Becker's ASC Review

6 ASC MANAGEMENT ASCs want to ditch insurers By Laura Dyrda P hysician groups and surgery centers are increasingly cutting insurers from the care delivery equation and contracting directly with employers and cash-paying patients. Insurers have increased the administrative burden on physicians and ASCs to approve and receive payment for surgery by disputing more claims and requiring ASCs to spend more time convincing the insurer's medical director that cases are necessary. But insurers must balance the delicate relationship they have with hospitals and members when developing ASC policies. "Insurers also are hesitant to approve poli- cies that favor ASCs, for fear it will cause issues with the hospitals," said Greg DeCon- ciliis, administrator of Boston Out-Patient Surgical Suites. "Even though insurers can experience substantial savings through the shi of the site of service to the ASC, they rarely approve pro-ASC policies or direc- tives. Instead of embracing competition, they prevent it from occurring." About 67 percent of employed, insured workers are covered under self-funded plan arrangements, where the employer contracts directly with healthcare providers and bears financial risk for the cost of care, according to a 2020 Health Affairs report based on the annual Kaiser Family Foundation Health Benefits survey "Given the difficulty with regulation around government and other third-party payers, the biggest opportunities for growth exist in companies that contract directly with patients and employer groups," said David Hardin, MD, chief medical innovation officer at Healogic in Denver. "Cash-pay surgery centers, disease-specific Centers of Excellence and direct primary care all offer improved outcomes and lower cost by removing much of the administrative cost created through the traditional third-party payer system." ASCs with the data capabilities to enter into bundled payments also see opportunities with direct employer contracts. "We're starting to see a lot of employer inter- est for the self-funded payers in the bundled payment arrangement," said Shannon Yar- row, senior vice president of managed care at Surgery Partners, an ASC company based in Brentwood, Tenn. "And that does put a little bit of risk on ASCs and physicians to make sure that they are giving high-quality care and selecting the appropriate patients for those bundles. But I do think that also leads to opportunities and more growth for vol- ume opportunities, and so saving the health system money." Surgery centers can also keep prices low by offering cash-paying patients a bundled rate. e Surgery Center of Oklahoma has tar- geted cash-paying patients since 2009, when the center's founder Keith Smith, MD, posted prices online. He built the cash-paying model aer becoming disillusioned with payers and the insurer model. Cash-paying and concierge practices are uncommon, but they could become more common, especially as large companies see benefits of transparent pricing and patients lose patience with insurers delaying care. "Companies like Crossover Health, Walmart and the Surgery Center of Okla- homa are addressing these issues," said Dr. Hardin. "Direct primary care, in particular, has built up a large grassroots founda- tion through organizations like the Direct Primary Care Alliance." n Why ASCs could beat inflation, per Warren Buffett By Laura Dyrda W arren Buffett, billionaire CEO of Berkshire Hatha- way, made a projection at the company's annual shareholders meeting that bodes well for ASCs during times of high inflation. "The best thing you can do is to be exceptionally good at something," he said, according to a CNBC report, noting that a skill in demand stays in demand regardless of inflation. "Whatever abilities you have can't be taken away from you. They can't actual- ly be inflated away from you," Mr. Buf- fett went on to say. "The best invest- ment by far is anything that develops yourself, and it's not taxed at all." Mr. Buffett's comments are good news for ASCs, especially focused- factor centers that have perfected a limited number of procedures. Single-specialty surgery centers have teams that perform the same procedures on a regular basis, mak- ing them better and more efficient than large hospital organizations where surgical teams rotate between specialties daily. Even multispecialty centers are in a better position because they're high quality, low cost care settings. And the need for healthcare, even "elec- tive" surgeries, won't go away. There were around 13.1 million surgical procedures performed in 2019 before the pandemic, according to a JAMA Network Open article. That number will likely increase with the aging population growing larger and as hospitals and health systems learn to maintain surgical volumes even during future surges. Surgery centers are poised to ben- efit, especially if they provide a great patient experience and data to show insurers the benefit of incentivizing patients into the outpatient ASC. Employers looking for a better deal on healthcare spending for employ- ees are also interested in what local surgery centers have to offer. Mr. Buffett shared similar advice in 2009 as the Great Recession was ending, advising companies to invest in themselves. His second most important piece of advice is also something for ASC owners to keep in mind: Invest in a business that is in high demand regardless of the dollar strength, because people are willing to pay for what they like even during periods of inflation. n

• Cover