13 leaders on management trends in 2023

As hospitals sever service lines, physician pay continues to drop and supply chain disruptions persist, healthcare industry professionals see both opportunities and challenges going forward. 

Thirteen healthcare leaders recently connected with Becker’s to discuss how leadership structure at ASCs, hospitals and health systems could be affected by the evolving healthcare landscape. 

Q: How do you expect the health system/hospital/ASC ownership structure to shift in the next year?

Note: Responses have been lightly edited for length and clarity.

Nick Aubin. Co-founder and CEO of Commons Clinic (Austin, Texas): Over the next 12 months and beyond, I expect risk-based care delivery platforms to take an increased strategic interest in ASCs, often supplanting a hospital/health system’s role in ownership syndicates. Privia, a national primary care enablement platform, has already been active with a number of JV sites with Surgery Partners to help manage total cost of care contracts with health plans. These relationships can be win-win as value-based providers benefit from efficient, lower-cost sites of service and ASCs access strong rates plus captive case volume.

Brian Bizub. CEO of Raleigh (N.C.) Orthopaedic: Valued-based healthcare and inpatient surgical procedures migrating from the inpatient-only list to the outpatient list is creating a shift for hospitals to broaden their market share by shifting to ASCs. Although, hospitals-only owned ambulatory surgical centers receive reimbursements for implants versus ASC which only receives a facility fee creates a paradigm to maintain both ACCs and ASCs. However, hospitals are now more willing to partner with physician-owned ASCs to create a larger portfolio and extend their long-term vision and strategy in the healthcare space based on consumer demand and preferences. Hospitals and physicians’ practices have shifted to a more retail model that responds to the consumers’ preference and a more personalized experience. In my opinion, hospitals will continue to grow in the ASC environment to maintain a share hold in growth in their communities. ASC are less expensive to consumers than hospital-owned ASC, and the financial investment in joint ventures with physicians creates cost consciousness, increases surgical volumes and drives patient satisfaction.

From the insurance perspective, payers are looking for the best value and outcomes for their members, and the ASC model provides both for the appropriate members of their risk pool. 

Michael Boblitz. CEO and Chief Strategy Officer of Tallahassee (Fla.) Orthopedic Clinic: Market forces continue to shift towards lower-cost settings of care with ASCs front and center.  

Employers are beyond frustrated with the never-ending rise in premium costs to administer healthcare benefits to their employees and beneficiaries. Payers are under attack as a result and beyond frustrated with provider networks for not being able to aggressively respond to the pressing desires to lower the overall cost of care.  

The employers are beginning to seek direct-to-provider arrangements that guarantee care in the lower-cost ASC setting and thus reduce the spend by at least 30-40 percent per case (relative to hospital-based surgery).  

Payers are thereby scrambling to create: 1. New payer policies that no longer cover certain elective outpatient surgery in hospital-based settings, and 2. Building “in-house” provider networks that include ASCs with a laser focus on moving patients to lower cost settings … fast.

Several states are also responding to the rapidly rising costs and related employer frustrations by going even further to consider abolishing the certificate of need law that has preserved hospital-based surgery, and restricted the ability for more ASCs to be built and help reduce cost of care. Some states, such as Florida, already implemented this change.

As Newton’s third law has always stated, “Every action creates an equal and opposite reaction,” and to no surprise hospitals are trying to react to the same market forces and making modest investments in ASCs, but at a very slow pace.

Over the next year and beyond, the tailwinds will continue to fuel the growth of ASCs with employers and payers leading the charge and hospitals running behind trying to keep up and stay in the game.  

I envision the structure to swing towards pure surgical practice ownership without any joint venture arrangements that may include non-provider capital lending and certainly the continued opportunity to partner with private equity firms.

Looking further, the joint venture ASC model will shift from traditional hospital/surgical practice arrangements to payer and surgical practice partnerships with direct-to-employer bundled pricing coming along for the ride. 

Adam Bruggeman, MD. Spine Surgeon at Texas Spine Care Center (San Antonio): I don’t think we have seen the end of consolidation within the healthcare ownership market. The mix of increasing costs and reduced reimbursement will continue to accelerate consolidation, leading to further acquisitions in the ASC and health system space. This trend will continue to drive costs upward, and I ultimately believe will help increase the desire to lift the ban on physician-owned hospitals over time. New growth in the sector will continue to come from ASCs as surgeons recognize the importance of ownership in facilities that are seeing upward trends in reimbursement while physician compensation continues to trend downward.

Bob Bush. CEO of Austin (Texas) Diagnostic Clinic: I think that we will begin to see third party (i.e. private equity) become more involved as health systems are trying to regain their footing after the financial demise of the pandemic.

Karen Flinn Fowler. CEO of Trisource Health (Plano, Texas):

1. I believe we will continue to see growth in physician-owned ASCs as well as additional partnerships with equity investors or affiliated hospitals.  

2. Payers will continue to push on reimbursement to ASCs and continue to bundle services. 

3. As technologies advance, it appears that many services that were only able to be done in a hospital ASC will be approved to be done in freestanding ASCs.

4. Services in ASCs will continue to grow in the areas of pain management, orthopedics, podiatry, ENT and ophthalmology.

Darin Hill. CEO of Compass Surgical Partners (Raleigh, N.C.): We’ve seen a dramatic uptick in hospital ASC engagement as they seek to participate more fully in the outpatient migration. We expect to see many new market-level ASC joint venture relationships to be announced over the next year between hospitals and ASC managers. We expect the most aligned partnerships with agile ASC managers to be the most successful.

Kim Mikes, BSN, RN. CEO of Hoag Orthopedic Institute (Newport Beach, Calif.): As the popular saying goes, “follow the money.” When CMS moves more orthopedic and spine procedures from inpatient-only status to ACS status, more surgeries will be performed in ASCs. Our orthopedic surgeons were pioneers in doing joint replacements in ASCs, so our model of care is built around an inpatient hospital and a growing network of ASCs. We plan to open at least one more ASC this year to serve the growing need in our community. It reduces costs for all stakeholders when orthopedic procedures can be done in the ASC with no reduction in clinical outcomes. That’s why more hospitals and health systems are acquiring more ASCs. More importantly, private equity — so-called smart money — is reshaping our industry. Because of the value proposition, these deals will continue to accelerate. With this shift, we may see more consolidation and investment in ASCs across the country. 

Dean Parry. Assistant Vice President of Clinical Informatics at Geisinger (Danville, Pa.): My overall feeling is there is going to be continued consolidation of hospital/health system ownership at least for the next few years. I believe the financial struggles and infrastructure needs will continue to push the industry in that direction, seeking a wider, more stable financial base. Unfortunately, that creates problems for a number of our smaller more rural institutions, which may not have financial resources to remain viable but also may not be attractive to larger health systems because of the limited nature of their practice and the difficulty of recruiting staff to that area, which only then adds to the financial pressure on the hospital. The other pressing issue which I believe will contribute to more consolidation is the lack of availability of cash for investment in new facilities, projects and/or services. With about 50 percent of our hospitals and health systems struggling over the past year or two, the amount of cash available to invest in new services or facilities is dwindling very quickly. This makes the option to sell or merge to a large hospital system with a more stable financial outlook a very attractive option versus the past, when the same hospitals or health systems may have undertaken their own investments to fuel expansion.

Herbert Pierce. CEO of Vistar Eye Center (Roanoke, Va.): Our ASC is ophthalmology-specific, so I don’t expect much movement towards hospital ownership. The trend that may move ownership of ophthalmology-only ASCs is the trend of practices joining private equity. When those practices sell to PE, they almost always include a separate deal to sell the ASC to PE as well.   

Raghu Reddy. Chief Administrative Officer of SurgCenter of Western Maryland (Cumberland): The investments by the hospital systems in ASC have been steadily increasing in the past few years. There is a significant movement towards value-based care, increasing employment of physicians by health systems, and competition among health systems is growing. There is a lot of M&A activity in the ASC space by health systems, corporate chains, and private equity firms. The health systems are either pursuing their own ASC strategy by developing their ASCs or buying into the existing ASCs with different ownership structures. This move is driven by the shift of ASC-eligible cases from HOPDs to ASCs mainly due to CMS adding more procedures to the ASC-covered list, payers requiring patients to opt for ASCs or stand to pay higher out-of-pocket expenses when they utilize the HOPD. Also, patient outcomes, satisfaction and profitability favor ASCs, and health systems are trying to create or broaden their ecosystem with the ASCs in their portfolio. The physician owners of ASCs welcome health system partnerships to mitigate issues like supply chains, payer contracts and other tangible benefits. This partnership between physicians and health systems in an ASC could lead to fewer politics, and the focus will be on serving the patient population in their demographics. The future is bright for the ASCs, with more high-acuity cases shifting with evolving technology and a drive that payers accelerate to reduce their spending, and the health systems see it.

Kevin Seely. CEO, Centers for Gastroenterology (Fort Collins, Colo.): I believe that pressure on hospitals will come from two primary areas, the first being from payers who are seeking high-quality, low-cost options for their insureds to seek care as an alternative to the traditional inpatient space. ASCs are well-positioned to offer the ideal mix of efficiency, cost savings and high quality to better serve patients and control cost. The second being the long-term relationship and investment value for physician owners. For hospitals to maintain beneficial relationships with specialty physicians most apt to pursue ASC ownership, hospitals and health systems are going to have to be more receptive to partnering with both independent and employed physicians in ASC operations.

Melissa Waibel, BSN. CEO of Guam Surgicenter (Tamuning): Mainland U.S. is completely different to Guam. There is no expectation here that any shift in ownership structure will change. I do believe there will be more interest in the mainland U.S. for hospitals to continue to try to obtain shares in or control of ASCs. Medicare has seen the advantages provided by ASCs in cost savings, quality, patient satisfaction and efficiency. I believe that will increase the cases being approved for the outpatient surgery setting. Our government dollars are dwindling, and buying power is dwindling with it. The government needs to use their dollars as efficiently as possible.


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