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Dec 04

Can Hospital Affiliated ASCs Survive?

If a procedure can be performed outside of the hospital, it will be performed outside of the hospital. And, as technology and payor acceptance accelerate, more, even most, procedures will be performed outside of a hospital.

That’s the major takeaway of my book, The Impending Death of Hospitals. If you haven’t read it yet, buy it on Amazon now or visit my firm’s website and get it for free.

Hospitals are waking up to the fact that the writing’s on the wall. Witness Tenet Healthcare’s merger with United Surgical Partners International.

Other hospital chains and many community hospitals have attempted to stem the bleeding by shifting cases to their hospital outpatient departments. They’ve been successful, so far, in convincing payors that the higher cost structure of an HOPD warrants higher reimbursement than at an ASC. But that’s a losing game. Eventually, the payors that have not already pared back HOPD reimbursement to parity with ASCs will wake up to the fact that costs have nothing to do with value.

Many hospitals with the ability to see on a second order level have joint ventured with physicians in ASC deals. For them, it’s an attempt not to lose out entirely on the increasing flow of outpatient surgical business.

But as hospitals lose their relevance, why would physicians who can move their cases to a facility in which they can have ownership, increased control, and more freedom, want to give any interest to a hospital?

This is even more true in light of the fact that hospitals often demand majority ownership and the right to bring along their bloated administrative “leadership,” and their business-killing O.R. management “skills.”

If you would’t go swimming with an anchor tied to your waist, why go into business with the dead weight of a hospital surgically stapled to your future?

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com

 

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