Becker's ASC Review

9 ASC MANAGEMENT ASC leader pay soars By Laura Dyrda ASC leaders reported big earnings growth in the last year with more than three quarters now earning six figures, according to OR Manager. e publication surveyed 139 ASC leaders March 22 to June 8, 2023, primarily from physician-owned or joint venture surgery centers. In the annual survey, 77% of ASC leaders said they made $100,000 or more, up from 58% year over year. e full salary breakdown is: 1. Less than $100,000: 23% 2. $100,000-$119,999: 32% (up from 23% year over year) 3. $120,000-$149,999: 28% (up from 22% year over year) 4. $150,000-plus: 17% (up from 6% from 2021) e report noted most director-level and administrator respondents reported $100,000 to $150,000. About a quarter of nurse managers reported average annual earnings at $120,000 to $149,000. Twelve percent of ASC leaders said their overall compensation package is more than $200,000. ASC leaders are expanding their responsibilities with increased salaries. Leaders now supervise an average of 40 full time equivalent positions and more than half say their operating budget increased, according to the report. About a quarter of leaders manage four operating rooms, while another quarter oversee two-OR facilities. Average annual salaries for ASC leaders varied by region as well: 1. 35% of leaders in the West earned $150,000-plus 2. 31% of leaders in the MIdwest earned $120,000 to $149,999 3. 52% of leaders in the South reported $100,000 to $119,999 4. 44% of leaders in the Northeast reported $100,000 to $119,999 n ASC rent costs skyrocket in 2024 By Claire Wallace R ental rates for new de novo ASC space have skyrocketed in recent years, as labor costs, wood and steel prices have all increased through 2023 and into 2024, according to the 2024 "Medical Outpatient Building Outlook" from advisory firm Stout. Between 2018 and 2019, developers saw a cost increase of 10% to 30% in construction, with an additional 15% to 20% price increase in the last several years. To make up for raising construction costs, developers are driving up rent costs. Between 2020 and 2021, ASCs were generally priced at $550 per square foot. Now, new ASCs are generally priced at or above $650 per square foot, an increase of 18.8%. In 2020 and 2021, developer rent yields were generally pricing at 6.75%. Currently developer yields are generally pricing at 7.75%, seeing an approximate 35.7% increase in rents. Over roughly the same period, reimbursements from CMS have been slightly under 10.0%, according to the report. New medical outpatient space is generally achieving rental rates ranging from $28 to $35 per square foot, net on a national basis — an approximate $5 to $10 per square foot increase over 2019 levels. n Good news for ASC administrators By Paige Haeffele A s more procedures migrate to ASCs, an increasing number of healthcare players are taking an interest in the outpatient sector. Additionally, several other industry developments may point to a promising future for ASCs. Here are five good news items for ASC administrators: 1. Burnout is declining. According to a report from the American Medical Association, burnout rates among physicians dropped below 50% for the first time since 2020. After hitting a record high of 62.8% in 2021, only 48.2% reported at least one symptom of burnout. 2. Healthcare executives are looking to outpatient care. In a January survey by VMG Health, 60% of health system leaders, including CEOs, CFOs and other executives, said they are considering outpatient surgery joint ventures — the highest of any service line. 3. Research points to significant ASC market growth. A July report by Research and Markets projected that the U.S. ASC market will reach $60.8 billion by 2030, a valuation jump of $20.4 billion compared to the market's last growth prediction from 2023, which predicted a valuation of $40.4 billion. 4. Inflation fell for the first time in more than four years. An analysis by CNBC found the consumer price index fell by 0.1% from May to June, shifting the 12-month rate to 3% — the lowest level in more than three years. 5. Private equity's role in healthcare is under scrutiny. Sens. Elizabeth Warren and Ed Markey of Massachusetts introduced legislation targeting "corporate greed and private equity abuse" in the healthcare industry in June. The Corporate Crimes Against Health Care Act of 2024 aims to address a rise in private equity control of healthcare facilities, including hospitals and ASCs. n

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