Fifty years ago, the freestanding surgery center movement was born. It has expanded services and grown each year to unprecedented levels, far and away beyond what was expected.
Little did anyone know the implications of such a move. Hospitals continue outsourcing to ASCs, causing intermingling of services and cultures that challenge both. Surgery centers, conceived by frustrated surgeons wanting a more efficient workplace, decided they could improve the services in their own facilities better than in the traditional hospital environment. However, realizing the errors of their ways, hospitals have made great strides in the improvement of their services and are eager to joint venture with surgeons in several ways.
This includes developing and managing their own ASCs, buying out existing centers, and developing HOPDs that provide surgical services similar to freestanding ASCs.
Not surprisingly, things do not always go as planned. After 85 hospital/surgeon joint ventures, my company has made striking observations that I would like to share.
As someone who enjoys boating, I have divided these into two lists: “Tailwinds” (issues that make the process easier), and “Headwinds” (issues that make the process harder). The “Tailwinds” are as follows:
- Need. There has to be an integration between the two entities for access to services and cost reduction. Whenever there is a need, a way will be found to make it happen.
- Public opinion. The general population is tired of the healthcare burden; they want viable solutions. Generally, ASCs are about 40% cheaper than hospitals and have the attention of the right people in government (as well as payors).
- Additional revenue sources. With additional cuts to surgeons’ professional fees, they need another source of income from their ASC. However, they also often need some service from hospitals, such as referrals from the typically primary care physicians employed by hospitals, to grow and expand services.
- Retiring surgeons. Many aging surgeons are ready to sell their equity. Thus, plenty of ASCs are for up for sale. Often, hospitals are the highest bidders.
The remaining four points concern “Headwinds”:
- Information technology (IT). Hospital-based IT departments remain the greatest obstacle to making ASC industry software work the way it was designed. ASCs thrive on case-costing and efficiency reports that companies like Surgical Information Systems and HST Pathways provide. Hospitals have their own software packages that need to service many different areas in the system. Thus, hospitals cannot always drill down to the level of detail ASCs need. While there often are interfaces between the two systems, there remains strong resentment from hospital-based IT departments to even consider the bastard child of ASC software.
- Electronic medical record. Part of IT, this can be a hard task because ASC-based systems typically do not play well with hospital-based systems. This is a serious obstacle regarding integration of what is needed vs. what is required.
- Mentality. ASC advocates can carry an attitude of “We are better than you, and can prove it.” Meanwhile, hospitals may retort: “Who cares? We will eventually buy you, and close you.” There is a divide in the overall rigid bureaucracy of some hospitals and the freewheeling mentality of ASCs.
- Human resources. It is almost impossible to eliminate ineffective personnel in a hospital. That same protectionism strongly conflicts with the “employee at will” philosophy of most ASCs.
When I started these lists, they grew longer than space available. Many readers have been part of this process on both sides, and likely create similar lists.
(Earnhart & Associates is a consulting firm specializing in all aspects of outpatient surgery development and management. Address: 5114 Balcones Woods Drive, Suite 307-203, Austin, TX 78759. Phone: (512) 297-7575. Fax: (512) 233-2979. Email: [email protected]. Web: www.earnhart.com. Instagram: Earnhart.Associates.)
Hospitals continue outsourcing to ASCs, causing intermingling of services and cultures that challenge both. Surgery centers decided they could improve the services in their own facilities better than in the traditional hospital environment. However, hospitals have made great strides in the improvement of their services and are eager to joint venture with surgeons in several ways.
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