ASC Industry Awareness
ASC Volume and Quality
In a healthcare addendum to the popular proverb, “If you want something done, ask a busy person to do it,” new research indicates that if you want excellent surgical outcomes, ask a busy ASC. New research suggests that as it is in hospitals, higher volume tends to be a predictor of better surgical outcomes in ASCs. However, hospitals do not lead to better surgical outcomes than ASCs. Hospitals just cost more. Compensation for ASC leaders has risen slightly post-pandemic with rising volume. Post-pandemic staff and provider shortages, prior authorizations, getting up to speed with technology shifts, and supply chain issues are all ASC challenges as volume rises.
ASCs Growth in Type
In our market newsletters, we focus most heavily on the physician-owned ASC world with stories like OrthoIndy opening a new surgical facility in Westfield, IN. Even though freestanding ASCs still make up 68% of the market, hospitals and health systems are also getting in on the ASC development action. In 2023, health systems opened at least 55 ASCs. This year, UChicago welcomed patients to its new multi-specialty care facility in Crown Point, IN. The University of Kentucky has broken ground on a new comprehensive spine and cancer center including an ASC near its Lexington, KY campus. The city of Jacksonville, FL is currently reviewing Baptist Medical Center engineering plans to build a new center with an ASC in one of the last remaining undeveloped sites in Duval County.
Healthcare Industry/Trends
Providers and Payers in Conflict
In addition to the challenges of contracting and NSA implementation (see Out-of-Network Watch on the next page), step therapy is playing out as yet another area where care versus money conflicts are spilling over. The relative size of major insurers as over against provider groups has also added to the conflict, pushing the majors into potential “too big to fail” status. Denials are a major point of contention. Bristol Health CEO is done playing nice with Medicare Advantage denials and delays and is advocating for reform. A former insurance doctor is going on record saying the payer pressured her to review and deny too quickly and then threatened to fire her. However, in a reversal of the norm, an insurer is testing increasing reimbursements for select independent practices in Massachusetts.
Variety of Recent Federal Government Actions in Healthcare
Lawmakers have introduced a bill to expand the CMS waiver for 322 hospital-at-home programs through 2027. CMS has set new staffing mandates for nursing homes that four of five centers do not currently meet, during a continued challenging time for staffing. Senator Amy Klobuchar (D-MN) is urging the Department of Justice to investigate algorithmic pricing tools resulting in anticompetitive conduct by MultiPlan. Senator Bernie Sanders (D-VT) and colleagues have introduced legislation to eliminate medical debt for millions of working class Americans. The plan would nix $220 billion in medical debt through an HHS grant program and limit the potential for Americans to incur future medical debt.
Healthcare M&A, Valuation, Revenue Cycle
Cost of Healthcare Mergers and Private Equity
The net effect of megamergers in healthcare is minimal in terms of quality but rather large in terms of cost increases. Unchecked mergers, apparently, are a piece of the cost puzzle, though higher cost is an inherent market outcome when large players dominate. Clearly, larger group investment in healthcare changes the local caregiving calculous as corporate healthcare entities and high deductibles combine to push patient upfront pay, driving up total costs for consumers. Private equity in healthcare has been making a huge splash over the past five years and the true cost of those investments over the long haul are now in question. Private equity healthcare bankruptcies are on the rise as one in five 2023 healthcare bankruptcies were owned by PE firms. PE money is flighty as half of PE-owned practices resold within three years.
Out-of-Network Watch
Congress Taking Up Provider Concerns with Implementation
No Surprises Act (NSA) implementation is still fluid, even after over two years in effect. Initially, the NSA appeared to be laid out favorably for providers. A Brookings study looking at first outcomes under the NSA arbitration process found average reimbursements were reasonably close to reimbursements providers sought. Two main challenges have appeared since for providers – the high cost of accessing arbitration and insurers driving qualifying payment amounts below market rates. Providers’ groups began to report insurance companies’ forcing lower reimbursements. This March, 39 members of the U.S. House of Representatives began urging federal agencies for provider-friendly reforms to the dispute process.
Healthcare Digital Transformation Watch
Healthcare Cybersecurity in Focus
The Change Healthcare (UHC) data breach will exceed $1 billion in costs, forcing doctors to tap into personal savings to pay for costs before obtaining late reimbursements. Stolen credentials and lack of multifactor authentication unlocked and eased access for the threat actors. Healthcare is a rich target due to the value of protected health information. In separate healthcare cybersecurity news, the U.S. Department of Justice has charged a Russian national with developing and operating Lockbit ransomware, which was deployed against hospitals, schools, and US infrastructure. Protecting practices and healthcare businesses against cybersecurity risk in the age of generative AI is vital to operational health.
Legal
Concerning Non-Competes
From the office of Jon Sistare, JD, Attorney at Law
On April 23, 2024, the Federal Trade Commission (FTC) approved a final rule banning most forms of non-compete clauses with workers. A non-compete clause generally prevents a worker from getting a different job or starting a new business that competes with the employer after the conclusion of their current employment. The rule will become effective 120 days after it is published in the Federal Register, although current and anticipated future litigation could delay or ultimately prevent its enforcement.
There are many defined terms and carve outs included in the rule which any health care employer needs to know. Due to the likelihood of delays in the implementation of this new rule due to litigation, employers can take the following steps to prepare for the rule’s impact, should it come to pass.
Actions to take now:
- Determine which existing non-competes are with Senior Executives. These non-competes will not be impacted by the Final Rule becoming effective.
- With regard to Senior Executives that are not currently subject to non-competes, consider strategies for entering into non-competes with these individuals.
- Tax Exempt Entities should evaluate whether they fall within the FTC’s jurisdiction, in which case the non-compete ban requirements will apply to them.
It is important that healthcare employers understand this rule and its potential impact on their businesses. Ensure that you and your practice are well prepared when this rule does take effect.
At a Glance
Believe It or Not, Like It or Not, Optum (UHC) Has a Bank Too
Ten Things to Know about Optum Bank
Medicare Funding Will Last Six Years Longer than Previously Expected
Medicare Funding to Last to 2036
In 2023, Two Percent of All U.S. Prescriptions Came from Illegal Online Pharmacies
Totaling 100 Million Scripts
Walmart Health Locations and Virtual Care Experiment Are Closing
Why Hospital Executives Think That Is
Do You Ever Feel Lost in the Sea of Health Plan Acronyms?
What Do Health Plan Acronyms Mean?
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