Becker's ASC Review

8 ASC MANAGEMENT What happens when physicians sell their practices By Laura Dyrda P hysician practices are selling to hospitals and corporate entities at an accelerated rate during the COVID-19 pandemic. But what happens to healthcare when there is increased consolidation and less competition? Sev- eral studies over the past decade have examined these trends. Six notes: 1. e cost of care increases. e most concentrat- ed healthcare markets where physicians are part of health systems charge fees 14 percent to 30 percent higher than in the least concentrated markets, ac- cording to a study published in e Journal of Law & Economics. Physician costs in highly concen- trated markets were also higher than physicians practicing in the least concentrated markets. 2. e price of health insurance increases. In California, premium prices were up 12 percent in markets where there was a higher share of physicians employed by hospitals, according to a study in Health Affairs. Hospitals that don't have competitors within 15 miles charge on average 12 percent more than hospitals with four or more competitors, according to data from the National Bureau of Economic Research. 3. Outpatient services prices increase when hospitals acquire physician practices, according to a study published in JAMA Internal Medicine. Hospital outpatient departments are also able to charge Medicare more for the same services as ASCs, although patient deductible is lower for some services. 4. e quality of care suffers. Medicare beneficia- ries are more likely to choose high-cost, low-qual- ity hospital care when physicians are employed at the hospital, according to a study in the Journal of Health Economics. 5. Patients are less satisfied. A study published in Health Services Research found patients were more satisfied in markets with less hospital consolida- tion. 6. Physician income drops. Independent physi- cians earn an average of 0.8 percent more than physicians in hospital-owned practices, according to an article in Health Affairs. e study also found a $2,987 drop in income for physicians overall aer their practice is acquired. Medscape also reports independent physicians earn more than employed physicians and specialists, including or- thopedic surgeons. e independent orthopedists made $29,000 more than employed orthopedists in 2021. n ASCs compete with Walmart, Target and others for staff as minimum wage jumps By Laura Dyrda S urgery centers, hospitals and medical groups are used to competing with each other for nursing staff. Now, Walmart, Target, Amazon and other retailers are vying for the same personnel and willing to pay high wages. ASC administrators across the U.S. cited staffing as their top concern in 2022, especially as other organizations offer wage increases and sign-on bonuses. "In my area, staffing and nursing wages are very competitive," said Lianne McDowell, CEO and administrator of South Portland Surgical Center in Tualatin, Ore. "I've seen a big increase in wages for nurses. There is a lack of staffing and nursing, there is a lot of competition with the hospital benefits and wages that are really skyrocketing, not just 2 percent or 3 percent, but more like 20 percent to 30 percent increases." Walmart raised its minimum wage for all workers to $12 per hour in Sep- tember, with the average hourly wage being $16.40, according to a CNBC report. CVS Health and Walgreens Boots Alliance have plans to boost their minimum wage to $15 per hour. Target and Amazon also have minimum wages of $15 per hour, while the national minimum wage is $7.25. This means office staff, and even nurses in some cases, can receive higher pay for entry-level jobs outside of healthcare. Bloomberg reported earlier this year healthcare providers are having a hard time recruiting for office jobs, technicians and other positions because competing industries are able to offer higher pay. The competition can be especially fierce in rural areas, the report noted. n USPI plans to have more than 600 ASCs by 2025 By Laura Dyrda D allas-based United Surgical Partners International, a Tenet Health- care company, aims to add more than 160 ASCs to its portfolio in the next three years. USPI is already the largest ASC chain, beginning 2022 with 438 surgery cen- ters. During the J.P. Morgan Healthcare Conference Jan. 11, Saum Sutaria, Tenet CEO, said the company plans to have more than 600 ASCs by the end of 2025. Surgical Care Affiliates and AmSurg, the next largest ASC compa- nies, report about 250 ASCs in their portfolios. USPI aims to acquire 77 to 90 ASCs through 2025, and develop 30 to 40 new centers in partnership with SurgCenter Development. USPI added 86 SurgCenter Development ASCs to its portfolio last year after acquiring the company for $1.2 billion. USPI also plans to develop 32 ASCs with physicians over the next few years. With the huge expected growth, Tenet anticipates USPI will go from 43 percent of Tenet's adjusted EBITDA mix to more than 50 percent by the end of 2023. n

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