From anesthesia provider shortages to rising practice costs, four ASC leaders joined Becker's to discuss the biggest threats to ASCs right now.
Editor's note: This response was edited lightly for clarity and length.
Toni Barnas. Associate Consultant at Consultants in Healthcare (Little Rock, Ark.): I think some of the biggest threats to ASCs are the rising staffing and medical supply costs in comparison to the relatively flat/stagnant insurance reimbursement. Also, physician recruitment is becoming more challenging since many physicians are opting to be employed by hospital systems instead of going into private practice.
Kelly Fowler. Administrator of Surgical Institute of Alabama (Vestavia Hills): The biggest threat to ASCs right now is stable, cost-effective anesthesia coverage. Subsidy and stipend requests are acutely affecting all our bottom lines
Josh Mastracci. Director of an Investment Bank TM Capital's Healthcare Practice: Movement towards increased regulatory scrutiny of institutional investment in ASCs is troubling as it has already started to inhibit physicians' ability to finance continued growth of and improvements to these facilities. A growing segment of the private equity and credit market is increasingly hesitant to explore investment in situations where potential transactions may be denied in late stages of diligence by state officials - as would be the case in California, for example, where AB-3129 will authorize the state AG to approve or deny private investment in healthcare entities.
Raghu Reddy. Chief Administrative Officer at SurgCenter of Western Maryland (Cumberland): The biggest threat is payer reimbursement for ASCs. This topic has been beaten to the pulp lately, but we are not seeing any quantifiable results. Most ASCs struggle to get rate increases from the payers; with rising costs across most cost buckets, the profit margins are decreasing rapidly. To complicate things further, many ASCs are also plagued by anesthesia subsidies that reduce profitability. The common sense legislative question is why the ASCs are struggling to provide high-quality care, outcomes, and patient satisfaction scores while decreasing the cost of healthcare compared to the hospital outpatient department setting. ASCs are a mature market, and we can no longer afford to hide behind the naïve curtain. There are many expert discussions about the payment parity between ASCs and HOPDs, but there has been no actionable response from payers or legislators.
How does one expect to engage the payers when they are so slow to respond to an email and negotiate contracts or rate increases? I believe these tactics are an elusive strategy not to pay for performance. ASC leadership has to find creative ways to put cost items and workflows under a microscope to tame the highest areas of expenditure, but this process will lose steam if the payer reimbursement strategy doesn't change soon. Physician recruitment is also becoming challenging as hospitals develop their ASC strategy and continue to employ physicians. For ASCs to thrive, there must be a change, and the payers must play the game fairly and level the playing field.