Due to various changes in reimbursement in the last ten years, ASC growth has slowed, and the rise of the hospital-ASC joint venture has become apparent, according to Jeffrey Simmons, CDO, and Tom Mallon, founder and CEO of Regent Surgical Health at the Becker's Hospital Review 5th Annual Conference in Chicago on May 16.
The joint venture has risen in answer to the flatline in ASC growth observed in the past few years, according to the pair. While 95 percent of ASCs in the United States are at least partially physician-owned, the decrease in growth has left them scrambling. "How do you grow if there's no growth? Consolidation," said Mr. Simmons. "There are 5,300 surgery centers in the United States, and it's about supply and demand: The market is too saturated. Centers are consolidating."
While a hospital-physician joint venture can be a winning proposition for both parties, it's important to understand physicians' motivations for moving to an ambulatory setting in the first place, said Mr. Simmons. "The number one reason is control, followed by efficiency, followed by profits," said Mr. Simmons. "In order for a joint venture to be successful, hospitals have to understand the physicians want control."
He and Mr. Mallon suggested a model in which physicians keep control over day-to-day operations, but hospitals have the final say in the business plan and business decisions. "It's the most sustainable model, not designed to be broken up in a couple of years," said Mr. Simmons. I've never seen less than a 30 percent increase in rates because of partnership with hospital."