Becker's Spine Review

41 OUTPATIENT SURGERY How competition for ASCs is changing By Laura Dyrda T he ASC landscape has evolved to become more challenging for independent centers and facilities reliant on low-acuity cases, but there are still opportunities to thrive in a compet- itive market. Question: What is the ASC competitive landscape like today and how can centers thrive? David Rothbart, MD. Medical Director of Spine Team Texas ASC (Southlake): Practices [in Texas] are the last holdouts of fiercely independent groups. But in the last couple of years the number of independent practices that have been folded into healthcare sys- tems has just accelerated at a logarithmic pace. What we're see- ing in this market dynamic of large chains that partnered up with healthcare systems here and then venturing off into ASCs owned by the healthcare system, ASC chain and practices. ose models in this market are doing very well. e truly independent ASCs, we're starting to see some significant struggles. As far as the opportunity for ASCs to distinguish themselves in competitive markets, the basic tenets of that, I don't think really have changed. I've been waiting to hear about cost and quality actu- ally mattering. In some markets it does. I can tell you here, neither of those has really mattered [in my market]. Although when you can come to the table and you can demonstrate cost and quality, it has resonated, but it has not had as big an impact in this market- place. Clearly, having the right leadership at the table so that the ASCs are very physician-friendly and ease of use is going to be im- portant. I also think having the capital to invest in technology to expand the service lines, like cardiology, is important. In my space, utilizing robotics or image guidance are big game changers, and that's how we have to attract the surgeons to want to do their procedures. In spine, it's a leap of faith to go from the hospital setting into the out- patient setting, and now that snowball's getting some momentum. Matt Searles. Partner at Merritt Healthcare Advisors (Ridge- field, Conn.): ere will be out-migration of lower-acuity cases. If it hasn't come to your market, it's soon to come. Payers are go- ing to push those procedures right into offices. You certainly can make up for it with the higher-acuity cases, and that's where you should focus. I do think that the focus on quality first is important, and it sounds cliché, but the biggest risk in this business is compli- ance, risk and patient safety. I think for the centers that focus on that in environments where payers are moving to at-risk models, that's where ASCs will continue to thrive and do well. We'll weed out some of those facilities that aren't focused on that, which has already been occurring.. n After 121 hospital sales over 6 years, CHS doubles down on ASC, outpatient growth By Laura Dyrda F ranklin, Tenn.-based Community Health Systems has sold 121 hospitals over the last six years and is nearing the end of a multiyear divestiture plan, and at the same time, the system has invested heavily into the outpatient space, the Nashville Post reported Feb. 19. Over the same time period, CHS has spent nearly $440 million in developing three ASCs and three freestanding outpatient-based emergency departments, with more in the pipeline. System CEO Tim Hingtgen said the system pivoted to the outpa- tient space because the centers are less capital-intensive. "We continue our emphasis on the development of service lines, thereby further increasing our acuity levels on the inpatient side," Mr. Hingtgen told the publication. "And our investments on the out- patient side are designed to expand entry points into our networks, providing more convenient out-of-hospital care environments that satisfy evolving consumer expectations about the availability and accessibility of healthcare services." CHS still operates 85 hospitals in 16 states. n OrthoArizona sells office building, ASC for $23.6M By Laura Dyrda P hoenix-based OrthoArizona sold its medi- cal office building and ASC real estate in a multimillion-dollar transaction facilitated by Fairfield Advisors, a national healthcare real estate advisory firm. OrthoArizona is a joint venture between physician owners and Dallas-based United Surgical Partners International. On Feb. 16, the practice sold its real estate in Gilbert, Ariz., for $23.6 million to a private equity group focused on healthcare real estate. OrthoArizona has 66 physicians and 22 locations in the state. It offers total joint replacement, spine surgery, sports medicine, physical therapy and ex- tremities care. The practice also has a foot and an- kle fellowship program. Fairfield Advisors has closed on $551 million of medical office building transactions, with a signifi- cant portion including orthopedic practices as the only tenant or the anchor tenant. n

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