Becker’s Hospital Review recently asked Regent’s CEO Chris Bishop three questions on the minds of many hospital leaders as they grapple with a rapidly changing healthcare landscape. Value-based care was a common thread through all three and is creating a domino effect of impact on health systems and payers, providers, and patients.
Question #1: Industry Disruptors
The first question probed for the industry disruptors that have Bishop’s attention now, and why. His response focused on the aggressive stance taken by many influential health systems to transition 75% of their revenue to value-based care by 2020. He cited the 28-member Health Care Transformation Task Force, a private-sector alliance that includes Trinity Health Care, Cleveland Clinic, Dignity Health, and others, aimed at accelerating the healthcare industry’s transformation to value-based care.
Another disruptor Bishop highlighted is today’s trend toward converting hospital outpatient departments (HOPDs) to ASC joint ventures with physicians — a direct reversal from a few years ago when hospitals were buying ASCs outright for conversion to HOPDs. Bishop explained that as health systems derive greater revenue from value-based care, the potential for higher reimbursement in an HOPD is outweighed by the advantages of leveraging a broader ambulatory platform.
Question #2: Physicians’ Concerns
When asked about Regent Surgical Health’s response to concerns or needs expressed by physicians, Bishop talked about physician practice mergers, private equity funded MD specialist roll-ups, and Regent’s work facilitating physician-hospital joint ventures with larger, independent physicians’ groups, as well as more hospital employment of surgical specialists.
“From the perspective of value-based care, surgeon alignment is a critical strategic necessity and requires a push toward developing relationships with larger practice groups. It is very difficult for physician groups with only 2-3 MD’s to excel in this new environment,” he explained. “When hospitals form a strategic alliance with select surgeons, it minimizes the providers’ financial investment and helps achieve physician alignment goals.”
Bishop said a strong ambulatory model provides competitive protections for doctors and allows them to maintain daily clinical and operations control over the facility, while hospitals have influence over budgets, strategic decisions, and disposition of assets. The model offers both a cost-effective solution.
Question #3: Consumer-Centric Capabilities
Finally, Bishop talked about a new consumer-centric capability Regent has built or tapped into within the past 18 months: the organization’s growing ability to offer total joint replacement (TJR) as an outpatient procedure. Regent’s ASCs expanded from 8 to 14 facilities offering this procedure in 2017, following 300% growth in total joint volume in 2016.
“Moving total joint replacement surgeries to the ASC makes sense for many reasons, both clinical and financial, but the most important decision factor is patient health/choice,” he explained. “Patients are increasingly bearing a higher percentage of the cost associated with these procedures and recognize the economic value of the ASC. Additionally, patients are researching the advantages of high-quality sites for outpatient service and requesting ASCs for their service.”
Bishop also cited bundled payments as a consumer-centric pricing strategy, pointing out that transparent pricing is an absolute must for providers looking to stay competitive against nontraditional healthcare offerings of successful retailers like Walmart / CVS / Amazon.
“These are fascinating times in healthcare,” he said in summary, “and the successful disruptors that bring great value will win, not the traditional care models.”
For more of Regent’s perspective on the healthcare trend toward HOPD to ASC Conversion, download our white paper here.