Becker's ASC Review

50 TRANSACTIONS These ASCs are the most likely to consolidate By Patsy Newitt Becker's was joined by 32 leaders who discussed the increasing consolidation of the ASC industry. Here are three factors that could push ASCs to consolidate: 1. ASCs in certificate-of-need states ASCs in states with certificate-of-need laws — which require healthcare providers, including ASCs, to receive permission to build facilities, make expansions or buy expensive equipment — could see more consolidation than others. "Overall healthcare continues to see significant consolidation, but ASCs should be somewhat less impacted related to the ability of physicians to own their own facilities — up to 100 percent of a facility," Adam Bruggeman, MD, CEO of San Antonio-based Texas Spine Care Center, told Becker's. "Certificate-of-need states will see higher consolidation while those states without certificate of need should see less consolidation when compared to the consolidation we see in the hospital market." 2. Single-specialty ASCs Single-specialty ASCs could be more likely to consolidate because it can allow them to access economies of scale. "Consolidation of single-specialty ASCs where only certain common surgical procedures are performed can result in better GPO contracts, more efficient supply management and improved revenues," omas Moshiri, MD, chief business officer of Scottsdale-based Arizona Pain Relief, told Becker's. "Add to that the efficiency that is derived from a patient safety and personnel standpoint of doing the same type of case over and over again. is is one direction in which ASC consolidation may move in the future." 3. ASCs in markets with strong health systems ASCs in markets with strong healthcare systems could be more likely to consolidate so they can compete with the deep pockets of hospitals. "In some areas, private ASCs seem to be booming. However, in my area, private ASCs are struggling to survive competing against big healthcare systems," Fawn Esser-Lipp, BSN, executive director of Franklin, Wis.-based e Surgery Center, told Becker's. "Short answer is that the consolidation trend will be dependent on the area. I do expect to see more ASCs combining their resources and forming their own MSO." n Ohio hospital to end outpatient activity: 3 things ASCs need to know By Patsy Newitt McLaren St. Luke's in Maumee, Ohio, said it will cease all outpatient services by mid-May. Here are three more things to know: 1. The hospital cited years of declining revenues and an unstable reimbursement environment as the reasons for closing. 2. Grand Blanc, Mich.-based McLaren Health Care and Cincinnati-based Mercy Health are working on a purchase agreement. With the deal, Mercy will acquire McLaren St. Luke's facilities, land and physical assets. 3. Mercy said it expects to offer employment opportunities to many of the hospital's physicians and employees. n The hottest ASC specialties for investments in 2023 By Patsy Newitt Investors are eyeing three physician specialties in 2023, according to McDermott Health's 2023 Physician Practice Management report. Here are the three specialties outlined in the report: 1. Gastroenterology Gastroenterology has high utilization of evaluation and management codes, which increased for 2021, priming it for investment in 2023, according to the report. Increases in the ASC fee schedule for GI procedures are also driving growth. 2. Cardiology Investors are eyeing cardiology as the number of single-specialty cardiology ASCs has skyrocketed in the last few years. There are still opportunities to move procedures from hospitals to ASCs, indicating "plenty of room for expansion in this sector," the report said. 3. Orthopedics With stable reimbursement rates and growing interest, orthopedics is enticing for investors. Particularly, private equity investors are enticed by orthopedics because of opportunities for value-based care. n

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