While only a few years ago hospitals were buying ambulatory surgery centers (ASCs) outright and converting them to hospital outpatient departments (HOPDs), the trend today is just the opposite: hospital systems are increasingly converting HOPDs to ASCs in joint ventures with physicians in their markets. Why? Today’s progressive hospital systems are rethinking how and where care is delivered – and innovating to improve both the quality of care and the bottom line.

A new white paper from Regent Surgical Health explores this trend in the context of the healthcare industry’s move toward value-based care.

“As health systems move toward deriving greater percentages of revenue from value-based care, the potential for higher reimbursement in an HOPD is outweighed by the advantages of leveraging a broader ambulatory platform,” explains Regent CEO Chris Bishop. “Mathematically, moving in the opposite direction doesn’t make sense anymore.”

According to the white paper, HOPD conversion shifts care to a lower cost setting, supporting key strategies that drive hospital system success:

• OPERATIONAL EFFICIENCY — Financially successful ASCs operate more efficiently than HOPDs due to a more narrowly defined scope of work. “Hospitals are striving to reduce operational costs, and in doing so, we recognize that ASCs allow for efficiencies we could never achieve,” says Mark Murphy, Chief Strategy Officer at St. Joseph’s Health, a member of Trinity Health. “From faster turnover times to flexible staffing, there are a number of key benefits including physician alignment and satisfaction.”

• PHYSICIAN ALIGNMENT — For hospitals, joint venture partnerships with ASCs provide a long-term physician alignment solution and many systems are now considering allowing employed physicians to invest as partners.

In addition, HOPD to ASC conversions can drive advantage in terms of payer-cost-sharing and marketplace reputation and relevance, Bishop says.
Going beyond why to how, the white paper outlines three key steps to conversion success:

1. Assess what they’re trying to accomplish short term and long term and how that fits their overall value-based care strategy

2. Develop a target list of physicians to syndicate ownership that will achieve volume and quality care goals

3. Identify disruptive tactics to enhance care such as robotics and higher acuity joint replacement or spine care

“The two hardest parts of HOPD to ASC conversions for hospitals are, number one, coming to the realization that they need to give up some traditional advantages in the short-term for the longer-term viability of the ASC model,” says Thomas Crossen, Regent’s Chief Development Officer. “And the next hardest part is getting all parties aligned in a deal.”

Leveraging experience as managing partner in more than 23 hospital/physician current ASC joint ventures, Regent is adept at facilitating conversations with hospital executives on why they would want to consider HOPD to ASC conversion, facilitating physician discussions, and managing the execution.

To learn more about the trend toward HOPD to ASC conversion and how to make it work in your health system, click here to download the free white paper.