ASC Industry Awareness
Outpatient Cases Grow as Inpatient Cases Decline
New surgery centers of a variety of stripes, specialties, and ownership structures pop up monthly. Many of these new centers are due to the direct addition of inpatient cases as outpatient cases wane. Orthopedic ASCs alone grew by a composite fifty from 2018-2023. USOP and Mid-State Orthopaedic broke ground on their Advanced ASC in Alexandria, Louisiana as did TriasMD, on its latest iteration of high-tech DISC Surgery Centers, this one in California’s San Fernando Valley. In an earlier trailblazing move in January, the very first specialized vascular center in the state of Tennessee announced its grand opening in Lenoir City.
ASC Challenges and Responses
Running an ASC is not all unicorns and rainbows. Stagnating reimbursement rates, rising operational costs, workforce shortages, regulatory barriers, and the widespread anesthesia conundrum are all challenges detailed by ASC leaders. Thirty-six leaders address ways they are stepping up to their varied anesthesia shortage, supply/demand, and incentive issues. An emerging wave of practice financing models is seeking to balance out ASCs’ challenges of retaining autonomy while securing a financial future. ASC leaders are working through the best use of all the technologies now available for running efficient, effective healthcare businesses: data analytics, EHRs, and robotic surgeries. Nevertheless, ASCs are a growing, resilient force due to their cost-consciousness and flexibility.
Healthcare Industry/Trends
Inquiry into UHC Medicare Billing Practices
In late February, Senator Chuck Grassley (R-IA) launched an inquiry into UHC Medicare billing practices, citing potential waste, abuse, and fraud. Concurrently, the US Department of Justice (DoJ) started an investigation into the same UHC billing practices in an attempt to determine compliance or lack thereof. Shares of UnitedHealth fell 9.3% the day following the DoJ announcement as UHC officials pushed back against the report (shares have since climbed back). DoJ probes do not normally rattle investors, so it seems the incessant drip of negative headlines for insurers is getting harder to ignore and more difficult to price in.
Hospital Closure Rates, Jobs, and Margins
Hospital margins are moving in the right direction, having reached a one-year high, but margins are advancing slowly. Thirty-seven percent of hospitals are now losing money, compared with 40% in 2024, in what remains a very challenging financial environment. Successful hospitals tend to have a sophistication in their management of shared service costs. 10 US hospitals have closed thus far in 2025, following 25 closures in 2024 – cybersecurity issues, supply chain disruptors, and prior authorization requirements are all pressure points. Hospitals are really a story of the haves and have-nots. The top 20 health systems have 12,000 open jobs and the struggling systems on the other end are closing or significantly cutting jobs.
Healthcare M&A, Valuation, Revenue Cycle
US Spine and Several Centers and Systems Shift Owners
Viscogliosi Brothers has acquired US Spine Business from Stryker, creating VB Spine, LLC. Stryker remains committed to the spine space, through this partnership and in other aspects of its business. VB Spine will have exclusive access to Mako Spine for use with its implants. Indiana Hand to Shoulder Center is now an OrthoIndy practice doing surgeries at OrthoIndy Centers. In a cross-state effort, Beacon Health in Northern Indiana has signed an agreement to acquire the Ascension Health System in Southwest Michigan. Jacksonville Orthopedic Institute will lay off 150 employees and shut six clinics as it exercises a buyback from Jacksonville Baptist Health to operate the remaining locations independently.
Out-of-Network Watch
In or Out Season
Springtime always arrives bearing expectations. In healthcare, that expectation is for a successful commercial insurance contract season. After an arduous eight-month impasse, UF Health Flagler and Aetna settled on insurance reimbursements, though Flagler is still awaiting a contract with UHC after a seven-month negotiation. As their March 31 deadline loomed, MU Health (Missouri), looked unlikely to cover their proverbial over-under with Anthem … and that remained the case after the deadline passed, so they are out-of-network. Conversely, Bon Secours also looked unlikely to score a contract with Cigna, so unlikely in fact, their new out-of-network status was reported but then rescinded after the deadline last week, enabling Bon Secours’ eight Virginia hospitals to go back in-network.
Healthcare Digital Transformation Watch
Healthcare’s Strained Relationship with AI
Only 18% of healthcare organizations are ready for AI due to infrastructure limitations even though healthcare leaders want healthy, symbiotic relationships with their tech vendors in order to decrease tech risks. The philosophical question, how can AI make healthcare human again, is a real one too … will healthcare apply AI so administrative burdens are reduced and personalized patient care is more of a reality? AI is being used to train medical billing processes too, resulting in better accuracy, efficiency, and faster processing. However, automated algorithms powered by AI to deny claims and to reject appeals can also be prone to incredibly high error rates. The practice of AI in claims denial is contested vigorously.
Legal
Data Breaches and Steps to Avoid Them
From the office of Jon Sistare, JD, Attorney at Law
The healthcare industry has been the subject of more class action lawsuits regarding data breaches than any other industry in recent years. To date, there is no commonly recognized theory of liability to hold healthcare organizations accountable for stolen or jeopardized personal healthcare information. An often-used theory of liability has been the common law of negligence. To reduce or even avoid a claim of negligence, take these steps:
- Back up all electronic data to a secured backup location. A healthcare organization with a secured, isolated backup at a remote location can restore its computer systems in hours. Once a computer is infected with ransomware, the virus can move between computers using the same network, which is why it is imperative to store backup data outside of the original network to ensure that it would not be exposed to the virus.
- Limit access to staff members who require access to the organization’s shared network to perform their tasks; therefore, access to the network can be limited based on priority.
- One of the simplest preventive steps a healthcare organization can take to defend itself from ransomware attacks is to inform its personnel of the risk posed by ransomware, common methods by which the virus is used to infect computers, and actions to avoid while using a healthcare server – such as clicking on advertisements, browsing unnecessary websites, or opening e-mails that seem in any way suspicious.
- Other, more common methods of defending computer systems include setting up firewalls that block unknown IP addresses and ensuring that anti-virus and anti-malware settings are set to scan for threats.
- HIPAA’s numerous provisions can aid a healthcare organization in protecting itself from ransomware and all other cyberattacks.
- HIPAA’s SecurityRule requires organizations covered by the law to implement a risk assessment plan and to minimize actively the cybersecurity risks identified in the plan.
- The SecurityRule also requires covered organizations to train personnel who have access to electronic protected health information and to designate a security official in charge of managing access to electronic protected health information.
- Furthermore, the SecurityRule requires covered organizations to impose access controls regarding which employees may access this information.
At a Glance
US News Releases Second Annual Best ASCs Rating
Evaluated Outcomes for 4,357 ASCs in Four Specialties
UHC Frustrated by National Claim Denials Attention
Makes Aggressive Moves to Protect Corporate Image
California Healthcare Proposal Named after Luigi Mangione
Many Question the Stunt of Naming the Initiative
Healthcare Third Most-Cyber-Targeted Industry
Physicians’ Offices and Hospitals Make up Greatest Number of Victims
Flexi-Roles Strategy for Retiring Physicians
A Win-Win for Hospitals with Tight Margins and Doctors Wanting Balance
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