Issue link: https://beckershealthcare.uberflip.com/i/1295290
16 Executive Briefing The effect of the pandemic Will the trend toward total joint replacements in ASCs continue post-pandemic? Mr. Taparo thinks so. In March and April, hospitals and ASCs across the U.S. experienced a severe disruption in case volume and revenue as states temporarily halted elective procedures to focus resources on treating patients with COVID-19 and to minimize the spread of the virus. Since then, most hospitals and surgery centers have resumed more normal operations. Many have hit 90 percent or more of their typical elective surgical volumes. Mr. Taparo said Surgery Partners' revenue from physicians recruited in 2020 through June is up around 37 percent year over year. "The strength of our business model and the execution of our leadership team and front-line associates has enabled Surgery Partners to persevere during the pandemic," said Surgery Partners executive chairman of the board Wayne DeVeydt during the company's second quarter earnings call in August. "We are cautiously optimistic we can maintain our current trajectory for the second half of 2020, and we remain confident in our long-term growth. Our confidence in our model and our value proposition was underscored by the 2021 Medicare hospital outpatient prospective payment system and ambulatory surgical center payment system proposal from CMS." During the second quarter earnings call, Surgery Partners CEO Eric Evans indicated the company could overcome potential COVID-19-related disruptions in the future. "The temporary suspension of elective procedures depressed overall volume [earlier in the year] but we remain cautiously optimistic as we look into the second half of the year based on our most recent results and the outstanding efforts of all our team members." Even through the pandemic, Surgery Partners reported same-store case volume as a percentage of prior year totals was up 19 percent to 93 percent from April to June. "Based on the strict protocols we have implemented and because our facilities generally do not treat [COVID-19] patients, we continue to believe we are uniquely positioned to be a safe haven for elective surgeries, and we are committed to serving the healthcare needs of our communities as this crisis unfolds," Mr. Evans said. Robotic technology One technology that helps surgeons bring more complex procedures into the surgery center is robotics. There has been an uptick in ASCs purchasing robots for orthopedic procedures in the past year, and Surgery Partners is working with its centers to acquire the technology. "We feel it is important to provide our physicians with the latest technologies available. Many new physicians are being trained in residency and fellowship programs on these robots and expect them to be available post schooling," Mr. Taparo said. "Therefore, we are in the process of implementing a facility specific robotic strategy in markets where there is a physician demand and the financial analysis justifies the capital investment." While purchasing the robot is an extra capital expense, Mr. Taparo said manufacturers realize the reimbursement differential between ASCs and hospitals is significant and they will need to develop a separate strategy for the surgery center market. Surgery Partners has been working with the manufacturers to develop a cost structure that makes sense for the ASC business. Over a 90-day period in 2020, Surgery Partners added four robots to its ASCs and plans to continue evaluating other opportunities. The company is also considering additional investments for its centers based on size and capabilities to accommodate for new procedures and expected increased demand over the next several years. "Many facilities have started to invest in robotics and will continue to evaluate the needed capital investment in cardiac and spine procedures," Mr. Taparo said. Outlook for ASCs Mr. Taparo said Surgery Partners' outlook on the ASC industry is positive, and he sees Medicare continuing to support the transition of cases to ASCs in the next several years. "These changes will continue to increase the success of ASCs coupled with payer pressure on hospitals and providers to deliver a lower cost, higher quality care alternative," he said. "Patients continue to become more sophisticated in researching and making decisions related to their healthcare needs. Many are already requesting a more convenient, low-cost solution and asking their physicians to consider an ASC for their surgical procedures." n Headquartered in Brentwood, Tennessee, Surgery Partners is a leading healthcare services company with a differentiated outpatient delivery model focused on providing high quality, cost effective surgical solutions in support of both patients and physicians. Founded in 2004, Surgery Partners is one of the largest and fastest growing surgical services businesses in the country, with more than 180 locations in 30 states, including ambulatory surgery centers, surgical hospitals, multispecialty physician practices and urgent care facilities. "Many facilities have started to invest in robotics and will continue to evaluate the needed capital investment in cardiac and spine procedures" Tony Taparo, Chief Growth Officer, Surgery Partners