In a recent conversation with Becker’s ASC Review, Regent Surgical Health Chief Development Officer Jeff Simmons highlighted the evolving relationship between ambulatory surgery centers (ASCs) and hospitals.
The relationship continues to grow and change, but one aspect is constant: the highest-quality outcomes in the most appropriate and cost-effective setting remains paramount, and ASCs possess those qualities.
But with reimbursements shrinking, ASCs are looking to partner with hospitals to guarantee they are reimbursed to the fullest extent. And hospitals, in turn, are looking at ASCs to perform surgeries as insurers continue to apply pressure to keep surgical costs at bay.
Because of the Affordable Care Act, hospitals now own most of the dollar risk. So, it behooves hospitals to control as many facilities as possible in order to take on more insurance dollars, said Simmons, and revenue and profit are critical. A knee or hip replacement surgery in a hospital setting would take two to five days and cost the hospital $50,000; but the procedure can be completed in 23 hours for around $15,000 to $20,000 at an ASC. Because of the disparity in price, more and more insurance companies are requiring hospitals to perform the procedures in an outpatient setting. A hospital may even partner with a newly-signed physician on an ASC in a joint venture; this practice is now being used by hospitals as a recruitment tool.
At this point in time, Simmons said that unless a center is performing pain or endoscopy, the market dictates that the ASC has to align with a hospital.
Simmons told Becker’s there is no end to this acquisition cycle, at last not for a number of years, because the demand and supply for independent ASCs is high.
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