Surgeon-owned ASCs are likely to become more prominent in the coming years due to the growth of the outpatient sector, physicians' desire to control the surgical environment and the potential to boost income.
Eight things to know:
1. Independent physician ownership ASCs can be a profitable business model, but comes with certain risks because of the complexities and rapidly changing nature of the reimbursement and utilization tied to ASCs.
2. More spine surgeons are expected to become involved in the leadership and ownership of ASCs. A recent survey of academic spine surgeons noted that 49 percent had investments in surgery centers. The surgeon-owned market segment is projected to grow at a compound annual growth rate of 4.9 percent between 2017 and 2024.
3. There are more than 160 ASCs now performing minimally invasive spine surgery in the U.S., which has seen a significant uptick in the past decade. Florida has 15 ASCs offering minimally invasive spine surgery, the most of any state.
4. ASC surgeons typically enter into partnerships for different reasons than administrators, according to a study conducted by professional services firm ZS. Most surgeons value partnerships for:
- Increased efficiency
- Access to a broader patient base
- Help with payer negotiations
- Access to funds/resources.
5. The ASC market is projected to reach $7.2 billion by 2025, up from $2.1 billion in 2020, according to MarketsandMarkets. The need for healthcare cost containment, improved care quality and continued operational efficiency will drive ASC market growth.
6. In September, Global Healthcare Advisors, a boutique investment bank focused on healthcare mergers and acquisitions, provided a snapshot of ownership distribution in the ASC market:
- Physician owner: 64 percent
- Physician-hospital owner: 24 percent
- Corporate owner: 4 percent
- Physician-corporate owner: 4 percent
- Hospital owner: 3 percent
- Physician-hospital-corporate owner: 1 percent
7. This year, 67 spine codes were removed from CMS' inpatient-only list, with plans to totally phase out the list by 2024. Patient demand, advancements in anesthesia, increasing adoption of minimally invasive techniques, and increased surgeon acceptance and comfort in the outpatient setting is driving more spine surgeries to be done at ASCs.
8. Surgeon-hospital joint ventures can mitigate the financial risks for providers, but specifics of these arrangements can vary greatly in terms of reimbursement, management and ownership.
Avanza Healthcare Strategies predicts that more ASCs owned by hospitals or health systems will be structured as physician-hospital joint ventures. As the trend toward joint ventures continues, health system leaders cite ownership by employed physicians and engaging outside managers as common issues, according to Avanza President and CEO Joan Dentler.