Becker's ASC Review

14 ASC MANAGEMENT 10 big challenges for ASCs By Laura Dyrda O ne year ago, many ASCs were closed or at limited case volume to divert resources to hospitals treating COVID-19 patients. A year later, the pandemic has had some silver lining in driving more cases outpatient, but there are several challenges ahead. ASC owners and operators will have to navigate their organizations through a new healthcare ecosystem emerging in the next 12 to 24 months. Ten challenges: 1. Boosting case volume. e COVID-19 pandemic, and other natural disasters last year, depressed ASC volume because centers temporarily shut their doors. While many ASCs have resumed op- erations, other factors are keeping them from reaching 100 percent capacity. Social distancing measures and lack of supplies force cen- ters to lower their daily case volume. Unemployment in some areas will continue to challenge surgery centers, as patients don't have access to insurance or necessary funds to undergo elective surgery. ASCs will need to find new ways to boost case volume, through facility expansion, adding services, employer partnerships or accept- ing alternative payment plans. 2. Industry consolidation. Insurance companies are consolidat- ing and creating narrow networks that exclude small groups and providers in some markets. ASCs have few options if they're le out of the networks, or offered low rates. ASC owners may then consider selling to a hospital, joining a national chain or entering into direct contracting with large employers to offer value-based services. 3. Negotiating with insurers. Over the next several months, many ASCs will face tougher conversations with payers than in the past. Commercial insurers are eager to move cases to ASCs, but that doesn't mean their rates will be favorable. Payers are anticipating an influx of members undergoing surgery and pursuing other medical services postponed during the pandemic; they will be more aggres- sive in future negotiations as a result. 4. Transparency mandates. e federal government requires hos- pitals to post negotiated payer rates online for hundreds of common services, and similar mandates could be applied to surgery centers in the future. MedPAC also recommended Congress collect ASC cost data earlier this year. e increased price transparency could be a boon for ASCs as the low-cost provider, but it will also depress prices among surgery centers in competitive markets. 5. Hospital competition. e pandemic drove more high-acuity cases to ASCs, including joint replacements and spine surgeries, as an alternative to hospitals treating COVID-19 patients. ese specialties are high-reimbursing for hospitals, and the continued mi- gration of these procedures will trigger more competition between independent centers and hospital-based ASCs. Vip Nanavati, MD, of Humphrey Shoulder Clinic in Eagle, Idaho, foresees hospitals increasing lobbying efforts at the state and national levels to increase regulations and barriers to entry for ASCs as a result. 6. Data-gathering costs. ASCs need to become more sophisticated with data-gathering and reporting, which will require purchasing new electronic records systems and upskilling staff, or hiring new team members. Centers need to have clinical data, payer data and cost data readily available as healthcare becomes more transparent. 7. PPE costs. e price of masks and gloves remains high aer shortages in 2020 boosted prices to record levels. ASCs will continue to spend more on supplies to keep a larger stock on hand and acquire new personal protective equipment, like N95 masks, to be ready for emergencies. ASCs will have to make room in their budget for these supplies without seeing an increase in reimbursement levels. 8. Robotics costs. Orthopedic surgeons are training on robotic technology and other advanced systems at higher rates than in the past, and want to use them in the ASC. Even with a pricing structure designed for surgery centers, robotic systems are a large expense. However, administrators of orthopedic centers across the U.S. are trying to find room for them in the budget to attract more surgeons to the ASC and compete with local hospitals for those cases. 9. Growth costs. Surgery centers that went into stealth mode during the pandemic instead of moving ahead with growth plans may have a bigger bottom line now, but value in a potential sale is lower. A center's valuation depends on future potential, and ASCs without a clear growth pathway will have a lower price tag. ASCs that did move forward with committed investments in technology and infrastructure last year have a bigger debt load now, but will be more valuable in the future. 10. Staffing. Hiring great staff members will be a challenge going forward. Many nurses le the profession during the pandemic, and centers that laid off staff last year are having trouble filling those spac- es. Some ASCs are also expanding their hours to later in the evening or weekends and finding it difficult to staff during the off times. n Why this South Carolina hospital is appealing a $12.5M ASC By Patsy Newitt Orangeburg, S.C.-based Regional Medical Center has appealed the state's approval of a $12.5 million phy- sician-owned ASC, dubbed Ambulatory Partners, The Times and Democrat reported April 29. The hospital is looking to build its own ASC, a $2.4 mil- lion center converted from an existing dialysis center, and has received a certificate of need from the state to build it. Dion Franga, MD, one of the physicians trying to open Ambulatory Partners, told The Times and Demo- crat that RMC is arguing that its ASC is "superior" to Ambulatory Partners. "The decisions, background and justification for RMC›s hastily developed project [are] now up for further review," he said. Ambulatory Partners said both centers are needed and has not appealed RMC's certificate of need. The case is currently in the discovery phase, Dr. Franga told The Times and Democrat. n

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