Americans are changing their view and approach to surgery. As insurance constraints and rising health costs create problems obtaining and affording care, more people are turning to the outpatient setting for quality surgery at a fraction of the cost.
What is the outlook for industry growth of outpatient centers in coming years? How are these surgery clinics structured? Who owns them? Join us as we seek answers to these questions and more from industry thought leaders. We also share the insider secret to boosting your ambulatory surgery center financial performance.
The number of ambulatory surgery centers (ASCs) in the U.S. is expected to incline steadily from this year out to 2024, at least. Ambulatory surgery center market growth is expected to rise substantially by 2024 according to a new market report published by Global Market Insights in April 2018. According to the summary:
- The global ambulatory surgical centers market size was valued over 65 billion in 2017
- The value is expected to experience a five percent CAGR from 2018 to 2024
- As the prevalence of chronic disease increases, so will the demand for outpatient surgery
- The United States accounts for eight percent of the entire world population of those suffering from chronic disease, which is going to add more fuel to the ambulatory surgery center revenue cycle growth
One of the unfortunate effects of rising healthcare costs is that patients are often unable to afford the medical services they need, including surgical procedures.
[Read also: What Do Healthcare Consumers Really Want?]
As a result, the industry is providing new ways for patients to obtain these services. In a time when all providers and health centers are feeling the effects of rising healthcare costs and forced to charge more for their services, the ASC industry stands apart from the pack as being a service that consistently has a lower price tag for high-quality services.
One of the most successful and effective healthcare service models that arose from this demand is the outpatient surgery setting. =What is an ambulatory surgery center? According to the Ambulatory Surgery Center Association (ASCA):
“Ambulatory surgery centers (ASCs) are health care facilities that offer patients the convenience of having surgeries and procedures performed safely outside the hospital setting. Since their inception more than four decades ago, ASCs have demonstrated an exceptional ability to improve quality and customer service while simultaneously reducing costs.”
Ambulatory Surgery Center Resurgence and What You Need to Know
Perhaps you are wondering who owns these standalone outpatient surgery centers. Are they part of a larger health system? Sometimes. Are they privately owned? Sometimes. The National Law Review published an article on May 24, 2018, that took a deeper look at the ownership of ambulatory surgery centers and what considerations were in order regarding internal structure.
During the last couple of years, ambulatory surgery centers’ revenue management teams were trying to figure out why they were experiencing a stagnant or flat period in which the experienced little to no growth. In fact, during this time, these outpatient centers were solely focused on priorities and startup while they opened new centers and larger players were buying out the smaller centers and acquisitions were popping up left and right (this same trend continues today, read about recent healthcare mergers here). The following seven thoughts published in National Law Review article that covered the ownership and structure of ASCs and took into consideration current industry trends and working models:
- Anti-referral laws are affecting the ASC landscape. Special considerations apply to healthcare services rendered at an ASC because the ownership of and referral to an ASC are not regulated under the federal Stark Law.
- Structuring the physician ownership of an ASC can be complicated. The following three best practice guidelines were offered in the article. Read the recommendations at the full article on the National Review website.
- Investors are advised to only allow physicians who are part of medical practices with provisions for the rendering of medical services at the ASC, also known as “extension of practice”.
- A general rule of thumb is that if a physician invests in an ASC, he should have a requirement that at least one-third of his ASC-type services be provided in the center.
- Physician investors should be required to pay market value for any investment or interest purchased.
- Creating hospital-physician joint ventures brings more revenue and splits ownership between hospitals and physicians. The draw to this model came as a result of physician-owned centers that were unable to draw in enough patients in order to maintain the competitive low managed care rates.
- Management company ventures are a common type of ASC structure that splits ownership with a property developer/investor group/manager and physicians. Negotiations between the parties determine the relationships, organization, and management of the company.
- Ownership of ASCs by group practices can be tricky in nature, even more so in situations when the group is multispecialty. The National Law Review article explains that: “The OIG has taken a dim view of these arrangements argue that practice owners who do not perform surgical procedures will benefit from their referrals to those who do. We believe that despite the OIG’s reservations, these arrangements can be structured in a legally compliant manner.”
- Non-compliant physicians who are owners of an ASC and fail to use and support the center create challenges. Situations such as these build up an environment ripe for resentment between the physician investors who actively support the center and those who don’t.
- Legal challenges faced by the owners of ASCs arise for various reasons, including billing issues with insurance companies. Other legal battles occur due to the differences regarding federal and state regulations and how they apply to surgeries performed within the centers versus in healthcare facilities.
Improve Ambulatory Surgery Center Financial Health with Performance-Driven Analytics Software
SSI ASC Analytics provides ambulatory surgery centers with an enormous suite of:
- Intuitive analytics
… which can be utilized by practically any staff member regardless of their experience level. Intelligent guidance walks users through the program making it ideal for everyone from the analytics wiz to a nurse administrator. Users are engaged and the guesswork and intimidation dissipate.
Organizations can intelligently use this data in order to drill down and solve their most pressing issues. SSI ASC Analytics provides surgery or outpatient centers with the necessary perspective to make better use of resources and smarter business decisions that lead to growth and ambulatory surgery center financial health. Learn more about our ASC Analytics solution here.