Issue link: https://beckershealthcare.uberflip.com/i/307962
11 12th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference + The Business of Spine - call (800) 417-2035 uity event. "They might want to take equity off the table and one of the publicly traded compa- nies will pay a six, seven or eight times multiple," says Mr. Péo. "Then they can also take advantages of the company's services." Hospital partnerships An increasing number of ASCs are partnering or aligning with hospitals for various reasons, in- cluding the potential managed care contract rate increase or preparation for accountable care or- ganizations. However, Mr. Péo believes there will always be a place for independent ASCs and de novo activity. "I think there are way too many surgery centers for every one of them to have a hospital partner," he says. "And not everyone wants a hospital part- ner. A lot of physicians formed the ASC because they didn't want a close relationship with the hos- pital. However, it may make sense to partner with the hospital, if you are willing to give up control, in exchange for better reimbursement rates." Mr. Péo has seen hospital partnerships work well when the hospital executives realize their strengths and weaknesses. The day-to-day ASC operations are often one of their weaknesses, but a strength for the physician owners. "Hospital partnerships are definitely on the rise, and I've seen some fantastic partnerships," says Mr. Péo. "I've also seen some terrible ones. You have to be very careful in choosing your partner." Physician employment Some specialists previously under hospital con- tracts may become independent, either because the hospital overspent and didn't renew the contract or the physician isn't satisfied with the hospital's second contract offer. These surgeons are great sources for potential partnerships in the future. "There are some surgeons rolling off their em- ployment contracts looking for investment op- portunities," says Mr. Péo. "We've seen a number of surgeons reaching out to us, saying they're roll- ing off their contracts in a few months, and would like to join our center." ASC leaders should proactively reach out to phy- sicians at the end of their employment contracts. However, as specialists may trend back toward private practice, primary care physician employ- ment remains an issue. "The primary care physician employment is a big question mark to me," says Mr. Peo. "Primary care physicians are struggling on their own and groups are scooped up by the hospital." Narrow networks Narrow network — including plans on the health insurance exchanges — are designed to drive down costs as much as possible. Going in-net- work provides increased volume from the payer at a reduced payment rate. That can be advanta- geous for ASCs as a low cost provider, but there are also downsides to participating. "You have to know what you're getting into with the narrow networks," says Mr. Péo. "So far they aren't reaching out to us. If you are interested, reach out to them and position yourself as the low cost provider. There is case volume there, especially if your physicians are in the narrow networks. But most people are still trying to wrap their heads around everything going on." Patients may push back on narrow networks in the future in favor of personal preference. There are people willing to pay extra to choose their providers and there could be a similar migration away from those networks as with the HMOs. "It will be interesting to see how patients react to this if they don't like their options and are willing to pay extra for their choice," says Mr. Péo. n