Image by Ivča from PixabayWhile every year brings new challenges and opportunities, 2024 has been especially interesting for ambulatory surgery centers (ASCs) and the patients they serve.
The narratives shaping this year include the ongoing shift of higher-acuity procedures into the ASC setting and continued workforce challenges, especially around anesthesiology capacity. Storylines defining 2024 also include robust M&A and joint venture activity, including rumors swirling around one of the largest ASC operating companies in Surgery Partners (Nasdaq: SGRY).
To help take stock of the first seven-plus months of the year while looking ahead at the back half of 2024, ASC News connected with several ASC industry leaders, who shared their perspectives on the most significant trends, challenges and opportunities on their radars.
You can read their responses below, edited for length and clarity.
Joan Dentler, Founder, Avanza Healthcare Strategies
Maintaining adequate anesthesia coverage is one of the top challenges facing many ASCs.
Anesthesia providers increasingly seek subsidies/stipends, volume guarantees, and/or collections guarantees from ASCs. Factors contributing to this include the shortage of providers, increased competition for providers and health system ownership of ASCs where anesthesia providers have had subsidies and stipends included in their contracts.
ASCs must include subsidies and stipends in the financial projections and proformas from the beginning of their planning and feasibility work. With the lower reimbursement earned in the ASC setting, additional costs for anesthesia can make or break the margins of a center. They could make it an unattractive investment for surgeons who may be considering investing in a new ASC.
Employing anesthesia providers may be an option, as might relying on part-time (i.e., pro re nata/PRN) providers. Contracting with an anesthesia recruitment/staffing firm could help fill openings. All costs related to anesthesia should be included in financial projections from Day 1.
To attract anesthesia providers, ASCs will want to emphasize the qualities that should make them more appealing places to practice than hospitals. These qualities include a regular, predictable/pre-defined schedule, non-emergent cases with a determined length, no holiday work, no call and typically no weekend hours.
Once an ASC has secured anesthesia coverage, following some foundational best practices can help with retention. Ongoing communication, collaboration and transparency with providers are critical. ASCs should seek ways to involve their anesthesia providers further in the ASC’s operations, including having anesthesia providers serve as the medical director and/or on the medical advisory committee.
Anesthesia providers should be well-informed about changes to the surgical schedule, additions of new physicians, procedures and specialties, capital investments and projects, and other noteworthy developments that may affect their work. Making anesthesia providers feel valued, appreciated and important members of the ASC team can help with satisfaction – and loyalty.
Kim Wilder and Leslie Cottrell, Administrators, Baptist Health Surgery Center & Baptist Physicians Surgery Center
Supply chain costs, affected by inflation, continue to increase. We meet this challenge by working with our system supply chain partners to ensure we have the most advanced surgical equipment and imaging.
Our other challenge is health care staffing. We realize the labor shortage is shared throughout the country. We face this challenge with competitive pay and benefits and leverage the culture well-established by the community hospital that shares our brands and has been serving our patients for over 60 years.
We have treated a record number of patients to date in 2024, and we are working diligently to meet these challenges with the high-quality and compassionate care we provide all our patients.
Chase Hall, Vice President of Operations, Baptist Health Louisville
Our facility (Baptist Health Breckenridge) opened on Sept. 1, 2023. As the saying goes, “starting a business is hard,” which became more evident as we went through the administrative steps to become credentialed with the state and the U.S. Centers for Medicare & Medicaid Services (CMS) to operate.
When we opened, there was significant energy and excitement. That feeling quickly normalized as it took 120 days for our initial Office of Inspector General (OIG) survey, and another 160 days until we received our Medicare and Medicaid credentialing information.
Waiting three-quarters of the year to become authorized to bill for services significantly stresses an ASC’s financial viability and impacts surgeon engagement. Our ASC is fortunate to have the backing of a large health system, but those early losses end up pulling resources from another area in need within the health system.
Lisa Ishii, Senior Vice President of Operations, Johns Hopkins Health System
Our No. 1 challenge has been staff recruitment and retention. This is true for all staff, from nurses to sterile processing techs to surgical and radiology techs.
It is further true in all three of the markets that we serve across our seven ASCs. Our approach has been to lean into compensation, benefits and staff engagement. Our staff experience scores are the highest they have ever been, and we continue to promote a positive culture emphasizing communication, collaboration, transparency and well-being.
We further develop career ladders so staff appreciate a path forward within the organization.
Michael McClain, Founder and Managing Member, LeftCoast Healthcare Advisors
The biggest challenge ASCs face for 2024 is rising expenses across multiple facets of their business.
ASCs are seeing price increases in the overall cost of providing service through increased labor expenses (salaries, wages, staff benefits) and increased costs for goods and services (medical supplies, implants, utilities, rent, insurance). They are even seeing increased costs for subcontracted services like anesthesia care due to the relative shortage of providers, as reimbursement remains stagnant.
While the ASC industry might typically face any of these challenges (increasing labor costs, anesthesia shortages, rising supply costs, increased liability costs, etc.), in 2024, ASCs often see all these challenges simultaneously.
Brent Stackhouse, Managing Director, Mount Sinai Ventures
As we continue to build new ASCs, we have encountered a surprising trend in insurance contracting. Despite ASCs being significantly more cost-effective than hospital settings – often costing half as much – some payers refuse to negotiate contracts with them.
It is perplexing that insurance companies would impose higher premiums on their clients rather than embrace the national shift toward lower-cost, high-quality care settings. To address this, we are expanding our partnerships with self-insured employers and collaborating with intermediaries to facilitate direct scheduling with our surgeons for their employees.
There is a growing demand for highly skilled administrative and clinical talent, essential for running ASCs smoothly and safely. However, many candidates find higher pay opportunities in other settings. By establishing an extensive network of co-owned facilities, we are developing comprehensive staff training and advancement programs to attract and retain talented individuals, nurturing them to become the next generation of health care leaders in ambulatory settings. This process will take time, so for now, we are focusing on enhancing staff satisfaction and team morale and ensuring equitable and competitive compensation.
Leslie Barrett, Senior Vice President, Ambulatory Surgery Strategy and Execution, Novant Health Enterprises
Our biggest challenge – and our biggest opportunity – is to keep pace with the ever-evolving ambulatory landscape. There are significant growth opportunities as ASCs expand rapidly due to the Certificate of Need repeal, payment reform and advancements in surgical technology.
Consumers, payers and providers are increasingly choosing outpatient surgical settings over inpatient. ASC leaders must have the ability to rapidly scale a comprehensive set of ASC-specific services without compromising on safety, quality and the patient experience.
Our strategic growth arm, Novant Health Enterprises, has created a dedicated team focused solely on optimizing and growing this business sector. We’re working to develop innovative physician partnerships and flexible delivery models that would allow us to expand our high-quality, patient-centered care across the Carolinas and beyond.
We are excited to be part of this transformative approach to ambulatory surgical growth as we work to create a healthier future for our patients and communities.
