Becker's ASC Review

18 TRANSACTIONS Physician's new ASC playbook By Patsy Newitt A s ASCs continue to proliferate and consolidate, both hospitals and physician groups are rethinking their strategies to remain financially viable and competitive. Marc Greenberg, MD, an orthopedic surgeon in Baltimore, Md., joined Becker's to discuss the incentives behind shared ownership models, and why some independent groups are opting to build smaller, more distributed surgery centers. Editor's note: is interview was edited lightly for clarity and length. Question: With more employed physicians receiving equity in ASCs through their hospital employers, what are the benefits of this model for both sides? Dr. Marc Greenberg: It's all incentive-driven. Payers want surgeries performed in more cost-effective settings, and there are two key dynamics at play. First, among the private groups that still exist — if you're a total joint surgeon or doing endoscopic spine — you can take your case to a surgery center you own, instead of doing it at the hospital. From the hospital's perspective, that means a loss of revenue. But if there's a partnership — oen between a private group and a hospital — the hospital may put up the capital, and ownership is typically split, say 50/50 or 49/51. It becomes a win-win: the hospital retains some surgical income, and the surgeons gain ownership and benefit from the ancillaries. For employed physicians, there are already clear benefits: stability, no overhead worries and so on. But giving them ASC ownership adds incentive. It motivates them to be higher-volume surgeons, rather than just hitting base salary and productivity bonuses. So again, it's a win-win when both parties have a stake in the ASC. Q: Many private practices and physician groups are financially tied to ASCs. Can you explain the considerations behind building new ASCs versus investing further in existing ones? MG: I think it's partially a market share issue. Private groups are consolidating for a variety of reasons, and one challenge they face is, let's say three big groups come together but only have two ASCs. Suddenly, the income each partner receives from those centers may go down. So to expand your presence and reach more patients—to be where the patients are—you can build smaller ASCs, cover a larger geographic area, maximize capacity, and run efficiently. at's in contrast to having one large ASC where you're trying to get patients to drive 45 minutes. One of the trends I see is building smaller ASCs that you know you can fill, rather than relying on one big center. n The financial threats facing ASCs By Patsy Newitt F rom the potential fallout of federal legislation to the rising costs of anesthesia services, two ASC administrators joined Becker's to discuss the biggest financial threats they're monitoring this quarter. Question: If you had to name one financial threat you're watching closely this quarter, what would it be? Editor's note: ese responses were edited lightly for clarity and length: Suzi Cunningham. Administrator of Advanced Ambulatory Surgery Center (Redlands, Calif.): We are watching closely how the H.R.1 bill is likely to impact our center and others like ours. We live in an area of California that has a large population of patients that depend on Medi-Cal services. ere is concern that if these patients lose coverage, they will stop seeking out care. Or those that seek care, will be unable to afford their patient responsibility, or will be uninsured. Ultimately, it is too soon to tell. We remain hopeful that the impact of the bill will be gradual, and as such, will allow those that may lose services time to take the necessary steps to meet the new requirements, so they can maintain their coverage. Bottom line, we will be watching the impact of this bill closely so we can be as prepared as possible. Stephanie Kirby, RN, CASC. Administrator of the Surgery Center at the Forum (Columbia, Mo.): e biggest threat we are keeping our eye on is our contracted services with anesthesia providers. Anesthesia providers have such a shortage, and their rates they are charging keep going up and up. n Private equity firm acquires Texas surgical hospital By Ariana Portalatin I RA Capital, a private equity firm, recently acquired Houston Physicians' Hospital in Webster, Texas, Citybiz reported July 7. The 148,950-square-foot facility is a multi-specialty surgical hospital and outpatient campus leased through a joint venture between the physicians, Memorial Hermann Health System, and United Surgical Partners International. Houston Physicians' Hospital was founded in 2005 and includes more than 240 physicians from 25 specialties. n

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