Here are three growing threats that continue to plague ASCs:
Dwindling anesthesia coverage
ASCs are facing continuing obstacles to securing anesthesia coverage amid a growing shortage driven by both increased demand and providers leaving the industry.
This issue will likely continue as nearly 30% of anesthesiologists are projected to leave the practice by 2033, according to a 2023 white paper from Medicus Healthcare Solutions.
"The biggest threat to ASCs right now is stable, cost-effective anesthesia coverage," Kelly Fowler, administrator of Vestavia Hills-based Surgical Institute of Alabama, told Becker's. "Subsidy and stipend requests are acutely affecting all our bottom lines."
The threat to ASC revenue is significant. Surgical services make up about 60% of a facility’s revenue, according to the Medicus report, meaning that the dwindling number of anesthesia providers has consequences for patient care as well as revenue.
Rising costs
Supply and staffing costs are continuing to rise, leaving ASCs struggling to meet margins. ASCs with an operating budget of $3 million or more hit 43% in 2023, compared with 32% the previous year, according to a survey from OR Manager. Median medical and surgical supply cost per full time employee jumped 82% from 2013 to 2022.
Additionally, drugs and other medical supplies made up 26.3% of ASC operating revenue in the last year, according to data from EDM Medical Solutions.
"Margins continue to run thin as we are dealing with rising operational costs across the board, coupled with stagnant reimbursement rates," Greg DeConciilis, administrator of Boston Out-Patient Surgical Suites, told Becker's. "It is important, now more than ever, to ensure you are increasing efficiency and reducing waste."
Inflation — specifically in healthcare — also continues to rise. The Medicare Economic Index, which measures medical practice cost inflation, increased 4.6% in 2023, the highest in the last 23 years. Some ASCs have had to spend a quarter or more of their net operating revenue on employees to stay ahead of shortages.
Declining reimbursements
ASCs are struggling to meet margins as procedures continue to migrate to the outpatient setting but reimbursements stagnate. CMS' finalized payment rate for ASCs was 3.1% in its 2024 final rule, a decrease from 2023's 3.8% payment rate.
"The biggest threat is payer reimbursement for ASCs," Raghu Reddy, chief administrative officer at SurgCenter of Western Maryland in Cumberland, told Becker's. "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."
Adjusted reimbursement for GI procedures decreased an average of 33% from 2007 to 2022, according to a study published in the American Journal of Gastroenterology.
"How does one expect to engage the payers when they are so slow to respond to an email and negotiate contracts or rate increases?" Mr. Reddy added. "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."