Becker's ASC Review

39 Executive Briefing Sponsored by: Now is the time for ASCs to shine. The pandemic thrust healthcare into the spotlight as the nation responded to the biggest public health crisis in modern history. Patients with severe COVID-19 symptoms needed immediate attention, shifting resources away from less urgent, but still essential, healthcare needs. The potential to spread COVID-19 in the hospital drove many facilities to cancel or postpone services and in some cases patients are still weary of returning. But outpatient surgery centers, which didn't care for COVID-19 patients, offer a convenient option. Surgeons who previously bristled at sending patients home within 24 hours of surgery found they were able to perform outpatient procedures safely and effectively; patients that may have been nervous about returning home the same day as their procedure now are grateful to have a safe place to recover. And the trend isn't likely to slow down any time soon. "The patient and physician desire to have procedures performed in an environment that does not treat COVID-19 patients is consistent with their desire to have procedures performed in an environment with less risk of secondary infections," said George Goodwin, president of Surgery Partners' American Group, which manages ASC operations. "The restriction on the physician's ability to perform scheduled procedures in certain inpatient facilities resulted in an increased demand to use an ASC." Surgery Partners has been collaborating with physicians to form and grow their surgical centers since 2004. The company has worked with centers across the U.S. and used a personalized approach based on local markets to grow network enterprises. Over the past decade-and-a- half, Surgery Partners has expanded to include more than 180 facilities and 4,000 affiliated physicians that treat more than 600,000 patients per year. The company has guided 4-6% organic same-facility top-line growth annually and has consistently met this target since the beginning of 2019, evidenced by year-to-date same-facility revenue increase of 7.6% in 2019. The company works with physician investors to provide business expertise, economies of scale and resources for growth. Surgery Partners leverages existing relationships with payers to deliver value-based care arrangements, including through bundled payments. It also has a proprietary outpatient total joint replacement program, revenue cycle services and marketing support. The ASC industry is poised for growth in the coming decade and centers with the right management partnerships will realize clear benefits over independent centers. Partnerships give ASCs an edge When the pandemic initially hit the U.S., many states enacted elective surgery bans that severely lowered case volume at ASCs; some temporarily closed while others took in only emergent and trauma cases. The revenue hit centers took as a result of lower volumes affected strategic growth plans and in some instances required centers to furlough staff. When centers were able to return to full schedules, ASCs also faced personal protective equipment shortages and administrators had to find new ways to procure needed gloves, masks and gowns to move forward with the backlog of surgical cases. Over time, ASCs opened their doors to higher acuity patients and more surgeons experienced the key benefit of ASCs: more physician autonomy, efficient operating rooms and a safe environment for patients. Now, ASC owners and operators are using their competitive edge as a high-value healthcare provider to attract new patients and physicians. However, opening a new center or expanding an existing facility requires strategic leadership and key industry partnerships to maximize their potential. Here are three benefits of partnering with a management company. 1. ASC operations. Existing ASCs and surgeon groups are capitalizing on the need for more safe and efficient alternatives for outpatient surgery. There is heightened risk associated with the complexity of the clinical, regulatory and legal environment of the ASC, said Mr. Goodwin, and management companies can help surgeons successfully navigate those risks. The benefits of a corporate partner include: • Improved managed care contracting • Access to lower supply costs and implants through volume purchasing • Recruiting and staff management support • Assistance with adding new procedures and specialties • Investment diversification by selling a portion of their ownership "The primary benefit is the assumption of the day-to-day management of the ASC by the management company, which often leads to improved operating results and improves that Outpatient surgery is poised for growth — 3 ways strategic partnerships can give ASCs an edge

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