Health systems boost ASC investment


Two-thirds of hospitals and health systems plan to increase investment in ambulatory surgery centers, according to a new report.

After several years of relatively slower growth, hospitals and health systems are ramping up ASC construction and conversions, with the share of providers planning to boost ASC investment rising from 44% in 2019 to 67% in 2020, according to Avanza Healthcare Strategies’ survey of more than 100 executives who were polled prior to the COVID-19 pandemic. The primary driver behind ASC expansion was to increase outpatient surgical capacity, according to Avanza, which guides providers through ASC development.

“Many hospitals are converting their outpatient departments or migrating cases to ASCs,” Avanza CEO Joan Dentler said in prepared remarks. “This was true before the pandemic reinforced the business case for every hospital having at least one freestanding ASC in its portfolio.”

An even bigger proportion of larger hospitals are expanding their ASC portfolio, with about 76% planning to commit more resources. The 186-hospital investor-owned system HCA, for instance, is continuing to invest in ambulatory surgery centers.

“Our de novo ambulatory surgery pipeline is probably more robust than it has been in many years,” HCA CEO Sam Hazen said in a recent investor call.

A Bain & Co. survey from May also found a continued shift of care to ASCs. But the surgeons polled did not anticipate COVID-19 will accelerate this shift when compared to growth over the last two years.

While most hospitals with ASCs operate them as physician joint ventures, only a third allowed employed physicians to invest in ASCs—the lowest number in three years, Avanza found. Seventy-nine percent of hospitals prefer to own more than 50% of the equity of a joint venture, which allows ASCs to leverage hospitals’ payer contracts to obtain higher reimbursement rates, according to the report.

Meanwhile, more hospitals are building out their internal teams that manage ASCs. Only 16% contracted with outside management companies in 2020, down from 44% in 2018.

For the latest news and updates, follow us and if you like our efforts, consider sharing this story with your friends, this will encourage us to bring more exciting updates for you.


Leave a comment