As health systems accelerate their shift to a value-based payment model, developing a strong ambulatory platform is becoming an increasingly important strategy. And while some hope to ride the fee-for-services wave as long as possible, based on Regent’s conversations with executives at both hospital systems and ambulatory surgery centers (ASCs), Chief Executive Officer Chris Bishop believes the time has come to act.
“By 2026, the US market will double the number of joint replacements,” Bishop says. “If you haven’t developed an ambulatory strategy around joint replacements — and I would include spine in that as well, — you’ll find that your competitor or a larger orthopedic practice has actually captured this business and you are left out.”
Bishop cites the growing number of progressive hospital systems shifting to value-based care reimbursement methodologies and adopting innovative ideas for ambulatory expansion to stay competitive.
“One of our partners, Trinity Health, is way ahead of the curve on this,” Bishop says. “They publicly made a statement that 75 percent of their revenues by 2020 would be generated via some form of value-based care. The more progressive health systems out there recognize that while it will be painful as we go through the transitionary period, come 2020, a lot of the market will have managed care. If you are going to generate 75 percent of your revenues via some type of value-based reimbursement methodology, you must employ lower cost settings to deliver that service.”
One trend Bishop sees as hospital systems seek more ambulatory solutions is growing interest in converting hospital outpatient departments (HOPDs) to ACSs.
“When I look at our development pipeline for 2018, three of our projects are HOPD conversions, where in the past we might have had one in five years. What we’ve found is the hospitals looking at HOPD conversions often are those that have gone from 5 percent of their revenues being generated from value-based care to 30 percent or 50 percent. It is a general transition for them on their asset base. However, they are trying to manage somewhat in parallel with the growth on their value-based reimbursement.”
Beyond traditional ASCs, Bishops states innovative health systems are very receptive to additional ideas for adding ambulatory capabilities, from birthing centers to cardiac surgery centers and more.
“We view ourselves as an ambulatory surgical solutions provider,” Bishop says. “Our partners are understanding that as they navigate this transition in how they get paid, the more care they can shift to an outpatient setting, versus the inpatient setting, the greater the value equation.”
For information on how Regent can help with the transition to ambulatory care, download our free whitepaper: HOPD To ASC Conversion Now or Later?