TUCSON, Ariz., April 20, 2017 /PRNewswire/ -- ASCs are big business. From the creation of the first ASC in 1970, the industry has grown so rapidly that, as of July 2016, there were 5,486 ASC facilities certified by Medicare, according to the Centers for Medicare and Medicaid Services (CMS).
Today, however the ASC industry has matured. It is still growing, but there is an increasing amount of mergers and acquisitions as the market consolidates, in anticipation of regulatory changes. At VERTESS, we advise our clients (either buyers or sellers) to consider the following four key trends as they evaluate their best move in this industry segment:
1. Regulation is shortchanging ASCs, but that may change
Medicare reimbursement rates used to reimburse ASCs at 86% of fees paid to HOPDs. Currently, however, ASCs receive 49% of what Medicare pays for a comparable procedure done at an HOPD.
However, ASCs stand to benefit from continued efforts to migrate care to more affordable venues—a trend that will hold true regardless of whether Obamacare remains in place or is replaced by another system.
Pay attention to the ASC Quality and Access Act of 2017, which was introduced in the U.S. House of Representatives on March 30, 2017. The bill introduced a series of measure, including changing the rate of inflation, that would achieve greater reimbursement parity between ASCs and HOPDs.
2. Reform is driving innovation in payment methods.
Government reform has raised the importance of revenue cycle management because increased regulation usually means it's more complicated to get paid. Increasingly, the best run ASCs are those that systematically negotiate rates with payers to ensure they are appropriate.
As healthcare continues to move away from the traditional fee-for-service model, savvy ASCs operators must understand the alternatives such as bundled payments, capitation, clinical integration, and shared savings. ASCs may also want to make additional technology investments.
3. ASCs are being driven to closely manage costs
As noted above, ASCs collect less than HOPDs. To make matters even more challenging for ASCs, the way they are reimbursed is changing. That not only means less revenue, it means less profitability unless expenses are well managed.
ASCs must pay careful attention to all expenses, especially those related to HR and supplies. Practice managers must assess staffing levels to ensure they are adequate given volume levels and optimize scheduling to ensure proper utilization of the surgicenter.
4. Consumers and suppliers want "one-stop shopping"
One final trend is the demand for "one-stop shopping" from both consumers and suppliers.
On the consumer side, experts have noted the increasing demands that consumers are making on the healthcare system. Patients want care that is affordable, competent, and convenient. This healthcare-on-demand preference is seen in the rise of urgent care centers, retail clinics, and ASCs, among others.
To address this need, an increasing number of ASCs are recruiting other specialties with surgical cases, such as gynecology and orthopedics, creating and exploring the one-stop-shopping model.
If this trend continues, it will result in combinations of ASCs with imaging center, ambulatory groups, such as physical therapy and podiatry practices, and ophthalmology, and otolaryngology.
For further information, please contact Luis de la Prida at email@example.com or 917-768-0698.
VERTESS is an international healthcare-focused M + A advisory firm with expertise in diverse healthcare and human service verticals, ranging from behavioral health and I/DD to healthcare IT, DME, home care/hospice, urgent care, life sciences and other specialized services and products.
VERTESS is headquartered in Tucson, Arizona, with additional offices in Phoenix, Dallas/Ft. Worth, New York and Mexico City. For more information visit www.vertess.com.
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