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51 OUTPATIENT SURGERY 5 Shifting Trends Affecting ASC, Physician Practice Valuation By Anuja Vaidya A mbulatory surgery centers and physician practices are facing a number of unique challenges in today's healthcare landscape, noted VMG Health Managing Director Aaron Murski, at Becker's 15th Annual Spine, Orthopedic & Pain Manage- ment-Driven ASC Conference + e Future of Spine, June 22 to June 24 in Chicago. ASCs are facing issues related to growth, such as enhancing capabil- ities, risk mitigation and staying in front of trends. "Growth is not a one-dimensional concept," said Mr. Murski. Physician practices, on the other hand, are more focused on getting a seat at the table and gaining leverage. "For most practices that are small and independent, they just want a seat at the table," said Mr. Murski, "A defined place in the market. ey are not necessarily focused on growing, but they want to stay in front of the competition." For both ASCs and practices, addressing these challenges is key to maximizing value. Taking note of market trends is an important as- pect of overcoming the aforementioned issues. Here are five market trends impacting value for ASCs and practices: 1. e shiing payer environment. Trends in the payer market affect ASCs and practices in multiple ways. Here are five top trends in the payer arena, according to Mr. Murski: • Payers are pulling out of exchanges limiting access to healthcare for many • Major payers are trying to consolidate in multi-million dollar deals • Health plan preferences are changing, with more people opting for high-deductible health plans • New alternate payment models and bundled payment programs coming to fore with the shi to value-based care • Payment differentials are staying more or less the same — ASCs still get only a percentage of HOPD reimbursement 2. e increasing use of technology. Technology is changing the face of healthcare. It affords a number of opportunities to improve opera- tions and efficiency as well as enhances care delivery. 3. e move toward low-cost settings. It is now possible to perform higher acuity procedures in the outpatient setting, with payment fol- lowing suit. "ere are new CPT codes for spine procedures every year, and com- mercial payers are embracing this," said Mr. Murski. "Patients also prefer the low-cost settings." 4. e changing market participants. In addition to management and development companies and health systems, private-equity backed companies and technology-driven companies are driving changes in the ASC and physician practice markets, said Mr. Murski. ere is a shi occurring, with these new types of companies having an increased impact on the value of ASCs and physician practices. For example, technology-driven companies now have a hand in prac- tice management, with the development of new platforms to optimize operations. ese businesses aim to help physicians stay independent through technology. A number of them are also joining forces with established management and development companies, such as Optum merging with Surgical Care Affiliates. 5. e trends in multiples and EBITDA. Generally speaking, for ASC valuation today, a multiple of six to eight times EBITDA, said Mr. Murski, but, specific ASCs may have a higher or lower multiple. "Additionally, competition and cost containment may impact EBIT- DA negatively, but taking advantage of technology and new types of cases may impact EBITDA positively," he said. n A monobloc total disc prosthesis that restores natural disc functions P R E S E R V I N G S P I N A L M O T I O N FR, FH ORTHOPEDICS 3 rue de la Forêt 68990 HEIMSBRUNN - FRANCE Tél. +33 (0)3 89 81 90 92 Fax : +33 (0)3 89 81 80 11 orthopedie@fhorthopedics.fr www.groupefhortho.fr USA, FH ORTHO INC. 4908 N. Elston Chicago - IL 60630 - USA Tel.: +1 (773) 290 1039 / 844-77 FHINC Fax: +1 (773) 539 9328 info-us@fhorthopedics.com www.FHortho.com UK, FH ORTHO LTD Suite C, Ground Floor, Conwy House Castle Court, Swansea, SA7 9LA - UK Tel.: +44 (0) 1792 464792 Fax: +44 (0) 844 412 7674 customer-servicesUK@fhorthopedics.com wwwgroupfhortho.com POLSKA, IMPLANTS INDUSTRIE Ul. Garbary 95/A6, 61-757 Poznan - POLSKA Tel: +48 61 863 81 27 Fax: +48 61 863 81 28 fh.orthopedics@poczta.internetdsl.pl wwwgroupfhortho.com EUROSPINE BOOTH # 64 NASS BOOTH # 454