As healthcare moves toward value-based care and risk-sharing payment models, hospitals are more interested than ever in joint venture ambulatory surgery centers. Physician-owned and operated ASCs are often more efficient than hospital outpatient departments and provide a higher quality of care at lower costs. Traditionally, hospital executives and ASC physician owners have had an adversarial relationship. But those fences are quickly mending: Hospital executives are more willing to allow employed physicians to own interest in a joint venture ASC. Also, markets that were once tough for ASCs to break through are suddenly hotbeds for joint venture ASC activity. This reason is simple: healthcare is changing – and so are the business strategies. In our new ebook, Regent lays out the road ahead for our industry. We also set forth what we expect will be a natural evolution for our industry in the coming years, and outline key developments to follow between now and 2020, including:
Cost containment counsel
The counsel charged with making recommendations on Medicare payments — with the goal of eliminating waste and overspending — will convene for the first time next year. For the first two years, the counsel can only make changes to physician and ancillary reimbursement as well as drug costs; after 2018, the counsel can also focus on hospitals.
Physician practice acquisition
Hospitals will continue to acquire physician practices during the next five years. For the past several years, hospitals have been acquiring physician practices at a high rate as healthcare reform went into effect. Physicians who initially were not interested in relationships with hospitals are now partnering, as they’re afraid they’ll be left out otherwise.
Affordable Care Act changes
The Supreme Court and/or a new president could make significant changes to the current healthcare law. A Republican — or even a new Democrat — as president could also change healthcare reform’s current trajectory.
Physician independence
Physicians in specialties that can be independent likely will remain so. Five years ago, many cardiologists were independent, but the independent practice became unsustainable, because professional fee reimbursements were cut so significantly. Unless the cost-containment panel does something similar to orthopedic surgeons or ENT physicians, the groups that want to be employed have already done their deals, and the rest want to remain independent as long as they can.
Accountable care organizations
ASCs could be part of accountable care organizations in the future. ACOs are still in their infancy in most markets, but the focus on improving quality and lowering costs could make them, or similar initiatives, more pervasive. ASCs could align with hospitals or large medical practice groups that have risk contracts under the new health plans. In our new ebook, we also make the case for why ASC joint ventures with hospitals and health systems will continue to be a huge opportunity during the next five years. We offer our roadmap for success and outline the qualities hospital systems should look for in their physician partners, including:
- Willingness to make a financial investment in the center;
- Maximum facility usage for appropriate cases; and
- Willingness to save money on physician preference items.
Based on our more than a decade of ASC joint venture experience, we also know that physicians can become more valuable partners when they work closely with hospital executives to grow the ASC. To become even deeper partners, physicians can:
- Bring more inpatient work to their partnership hospital;
- Give up unused blocks of time for potential new partners;
- Take call hours as the hospital; and
- Serve on additional leadership committees for inpatient departments.
Overall, bringing all partners together in pursuit of one goal — the ASC’s success — is a characteristic that all ASC joint ventures share. For more information on ASC joint ventures, contact Jeffrey Simmons at jsimmons@regentsh.com.
