well positioned for shifts of care out of hospitals, especially in higher acuity service lines. The cardiovascular line is just starting to emerge. A lot of states will see shifts of cardiology and orthopedics into ASCs. Length of stay for a lot of our cases is the same day or 23 hours. It can be done with better outcomes than a hospital setting. You will see cases shift out of hospitals, but especially higher acuity cases. That's why health systems are viewing ASCs positively as an extension of their network. By having a role in ASCs, they can make sure patients receive care at the right site of service but stay in the health system network.
Q: What new health developments are you keeping an eye on this year? New artificial intelligence? Trends? Procedure migration?
AB: Outside of procedure migration, which is significant, we are continuing to look at technology advancement to automate more things. We haven't quite figured out how to apply artificial intelligence yet. I think there's a need for more automation and better tech across the board. The ASC industry is still fragmented from a tech delivery standpoint. There are lots of different systems, but few systems that do a lot of things. They all have a niche. It's a fragmented, complicated solution currently. Hopefully that starts to become more efficient going forward.
Q: Is there anything else I missed that you would like to add?
AB: When we look at ASC strategy, we really work with outreach to have a strategic plan. I think it's critical that every center does that on a regular basis. We really do look at culture and set expectations and targets for building a great culture. We look at turnover, engagement, from there it's all about the service we provide. We look at safety outcomes, physician experience and patient experience. We have really focused on the customer side and how we can raise the bar. Every center should have a growth and profitability plan where they can say here are doctors we're recruiting in, what's our success with retention and organic growth of current doctors, as well as adding new service lines and connecting into the broader health system network. Also, with profitability, there are a lot of ways to create it, but you have to be intentional about it. Outside of bringing in new volume, look at managed care rates, constantly manage reimbursement strategies. Revenue is a big opportunity for most centers, but it can become a major issue if you don't manage the revenue cycle carefully. Obviously supplies and employment are challenges you have to manage. Overhead does add up. We have an intentional growth and profitability plan for every center that when you execute on that plan you see that good culture leads to good service, good service leads to growth. With growth you can also have very strong profitability when you manage it the right way.