Why Health Systems Should Invest in ASCs

 

Ambulatory surgery centers (ASCs) are growing exponentially in the healthcare market as we see hospital-based outpatient care shifting to freestanding surgical facilities. On top of the 23% growth of ASC outpatient procedure volumes over the last few years, experts predict another 16% growth through 2026 due to low cost to consumers, greater accessibility to life-saving procedures, and changing reimbursement rates from insurance providers. Some would argue that this is a threat to hospitals and that they need to now compete in an oversaturated market for surgical revenue. However, another approach could lead to revenue growth and an increase in quality across healthcare facilities.

 

Instead of focusing efforts on drawing in potential surgery patients to hospitals, health systems should follow the money and invest in new or existing surgery centers. Although these procedures are cheaper, it seems that the mass influx of patients and reduced operational costs for the facility would offset the loss of revenue from a hospital’s reduced inpatient and outpatient volumes. Both private payers and CMS have actually increased reimbursement rates to ASC procedures to combat the rising expenses in hospital outpatient settings that often leave hospitals indebted and at risk of closure. These factors also increase revenue to physicians, leading them to seek either employment or equity stake in ASCs as they see this trend continue.

 

Since consumers, payers, and employees all benefit by making this shift, it makes sense for larger systems to invest their resources in these facilities as it would improve their clinical quality and brand recognition. Health systems and hospitals can affiliate with ASCs through a variety of means, such as joint ventures, timesharing, and acquisitions, in order to profit from this market. Regardless of the method, they too can benefit from a changing healthcare environment instead of fighting it.

 

Read more about the ASC market:

https://www.advisory.com/daily-briefing/2019/03/05/asc-shift

https://www.reliasmedia.com/articles/143809-asc-market-growth-on-track-for-2019-and-beyond