Primary care physicians are investing in ambulatory surgery centers

By Stephen W. Earnhart, MS
CEO
Earnhart & Associates
Austin, TX

First, I am delighted to hear about the Tenet/USPI/Aspen play. (Editor’s note: Dallas-based Tenet Healthcare Corp. is buying United Surgical Partners International [USPI] and Aspen Healthcare.) Since the inception of ObamaCare, I have been forecasting the enormous opportunities the plum of surgery centers and specialty hospitals offer to the business world. Our industry is a wonderfully complex breathing conglomerate of moving parts struggling to find a home. The fact that it is completely fragmented made up of thousands of mom and pop facilities across this great country makes it too tempting to pass up for the astute business world.

How this trend eventually will play out is fairly easy to predict. Tenet and others will continue to gobble up facilities worthy of their lofty requirements, and the more they acquire, the greater their appetite for more will grow. Because America loves competition and one-upmanship, there will emerge another giant bent on duplicating and thwarting what Tenet has done.

What impact will this trend have on the rest of us? Well, if you want to be invited to the dance, you better put on your best clothes and focus on making your facility the best that it can be! Publish your successes. Become visible. Attend trade shows. Become active in the community and your local associations. Every facility is for sale; it’s just the price that is the issue.

With so much money following and invested in surgery, hospital, and freestanding facilities, another huge benefit I see out of all of this is we are going to see more procedures going outside the primary surgery department of the hospitals. They will move into other hospital-based surgery departments or hospital-affiliated facilities or freestanding surgery centers. I would not be at all surprised to see the total hips and knees we discussed in last month’s issue making their way onto the Medicare approval list for freestanding surgery centers.

The focus on profitability will continue to grow (hey — someone has to pay for all this), but there is nothing wrong with a high-quality, outcomes-focused business making a profit!

Changing the subject. As I mentioned in last month’s column, let’s talk about boosting referrals to your surgeons via primary care physicians themselves, much like the hospital markets do. One of the primary referrals that hospitals have that surgery centers don’t is the ability to have patients come to them. The surgery center world must wait for a patient to go to the surgeon and then come to the surgery center.

One of the most effective referral methods is via the primary care physician (PCP). Are there anti-kickback statutes that prohibit a primary care physician as an investor in your ambulatory surgery center (ASC) from referring cases to the center? No!

PCPs can be investors and refer patients to your facility, but it has to be done properly, i.e. paying fair market value for shares like any other investor, no requirement for minimum or maximum number of referrals, and nothing that requires them to refer exclusively to your ASC. While ASCs are exempt from Stark issues, we are not one of the safe harbors that come under the Anti-Kickback Statute.

So when there are no other surgeons out there to attract to your ASC, consider contacting your busy primary care network of physicians who are referring their surgical patients to someone else. Make them aware of your facility specialty mix and how such an arrangement can benefit everyone, including their patients.

As most of you know, I am not an attorney, and I would recommend that you contact your own healthcare attorney if you have questions about setting up such an arrangement.

[For more information on this topic, see “Freestanding EDs and urgent care centers as new sources of surgical referrals,” Same-Day Surgery, April 2015. Earnhart & Associates is a consulting firm specializing in all aspects of outpatient surgery development and management. Contact Earnhart & Associates at 5114 Balcones Woods Drive, Suite 307-203, Austin, TX 78759. Phone: (512) 297-7575. Fax: (512) 233-2979. E-mail: [email protected]. Web: www.earnhart.com.]

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