As ASCs navigate the ever-changing healthcare landscape, building a resilient or even an antifragile business model has become essential.
At Becker's 30th Annual Business and Operations of ASCs Meeting in Chicago, Andrew Lovewell, CEO of Columbia (Mo.) Orthopedic Group, and Vishal Mehta, MD, president and managing partner of Geneva, Ill.-based Fox Valley Orthopaedic Institute, shared insights into achieving this goal.
Proactive leadership
For Mr. Lovewell, "a lot of things go down to whether you're going to be a proactive or active organization."
In response to supply chain shortages that challenged ASCs during COVID-19, Mr. Lovewell and his team took a proactive approach to prepare for future issues. When the IV fluid crisis emerged earlier this year, their readiness enabled them to secure necessary resources while nearby hospitals "panicked and shut down elective cases," he said.
"We plan ahead as opposed to a 'just wait and see' mentality," he said. "I think a lot of that we've just learned through turbulence and getting through the difficult times."
Dr. Mehta echoed these thoughts, emphasizing the importance of maintaining efficiency even during prosperous times.
"Even when times are good, you tend to allow things to fatten up a little bit, and you really have to be incredibly dialed in on the cost structure at all times so that you're ready for the lean years," he said.
Organization culture
An aligned organizational culture is another cornerstone of an antifragile ASC model.
In a physician-led or -owned model, there is often a strong focus on overhead and costs. However, Mr. Lovewell and his team prioritize "the tools and resources to chase that revenue instead of cost."
Dr. Mehta added that creating an environment where people want to work is crucial, especially as surgeons are drawn to the flexible schedules ASCs offer. He emphasized that this positive culture is a result of intentional effort.
Diversify everything
The recent IV fluid crisis underscored the importance of supply chain diversification for Dr. Mehta.
"We realized quickly that we could not get any fluids from any vendors that we did not have an existing relationship with," he said. "So we're changing that so that we have existing continued relationships with multiple vendors, not just around fluids, but around other things as well."
But diversification is not important only for supply chain; it also extends to the provider base.
Dr. Mehta shared an example involving a surgeon on his team who performs 500 total joint replacements annually. While board discussions favored increasing the surgeon's caseload, Mehta recognized the risk.
"We have to understand where our risks are all across the board," he said. "What happens if that surgeon gets sick and all of a sudden we lose 500 cases a year? That's a big deal. … We're growing the future, so that if one person gets knocked out, we're still viable."
Payer diversification amid consolidation is also key, Mr. Lovewell said, adding that having a nimble business model is critical amid this consolidation. Using direct-to-employer models or other partnerships with private practices are two strategies.
"Doing anything that you can to try to diversify your payer mix so you're not so consolidated on one payer is also super helpful," he said.
'Ruthless' focus on costs
With labor and supply costs on the rise, Dr. Mehta and his team maintain a "ruthless" focus on expenses.
This has included investing in analyzing case costs, providing surgeons with data on their spending compared to peers performing the same procedures.
"If you're not looking at [cost] every single day, you're going to be in trouble outside of that," he said. But ASCs also need to be prepared to "demonstrate your quality, to be able to demonstrate the fact that you're a cost-effective institution as you prepare to compete over the next 10 or 15 years."