Eyeworld

126 | EYEWORLD | DECEMBER 2020 P RACTICE MANAGEMENT About the authors Robert McCarville, MBA Managing Principal and Consultant Medical Consulting Group Springfield, Missouri Stephen Sheppard, CPA, COE Managing Principal and Consultant Medical Consulting Group Springfield, Missouri by Stephen Sheppard, CPA, COE, and Robert McCarville, MPA an OR the same way, regardless of which proce- dure was just performed in that space or which is scheduled to follow it. ASCs, on the other hand, are by design both effective and efficient. Experts estimate that ap- proximately half of the procedures performed in hospitals could be transferred to ASCs. Not only can they be transferred to ASCs, but studies have shown that the mean turnover, ancillary time, procedure time, exit time, and non-oper- ative time within in an ASC are all shorter than in a hospital. By performing less acute cases in an ASC, the hospital frees up operating room hours to devote to more high-ticket procedures. For hospitals, investing in joint venture ASCs may serve as a more economical alternative to investing in the development of additional OR space. Shrinking insurance payments to hospi- tals. Several large insurance companies have instituted max "ASC payment rates" for some high-volume procedures. This means that even if the procedure is done in a hospital outpatient department (HOPD), the reimbursement will be at lower levels typically seen in the ASC. Factors motivating physicians As mentioned, physicians have been gravitating toward ASCs for years, dominating the market. The following are some of the most common reasons physicians are choosing to partner with hospitals instead of competing: Avoid certificate of need issues. Physicians interested in ASC development are required in certain states to acquire a certificate of need (CON) before they receive approval to build a facility. Designed for the purpose of protecting existing hospitals and patients' access to care, there are those within the industry, and several studies, dedicated to determining whether the CON process actually hampers competition by favoring hospitals, giving them leverage over physicians looking to develop an ASC. To avoid these issues, some physicians elect to a partner- ship. Motivators behind the rise of physician- hospital joint venture ASCs T oday, there are nearly 6,000 Medicare- certified ambulatory surgery centers (ASCs) nationwide, outnumbering hospitals. The majority of these ASCs are physician-owned, but as ASC care systems evolve, there are more and more hospital and larger healthcare systems getting involved. In fact, both physician and hospital interest in ASCs is at an all-time high in 2020. With so many great minds thinking alike, physician-hospital joint ventures have also been growing in popularity. This has been the case for several years but is especially relevant now due to COVID-19's effect on patient and pro- vider mindsets. What has been steadily driving physicians and hospitals to seek out these ASC partnerships? There are two sets of potential motives to consider, as well as the influence of the public's changed perception of "safe care." Factors motivating hospitals In the past, hospitals have remained on the sidelines while physicians dominated the ASC industry. Today, hospitals are embracing ASC joint ventures for several reasons: Stabilize medical staff. Turning physicians, within or outside of the hospital, into business partners may help to stabilize the hospital's medical staff. It creates the opportunity to cultivate better relationships with physicians, potentially preventing poaching, incentivizing physicians to stay, facilitating recruitment, and limiting new competition. Retain revenue. In addition to improving relations with physicians, partnering to develop or buy into existing ASCs allows hospitals to retain a significant percentage of the revenue that may have otherwise been going only to physician-owned ASCs. Economically expand OR space. Hospitals are becoming increasingly more bureaucratic with regulations due to the need to care for infectious patients. These across-the-board reg- ulations contribute to hospital effectiveness but also create inherent inefficiencies. For example, hospitals are required to comprehensively clean

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