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62 HEALTHCARE NEWS 16 Financial and Operational Trends for ASCs By Laura Dyrda H ere are 16 trends for the ASC industry, including financial, operational and market acquisition statistics. Market trends 1. Technavio reports the global ASC market is expected to grow at a 4.36 percent compound annual growth rate through 2020. ere will be a continued rise in the minimally invasive surgery market, driving ASC growth. 2. Cardiac surgeries are increasingly becoming minimally invasive and procedures, with aortic valve surgeries and endoscopic robotic cardiac procedures potentially moving to the ASC. Or- thopedic surgeries such as total joint replace- ments and spinal fusions are increasingly per- formed in the outpatient setting as well. 3. Vertess predicts the trend toward consum- er-driven healthcare shopping illustrated by the demand for one-stop shops and on-demand healthcare services pose an opportunity for ASCs and urgent care clinics to attract patients. e company expects ASCs to combine with ambula- tory groups, imaging centers and other specialists to provide a superior patient experience. 4. As healthcare moves toward pay-for-perfor- mance, bundled payments and shared savings models may present an opportunity for ASCs to thrive in a competitive healthcare environment. Transactions 5. Half of the ASC company respondents to HealthCare Appraisers' 2017 ASC Valuation Survey use a formula to determine minority interest transactions with new or existing phy- sician investors; another 32 percent obtain an independent fair market value appraisal. 6. Minority interest sale takes three to six months on average for 55 percent of the re- spondents when dealing with a new physician. However, when selling controlling interest to an ASC, 56 percent say it takes six months to one year to complete the process. 7. Half of the respondents report selling con- trolling ASC interest to a hospital or health system. 8. Almost half — 48 percent — report earnings growth per year is expected to grow 3.1 per- cent to 6 percent for the first several years aer the transaction; just 19 percent expect growth exceeding 12 percent over that time period. Operational 9. Salaries, wages and benefits on the high end are 30.4 percent of ASC net revenue; on the low end, they are 17.8 percent of ASC net revenue, accord- ing to Avanza Healthcare Strategies "Ambulatory Surgery Center Special Report: 2017 Bench- marks." Total operating expenses on the high end of ASC net revenue are 32.7 percent; on the low end, they are 15 percent of net revenue. 10. e typical ASC has eight operating room surgical cases per day on the high end; on the low end, ASCs have 3.2 cases per operating room per day. e average operating room time per surgical case is 60 minutes on the high end and 40 minutes on the low end. 11. At the high end, the typical ASC has 12.6 non-surgical cases per OR per day; at the low end, the average ASC has 3.4 non-surgical cases per operating room per day. Procedure room time per case is 40 minutes on the high end and 30 minutes on the low end. 12. ASC room utilization is typically 1,200 cases per room annually for ENT, general surgery and gynecology procedures on the high end; on the low end, the utilization is 1,000 cases per day. For orthopedic procedures, utilization is 850 cases per room annually on the high end and 750 cases per room annually on the low end. Financial 13. Based on VMG Health's 2016 Intellimarker Multi-Specialty ASC Study, the average payer mix as a percentage of gross charges for ASCs is as follows: • Commercial: 59 percent • Medicare: 29 percent • Worker's compensation: 9 percent • Medicaid: 7 percent • Self-pay: 4 percent • Other pay: 5 percent e average payer mix as a percentage of case volume at ASCs is as follows: • Commercial: 51 percent • Medicare: 33 percent • Medicaid: 10 percent • Other pay: 9 percent • Self-pay: 5 percent • Worker's compensation: 4 percent 14. Net revenue per cases is highest for ortho- pedics cases, hitting $3,222 on average. Net revenue for otolaryngology cases is $2,492 on average; gastroenterology is $963; ophthal- mology is $1,395; and pain management aver- age net revenue per case is $1,015. 15. e average EBITDA margin for ASCs is: • Less than $3 million: 14 percent • $3 million to $4.9 million: 21.6 percent • $5 million to $6.9 million: 27 percent • $7 million to $8.9 million: 26.4 percent • Greater than $9 million: 35.1 percent 16. e total hourly staff wages is $30.21 on av- erage with the nurse staff making $35.58, tech staff making $23.32 and administrative staff making $26.24 on average. e average nurse salary is $74,009 per year, ranging from $63,770 on the low end and $95,119 on the high end. e average ASC reported 14.5 staff hours per case, including seven nurse hours per case and 4.5 administrative hours per case. n HCA to Change its Name — Again By Ayla Ellison N ashville, Tenn.-based HCA Holdings board of directors voted last week to rework the company's name, CEO Milton Johnson said on an earnings call Tuesday. The company's new name will be HCA Healthcare, effective May 8. Regarding the change, Mr. Johnson said, "Our new name is more reflective of our mission and the broad spectrum of care we provide to our communities and the dedication of our caregivers to our patients in our vast network of inpatient and outpatient facilities across our 42 U.S. markets and the U.K." The company will continue to trade under the ticker symbol HCA after the change takes effect. HCA has reworked its name several times over the years. Prior to HCA Holdings, the company's names included HCA Inc., Hospital Corporation of America and Columbia/HCA Healthcare. n