ASC development is facing headwinds such as high build costs and the ongoing issues with anesthesia, but there are also growth chances for the industry including the site-of-service shift.
Mark Langston, the new chief development officer of Compass Surgical Partners, recently connected with Becker’s to share his take on both the opportunities and drawbacks for the ASC industry.
Compass Surgical Partners is an independent ASC development and management company with a portfolio of ASC joint ventures with health systems and physicians.
Note: Responses were lightly edited for clarity and length.
Question: What opportunities are ASCs, physician groups and health systems facing today?
Mark Langston: From an opportunities perspective, there’s plenty of data out there around volume. Growth is coming toward the outpatient and ASC world in terms of outpatient growth inside of hospitals. In addition, health plans are really starting to clamp down on what’s able to be done in an inpatient setting, what’s able to be done in an HOPD setting and getting strict around the site-of-service. They’re going to start, and they already are denying cases based on site-of-service in many instances. The health systems are scrambling, trying to get the right venues in place so that they’re not taking financial hits for those cases.
If you think about what that looks like from a health system perspective they are saying ‘OK, we’re going to create this hole in these facilities by moving the volume out, because the payers really are forcing our hand to do so.’ That should be an opportunity to look at how in the site-of-service that we’re maintaining inside the hospital, how are we maximizing the higher acuity cases that are actually taking place there? You’re better off creating that site-of-service shift and working with someone like Compass to go buy and build the sites, because it’s a lot cheaper to acquire or build an ASC than it is to add bricks and mortar around your inpatient and acute facilities. It’s really a cost savings measure on one hand, being able to maintain a book of business from the lower acuity side, so that you’re financially in a better position downstream. It’s some short term pain for long term repositioning inside of your geographic coverage area.
Q: What challenges are organizations coming up against and how can they combat them?
ML: There is the cost to build, and you’re going to face that in every setting. But again, building an ASC is way cheaper. Most health systems are not known for building inexpensive facilities, so we believe that we could build the same facility that many health systems would for a fraction of the cost. We bring capital efficiency to de novo built projects because we’ve done so many of them.
The other is that anesthesia today is more and more of a challenge in the operating and surgical world, and so understanding how to work with anesthesia inside of an ASC setting, or within your continuum of care, is crucial. We bring some flexibility and know how to manage the anesthesia component, and at the end of the day, it’s a harmonic balance between what’s available from an anesthesia provision perspective, and what we need for coverage for the right amount of cases to come through the facility.
Last is the alignment with health plans. Health systems have historically had a wide array of relationships with health plans. When it’s adversarial, it’s usually related to your cost for provision of services being too high, and this is an actual opportunity to help the health system come up with a plan. It helps change the dynamic and the strategic approach with health plans. So I think that’s a huge opportunity, but it’s a challenge today. Taking the challenge and turning it into an opportunity is what we’re all about.
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