Cost-effectively converting admitted patients into outpatient consumers is the new frontier in U.S. healthcare. A variety of factors are creating this unique opportunity in healthcare delivery. First, clinical advances have made same-day surgery possible in many more situations than in the past. In 1981, 80 percent of surgeries performed in community hospitals were done on an inpatient basis. Three decades later, 75 percent of community hospital-based surgeries in the United Sates were outpatient procedures. And that number is only expected to grow in the next decade: Outpatient and ambulatory surgery center offerings between 2014 and 2019 are expected to expand 14 percent and 16 percent, respectively, while inpatient surgery is only expected to grow 1 percent by 2019. Second, patients are demanding more convenient healthcare options that fit into their daily lives. Finally, an uptick in shopping mall vacancy rates provides a real opportunity for healthcare providers to capitalize on the glut of distressed retail properties in the United States. Consider this: 19 percent of malls in the United States are experiencing financial trouble and 15 percent are expected to close during the next decade. Regent Surgical Health is leading the way in understanding these trends to develop the ambulatory services of tomorrow. In a focus group during the recent Becker’s Hospital Review 6th Annual Meeting, our leadership team debuted Regent’s new joint venture model for meeting the nation’s growing outpatient demand: ambulatory care centers. Highlights of Regent’s presentation included:
Improved market conditions
The healthcare industry has attempted to launch similar outpatient solutions in the past, but experienced limited success. With its emphasis on value-based services and population health, however, the Affordable Care Act has increased demand for consumer-centric medical care such as retail clinics, same-day scheduling and after-hours care – services that are difficult to provide cost-effectively in traditional settings. As a result, “Big Box” outpatient facilities have sprung up across the country, offering walk-in medical appointments and on-site radiology, laboratory and pharmacy services. These facilities are designed to capture volume from the millions of newly insured individuals, but can struggle from high start-up costs, operational challenges and not enough risk sharing among stakeholders.
Regent’s approach
While conditions for “Big Box” outpatient facilities have improved in recent years, Regent is further refining this dominant ACC model through joint ventures and by identifying extensive clinical and nonclinical outsourcing opportunities that can dramatically lower costs and financials risks for hospitals. In these arrangements, Regent serves as the “general contractor” for the healthcare system and facilitates the joint venture with each business in the ACC. Key Regent services include:
- Management of RFP and partner selection process
- Creation of JV entities and operating agreements
- Real estate selection/lease negotiation
- Board oversight
- Real estate management
- Financial analysis
Numerous benefits for hospitals
Regent’s approach provides many advantages for hospital executives in the following critical areas:
- Time: Planning, developing and operating an ACC is a time-intensive effort that requires dedicated, proven expertise. With more than a decade of experience launching and operating ambulatory surgery centers across the United States, Regent is a nimble operator without bureaucratic constraints, and can provide the “boots on the ground” needed to launch a facility quickly and with limited delays.
- Market share: Hospitals are facing continual pressure from competitors for patients. “Big Box” ACCs offer a mechanism to recapture and gain market presence for hospitals in a particular market.
- Expertise: In such a new market, it can be difficult to find the right talent to launch an ACC, particularly in remote areas. Regent has diverse experience with health systems and physician JVs and extensive experience outsourcing service lines to category experts.
- Capital: Many hospitals and health systems are facing budget cuts and have limited resources for ACCs and other expansion products. Regent’s risk-sharing model limits upfront costs, as well as providing possible off-balance sheet arrangements.
For more information about Regent’s new ACC model, hospital-physician joint ventures or outsourcing and supply-chain solutions, please contact Jeff Simmons at jsimmons@regentsh.com.