Becker's Spine Review

38 ASC Good and bad news for surgery centers: 10 notes By Laura Dyrda S urgery center owners see many posi- tive headwinds over the next year, but there are also challenges. Here are five pieces of good news and five pieces of bad news to know. Good news: 1. Orthopedic and spine surgeons are increas- ingly seeing ASCs as a necessity. During the pandemic, many hospital-based surgeons flocked to surgery centers and now don't want to go back to the hospital. Multiple orthopedic surgeons told Becker's in mid-April that ASCs were "saving" the orthopedic specialty because they support physician independence. More orthopedic surgeons owning surgery centers is good for the industry, and cardiologists are closely watching the trend as more heart pro- cedures go outpatient as well. 2. e federal government is looking more fa- vorably on physician ownership than in previ- ous years. e HHS Office of Inspector Gen- eral issued a favorable advisory opinion in late April for physician inventors to receive some ownership of a device company in exchange for product development. 3. e medical office real estate market is booming, creating an opportunity for ASC owners to sell high. Physicians who own their real estate may consider selling and then leasing back the space. e real estate for a 33,620-square-foot surgery center in Kansas sold for $15.3 million, and a 44,500-square- foot Louisiana-based ASC building was sold for $13.3 million earlier this year. 4. e Justice Department is increasing efforts to target restrictive noncompete agreements and monopolies in healthcare, which could fa- vor ASCs. Surgeons able to leave their burden- some noncompete agreements with hospitals could fuel ASC volume and ownership across the U.S., and efforts to break health system mo- nopolies could turn down the heat on ASCs in markets with one dominant system. 5. Surgery centers are in a great position to take advantage of the move to value-based care. e number of specialty surgeons choosing to merge into "supergroups" instead of becoming hospital-employed has increased, and super- groups have the economy of scale to support the sophisticated technology and data infra- structure needed for precision medicine and value-based contracts. ese groups also know the value of surgery centers and are doubling- down on growth. Bad news: 1. e number of physicians exiting private practice increased in the last year. Nearly three- quarters of physicians are now employed by hospitals, private equity firms, insurers or other corporate entities, while 26 percent remain in- dependent, down from 38 percent in 2019, ac- cording to Avalere. Physicians also own slightly less than half of all practices, around 46 percent. 2. e labor market remains tight across the U.S., with experts predicting the labor short- age could continue into 2023, according to CBS News. ere are around 11 million job openings across the U.S., while the number of unemployment claims hit just 184,000 in mid- April, the lowest level in 50 years. More com- panies are now offering perks such as remote work, higher salaries and sign-on bonuses that may not be possible for ASCs with tight mar- gins to offer to recruit and retain talent. 3. Surgery center owners and physicians across the U.S. are reporting efforts by insurance com- panies to increase prior authorization require- ments and ramping up denials. e additional paperwork and slower revenue cycle process means it takes longer for surgery centers to get paid, and some have had to hire extra collec- tions staff as a result. e difficulty with insur- ance companies has some surgery centers seek- ing out direct-to-employer contracts, cash-pay patients and other alternatives to rely less on the traditional insurance model. 4. ASC staffing costs are on the rise. Surgery centers spend on average $2.2 million on em- ployee salary and wages, which is around 21.3 percent of net revenue, according to the VMG Health "Multi-Specialty ASC Benchmarking Study." Pay for ASC administrators is also go- ing up, hitting $100,000 to $119,000 on average, according to OR Manager, which also reported around one-third of ASC administrators plan to leave their roles this year due to burnout, pay dissatisfaction, work culture and more. 5. Physician fee cuts are still on the table in Congress, as lawmakers continue to kick the can down the road for multiple planned Medi- care pay cuts. e president and Congress have so far avoided sequestration-related pay cuts for around a decade. e proposed Medicare pay cuts have now reached around 9 percent for physicians. Coupled with the potential cuts, the Medicare Payment Advisory Commission proposed in earlier this year that ASC pay shouldn't be increased in 2023, but it also indi- cated ASC pay should align with hospital out- patient departments and physician offices. n Health system takes ownership of orthopedic ASC By Marcus Robertson C olumbia, S.C.-based Prisma Health acquired the Moore Orthopaedic Clinic Outpatient Surgery Center in Lexington, S.C., according to an email shared with Becker's May 18. The center will be renamed Prisma Health Orthopedic Surgery Center. It is the health system's first licensed and accredited ASC. Prisma said in the email that previously scheduled surgeries will proceed nor- mally and that all physicians currently operating at the center will continue to do so. All of Prisma's orthopedic surgeons will be allowed to apply for operating privi- leges at the center, the health system said. n

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