TRENDS
equity to physician owners. Conversions might also take place when an HOPD is underperforming financially and the hospital owner wants to bring in an ASC management company to form a three- party joint venture to help improve the performance. In our 2020 survey, nearly two-thirds of respondents indicated seeing an increase in three-party joint ventures, suggesting hospitals and health systems continue to see value in partnering with ASC management ser- vices organizations.
Respondents in the 2020 survey also expressed some changing preferences
for the types of cases being performed at their ASCs. In particular, each year we ask respondents about the desirabil- ity of having cases of various surgical specialties performed at their surgery centers. In 2020, the largest increase in desirability was for cardiology and vas- cular procedures, which we believe is attributable to the Centers for Medicare & Medicaid Services’ (CMS) recent approval of several cardiology and car- diovascular procedures for payment in the ASC setting, including many cath- erization, angioplasty and stenting pro- cedures. Other highly desirable spe-
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cialties including orthopedic and spine cases recently had additional proce- dures approved for the ASC setting as well, including total joint procedures that have the potential to increase prof- itability when managed effectively. More broadly, the shifting of surgical procedures to the ambulatory setting will likely have a continued impact on the desirability of various medical spe- cialties, as well as the strategies pursued by providers over the coming years.
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Our benchmarking survey provides insight into the financial and operational performance of single-specialty and multispecialty ASCs across the country. Some of the major trends highlighted in the 2020 survey relate to changes in reimbursement rates and operating costs. More than half of respondents indicated that commercial reimburse- ment rates are increasing at a rate below inflation, while expenses are increasing faster than inflation. This contributed to a slight decline in the median reported earnings before interest, taxes, depreci- ation and amortization (EBITDA) mar- gin in the 2020 survey as compared to the 2019 survey. ASCs with the ability to perform higher acuity cases in spe- cialties such as orthopedics or spine might be better positioned to deal with these pressures going forward due to the higher reimbursement and profit potential associated with these cases. Our annual survey also asks respon- dents about a variety of important met- rics including net revenue per case, cases per operating room per day, revenue concentration among the top performing physicians, payer mix and working capi- tal needs. These metrics, along with the insight provided in our valuation survey can serve as a helpful tool for stakehold- ers across the ASC spectrum.
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14 ASC FOCUS OCTOBER 2020 |
ascfocus.org
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