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FEATURE


Pressure to Change Todd Mello, partner with HealthCare Appraisers, a national valuation firm headquartered in Delray Beach, Flor- ida, recalls a time when ASCs were fighting for their survival, often against hospitals, and when hospitals had no interest in working with ASCs. Now, he says, many hospitals are


Changing Hospital Model and Its Impact on ASCs


The numbers of community hospitals and ASCs are going in different directions BY ROBERT KURTZ


I


t is a good time to own an ASC, says Mark Weiss, an attorney with The


Mark F. Weiss Law Firm, which has offices in California and Texas. “The health care landscape is changing


quickly, and ASCs look to be positioned for success,” says Weiss, the author of The Impending Death of Hospitals: Why You Must Plan Your Medical Practice’s Survival and other health care books. “The evolving hospital model is creating a growing pool of potential opportunities for surgery centers.” Long gone, he says, are the days


when any new hospital is built with hundreds of beds and designed to serve every specialty. “Hospital chains are even beginning to build hospitals with no inpatient beds. This seems to indi- cate that hospitals are no longer going to continue to look like hospitals of old. They are becoming more like ASCs.” Data support his observation that hospitals are undergoing a transi-


The evolving hospital model is creating a growing pool of potential opportunities for surgery centers.”


— Mark Weiss The Mark F. Weiss Law Firm


tion. The American Hospital Associa- tion’s “Trendwatch Chartbook 2016” (www.aha.org/research/reports/tw/ chartbook/2016/2016chartbook.pdf) indicates there were just under 787,000 hospital beds in 2014 compared to more than 901,000 in 1994. The num- bers of community hospitals and ASCs also are going in different directions. There were 5,008 community hospitals in 2009. That figure dropped to 4,926 in 2014. On the other hand, the number of Medicare-certified ASCs in 2014 was 5,446, up from 5,039 in 2009.


struggling and view ASCs as a poten- tial part of their solution to stay afloat. “ASCs are low-cost, high-quality sites of services and that is the direction reimbursement is moving. What hospi- tals are realizing is they would rather have a seat at the table than no seat at all. As a result, the activity within the ASC arena is becoming more robust.” Why the turn of fate for hospitals?


They are facing a growing number of challenges, several of which have the potential to directly affect ASCs, says John Wilson Jr., chief executive officer for ASC management and development company Meridian Surgical Partners in Brentwood, Tennessee. “As health care costs continue to rise, insurance compa- nies, large employers and Medicare will continue to look for ways to reduce costs. One way to do this is to direct appropri- ate outpatient cases from the hospital to the lower-cost setting of an ASC.” Cases once performed only in hos- pitals are increasingly finding their way into ASCs, Mello says. “We are seeing more spine cases done on an outpatient basis, and Medicare is cov- ering a growing number of these pro- cedures in ASCs. The government has made clear it is looking to save money without sacrificing quality.” Contributing to this migration are


advancements in technology and sur- gical techniques, Wilson says. “A great example of this is total joint replace- ment procedures. With advances in anesthesia and pain control, surgeons are beginning to safely and efficiently perform total joints in ASCs. These are lucrative cases for the hospital, so their migration is affecting revenue.” (See


ASC FOCUS JANUARY 2017 15


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