From site-neutral payment reform to consolidation, four ASC leaders joined Becker's to discuss the market trends shaping the ASC industry.
Question: What market dynamics are affecting ASCs the most right now and why?
Editor's note: These responses were edited lightly for clarity and length.
Deann Davis. Administrator of Surgical Care Center (Painesville, Ohio): Cost effectiveness and the convenience of outpatient care are affecting most ASCs right now. Reduced overhead expenses and the elimination of the need for inpatient care, which contribute to more affordable healthcare without compromising the quality of medical services provided. Patient preference and advancements in surgical techniques also reduce the need for prolonged hospitalization which is cost-effective.
James O'Leary, MD. CEO of Real Doc Speaks: The market dynamic that is affecting ASCs now is the lack of site-neutral payments. Hospital outpatient departments are reimbursed significantly more than ASCs for the identical service. This makes no sense, and this kind of nonsense only occurs in healthcare. There should be one fee paid to both ASCs and HOPDs and that fee would be lower than the current HOPD fee and higher than the ASC fee. The other market issues are medical inflation and difficulty obtaining anesthesia services.
Vladimir Sinkov, MD. Founder and CEO of Sinkov Spine Center (Las Vegas): The volume of spine surgeries at ASC is growing. There is, however, a lot of consolidation going on as well. As independent ASCs are getting purchased by large firms or hospital systems, there will be less competition which will inevitably lead to higher costs and lower quality. This will slow down the growth to a degree as there will be less difference between performing a spine surgery at an ASC versus HOPD.
Cherilyn Smith. Administrator of St. Johns Surgery Center (Fort Myers, Fla.): Today's market dynamics scream apprehension as inflation teeters and consumer credit debt continues to rise, and with a change of administration or a continuation of the same, either could have far-reaching impacts. The care provided by ASCs is elective, mostly covered under private or federal insurance plans, and while the way has been paved through a decades’ long struggle for a more even playing field of reimbursements, that goal remains far from reach today. Proposals for possibly eliminating private insurers and/or advocating for a single-payer system for all could prove grossly detrimental to the ambulatory realm. Far too many rural and smaller healthcare facilities have tragically fallen prey to the dynamics of financial impediments while nearly a quarter of healthcare companies backed by private equity filed for bankruptcy last year. Even larger healthcare corporations are not immune from fiscal demise. Ambulatory centers are for-profit operations and to remain solvent, the cash must flow, either from contracted private insurers, increased federal reimbursements or the almighty self-pay. Whoever succeeds in power in the coming months may have a large influence on that potential on an already struggling healthcare battlefield.