Issue link: https://beckershealthcare.uberflip.com/i/1543350
19 TRANSACTIONS do the market conditions embrace it — i.e., do payers and self-funded employers want to see providers take risk? Q: What is your pitch to surgeons who are hesitant to start making that switch? DT: Every indicator I can see — regulatory, policy, self-insured employers — points to true value-based care. at means providers are going to have to compete on value. Value, in the simplest sense, is clinical quality plus patient satisfaction divided by cost. I'm convinced it's coming at lightning speed, and surgeons and surgery centers are going to have to compete on value. Q: Why are the tides finally turning now? What makes now so urgent? DT: ere are three things, other than the general passage of time. One, self-insured employers see the benefit of value-based care and how it can change their spend. ere have been big employers — like Walmart — who said, "You're going to have to go to this location to have your total knee replaced," for example. Consumerism among patients and employees has grown over the last five years, turning them into real shoppers. Number two is the regulatory environment. A lot of commercial insurance companies follow what CMS does. Right now, the innovation department at CMS is pushing providers to take downside risk. And the narrative is changing: Should we have certificate-of-need laws? Should we have physician noncompetes? Narrative changes the market because early adopters want to get out in front of it. ree, we've been able to quit talking about value-based care in vague terms. Providers are homing in on what it means: clinical quality plus patient satisfaction divided by cost. When you can put an equation to it — and show savings along with a warranty — that gets people's attention. A lot of people say, "We've got 30% of our business in value-based care." No, it's not. Site-of-service shi and a small incentive isn't value-based care. We've got incumbents fighting change. But you can protect your business model all you want; it's not in the best interest of our country, and it's not in the best interest of the patients that we espouse to be serving. n OrthoCarolina CEO: When do JVs with hospitals make sense for ASCs? By Cameron Cortigiano T he emergence of ASCs and outpatient facilities has some in the industry questioning if joint ventures with hospitals are totally necessary. With the battle over the legality of CON laws ongoing in North Carolina, the idea of ASCs and independent groups being forced into joint venture partnerships with hospitals could be brought under the microscope. If hospitals aren't needed to provide the operating room space to independent groups, they may not need to partner at all. Leo Spector, MD, CEO of Charlotte, N.C.-based OrthoCarolina, recently connected with Becker's to talk about joint venture partnerships with hospitals and what makes a good one. The organization currently has two orthopedic-focused ASCs in the state. Note: Responses were lightly edited for clarity and length. Question: How could the removal of CON laws change joint venture partnerships? Dr. Leo Spector: As we move forward, it doesn't necessarily mean that we want to own all of our centers 100% without the hospitals. There might be some good reasons for us to continue to joint venture with them. If we do, it's now a different relationship, it's a different proposition. We're choosing a joint venture with them because we want their partnership. They're choosing a partner with us because they want that partnership. Now, we're deciding that it's in our best interest, it's in the patient's best interest, in the community's best interest for us to do this together, as opposed to being forced to do this. Things work much better when people mutually agree, because it's in their both interest in the interest of patients to do it together. I think resetting the relationship to one that is really aligned for what our patients need is going to make a big difference. Q: What would be an example of a joint venture that you would go into that would make sense? What are the things that go into those partnerships with a hospital? LS: When you do a joint venture, both parties need to bring something of value to make it work. It's got to be a true partnership and there has to be a degree of mutual respect and trust. In the past, those relationships were typically based on the hospital bringing the OR asset. With that aspect of things gone, it really puts the onus on the hospital to bring something else to the table. Can you help us with the management of the facility? Are there ways that we can work together to lower the total cost of care for the payers? It changes the nature of that conversation about what value you are bringing. It's the same thing with ASC management companies. Currently, we own and manage our own two facilities. And so it changes the conversation with the ASC management companies to say, do we joint venture with them? Is it an equity position or not? And if so, again, what's the value that they're bringing to it? Competition is good and it brings out the best in everybody. I think this creates a little more of a level playing field, which forces those entities to compete more for that to be a part of that joint venture, which is only going to make them better partners in the end. n