Issue link: https://beckershealthcare.uberflip.com/i/267523
23 Executive Briefing: Hospital-ASC Joint Ventures Expanded physician relationships. Partnering with a local ASC can help hospitals develop stronger or new physician relation- ships. Strategically, it makes sense to be in a joint venture with the physicians allied with your competition. "If the physicians have a great experience working with the hospital through the joint venture, it may open doors for greater referrals in areas such as physical therapy, imaging, laboratory services or pathology," says Mr. Lambert. Forming a joint venture can also be an attractive investment strat- egy for many hospitals. Challenges Though joint ventures with ASCs can bring many benefits to the hospitals involved, the relationship is not always simple to form. The following are a few challenges associated with the model. Persuading the physicians. "Physicians are, I think, rightly cau- tious about entering into hospital joint ventures," Mr. Lambert says. After all, most of them started their surgery centers to get away from the hospital inefficiencies, politics and quality issues, according to Mr. Lambert. Therefore, any hospital interested in forming an ASC joint venture has to demonstrate the benefits it can bring. The two most com- mon benefits a hospital can contribute are: Help with improving payer contracts. With help from the hospital partner, the ASC may be able to negotiate higher reimbursements with payers than they currently receive. Increase in case volume. This is especially true if the potential hospital partner controls a significant base of referral in the com- munity and discourages referrals to the ASC physician owners or directs the cases to the hospital. "If the hospital can stop that pressure or steering, it can lead to a significant increase in case volume for the center," Mr. Lambert says. Thinking long-term. Many hospital CEOs see the long-term need to have access to the type of cost efficiencies seen in ASCs. In the short run, however, without a financial benefit they'll want to keep all the surgical cases they can inside the hospital, according to Mr. Lambert. Cannibalizing the hospital OR volumes isn't a win- ning strategy. Using an ASC joint venture as a competitive tool to grow market share at the expense of rivals while also enhancing system outpatient capabilities is. n Today's reality demands that hospitals and health systems deliver lower cost care while maintaining focus on patient outcomes and growing market share. ASCOA helps physicians and hospitals partner together to develop surgery centers and, with 25 years of surgery center management experience in over 65 ASCs, provides invaluable benefits for physicians and hospitals alike. "Forces have led to hospitals taking a closer look at outpatient strategy, including ambula- tory surgery center relationships, to increase their outpatient offerings." Average number of inpatient hospital admissions per 1,000 people 1991: 123.1 2011: 111.8 Average number of outpatient hospital admissions per 1,000 people 1991: 1,273.4 2011: 2,105.6