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12 ASC Turnarounds: Ideas to Improve Performance C onsolidation in healthcare and hospital employment of primary care physicians is causing detrimental referral pattern changes. In the past, specialists could gain a primary care physician's trust by providing positive outcomes, all but ensuring a healthy stream of referrals. This is no longer the case. "While this process and relationship pattern development still remains somewhat true today, we have seen several changes in the past few years," says President of Outpatient Healthcare Strategies Jessica Nantz. "The majority of these changes are the result of primary care physicians becoming employed by hospitals and health systems or forming 'super groups.' In these positions, primary care physicians are increasingly taking the lead in healthcare delivery by negotiating risk-sharing scenarios with payers and employers." Hospital-employed physicians are more likely to refer patients to sur- geons and outpatient facilities within the same hospital or health system. To complicate matters, hospitals are employing physicians at a higher rate than before. American Hospital Association data shows the number of hospital-employed physicians grew 34 percent from 2000 to 2010. There isn't much surgeons outside of the network can do to maintain re- ferrals from employed primary care physicians, beyond joining the network themselves. "As hospital and health systems purchase practices, especially primary care, many specialists also consider physician employment so they do not have to worry about identifying new referral sources," says Ms. Nantz. "Finding new referral sources has become an increasingly difficult process for independent specialists these past few years." However, independence is still important to many physicians, especially ASC owners. As a result, physician specialists are joining together in super groups as well and forming independent physician associations. The large groups can command respect as the dominant player in the market and leverage their size in payer negotiations for increased reimbursement and take on at- risk payment models. "Another trend that is emerging, and used by some independent physicians, is for physicians to subspecialize in their area of practice," says Ms. Nantz. "Although this is a long-term strategy, when a physician becomes one of two or three physicians in a market to specialize in a procedure, albeit one that could sometimes be accomplished by a generalist, the subspecialist will typi- cally receive the referral as the expert in the procedure." If the PCPs are in a super group, there are partnership opportunities that could be beneficial for the center. "Primary care physicians in super groups are looking to refer patients to out- patient surgical facilities that can deliver positive surgical outcomes and help the super group maximize the profits — through reduced costs — associated with risk-sharing payment models," says Ms. Nantz. Payers are also injecting influence over referral patterns, more than in the past. "Cost and risk-sharing with payers and primary care groups is another developing trend. Insurance companies are increasingly adopting models that force patients and provid- ers to share more cost and risk than before." Patients are also taking more control over the healthcare decision-making process. This is partially because patients bear a heavier financial burden than in the past. There is also a movement toward assisting patients in educated decision-making. "Patients are bearing greater responsibility for their healthcare costs in the form of higher premiums, deductibles and copays," says Ms. Nantz. "This has encouraged patients to become more involved in the referral process as they are asking more questions about their provider options in areas including cost and outcomes." So how can ASCs ensure a strong referral pattern and patient flow in the future? The answer is complicated. Depending on the ASC's market, partnerships with hospitals, payers or other independent physicians could be the most valuable tactic to ensure the ASC's survival. A few of the most important factors to consider include: • Whether the market is attractive to new physicians who want to be recruited for ASC ownership • Whether a hospital or health system is actively acquiring physician groups • Whether a single payer dominates the market to influence patient flow "ASCs must examine the value of developing formal and informal arrange- ments with hospitals, health systems, payers and large primary care physician groups," says Ms. Nantz. "Most ASCs will find the combination and diver- sification of some or even all of these efforts will serve them best over the long term." These market forces will also impact where ASCs can expect the most re- ferrals from in the future. Hospital-owned ASCs will continue to see the most referrals from primary care physicians employed at the hospital, or PCP practices the hospital owns. The traditional referral sources will remain largely from independent primary care groups and other non-surgical spe- cialists, says Ms. Nantz. "ASCs are still typically highly reliant upon the relationships and contracts they have with third-party payers, and often remain at the will of third-party payers due to the strength of their insurance products that allow limitation of reimbursement," she says. "Referrals may also come from patients as they become more actively involved in participating in their healthcare decisions, become savvier about the cost of their healthcare and learn about their op- tions for care." ASCs are also beginning to provide transparent pricing and quality outcomes data to attract self-funded employers and individual patients. These same qualities appeal to physician groups referring cases to specialists at the ASC. Finally, the more traditional methods of growing patient volume — re- cruiting new physicians and adding specialties — still present signifi- cant opportunities for the future. "This may include cases not previously seen in ASCs five to 10 years ago, such as spine, retina and total joint cases," says Ms. Nantz. But the traditional methods may not last forever, Referral Patterns Changing? Where to Find Patients in the 21st Century By Laura Dyrda 13th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference + The Future of Spine June 11-13, 2015 Westin Michigan Avenue Hotel • Chicago, IL 90+ Surgeons Speaking & 108 Sessions Key Note Speakers: Deion Sanders, Billy Beane and Bill Walton For more information, visit www.beckersspine.com or call (800) 417-2035.