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complicated when the legacy physicians have to dilute their shares to make room. Fair market value (FMV) requirements also can price an existing ASC out of the market, making it cheaper to build new rather than buy into an existing busi- ness at a high multiple. And certain spe- cialties might prefer a more specialized ASC, like cardiology and vascular desir- ing a cath lab configuration.


Surgical cases recently thought impossible to be outpatient are now safely performed every day at ASCs that are blazing a new trail for higher acuity cases.”


—Terry Bohlke, CASC, ASCA Board


more patients choosing the ASC setting for mastectomies, open hernia repair, bladder procedures, large reconstruc- tive plastic procedures and many oth- ers. Innovative techniques like intraop- erative radiation therapy (IORT) will bring new specialties, like radiation oncology. With technologies and tech- niques developing so rapidly, there are procedures and specialties moving to the ASC that no one can predict today.


Industry Consolidation After a year of giant ASC companies merging and being acquired, I would expect that activity to slow. We will continue to see acquisitions and indus- try consolidation on a more micro level. About half of the ASCs in the


US are “independent,” meaning they are not managed by one of the large ASC management companies. I expect many of these independent ASCs will be acquired by the larger ASC manage- ment companies, hospital systems and physician super groups. Hospital sys- tems have seen the benefit of ASCs in their networks and this trend will con- tinue. I also expect to see more physi- cian super groups buying and building ASCs, as they have seen the benefit for payers and their physician partners. The number of surgery centers has


not grown significantly over the last 10 years, however, I expect a surge in de novo ASCs in the coming decade. Most current ASCs are nearly fully syndi- cated and bringing on new partners gets


14 ASC FOCUS JANUARY 2018 |www.ascfocus.org


Barriers to Growth While the future for the ASC industry is highly favorable, there are certainly bar- riers and counter balances to volume growth. Some procedures will migrate to alternative locations. Pain manage- ment injections are frequently performed in a physician’s office, and we will likely see fewer pain management cases in the ASC. Technologies for screening colo- noscopies are evolving, sometimes not requiring a procedure, and this might impact the number of gastroenterology (GI) procedures in the ASC setting. Hospital employment of physicians has limited ASC growth in some mar- kets. However, as hospitals continue to add ASCs to their networks and pay- ers and employers continue to pro- vide meaningful incentives to patients to use ASCs, many of these cases will migrate back to the ASC setting. Specialties like GI and pain manage- ment count for big numbers in ASC vol- umes, and big decreases in these spe- cialties will likely mean net decreases in total cases performed in ASCs, despite the other growth specialties and procedures described above. The reve- nue and profitability of the new higher acuity cases, however, will result in a giant net positive change to the indus- try, measured in revenues, profitability and relevance of the ASC to the overall health-care delivery system.


Terry Bohlke, CASC, is the immediate past president of the ASCA Board and vice pres- ident of ambulatory surgery centers for a health care company in Franklin, Tennes- see. Write him at terry_bohlke@chs.net.


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