ASC Industry Awareness
ASC Ortho and Spine Growth Forecast
Orthopedics and spinal procedures have been consistently shifting from inpatient hospitals to outpatient surgery centers. An April report from Sg2 forecasts a 12% increase in spine and ortho in ASCs in the next five years and a 22% increase in the next decade. Physician incentives to work in ASCs, appropriate payer reimbursements, and the clinical appropriateness of the procedure are all growth drivers. More complex minimally invasive spine surgeries, new instrumentation, and post-operative pain control all help spinal surgeons lean into more ASC case growth. This uptick in ASC procedures advances safety and efficiency while reducing cost, which is a win-win-win for patients, physicians, and payers.
ASCs by the Numbers
Have you ever been curious about the number of ASCs in your home state? Not all of the ten states with the most ASCs are those with the ten highest populations, though that helps. ASCs under partnership with a national management company have grown by a 3.14% compound annual growth rate over the last dozen years. In the last year, 56% of ASCs have increased their volume, though 68% are having more challenges recruiting experienced operating room nurses as labor costs rise. ASCs continue their torrid pace of opening and expansion, with eight openings in Florida, California, and New York alone so far in 2024.
Healthcare Industry/Trends
Labor and Staffing Issues
Conditions versus compensation was a big contributor for nearly 8,000 US nurses who exited their roles between 2018 and 2021, 40% of those being unplanned retirements. Though job satisfaction is still an issue, the US now has more registered nurses than ever – and they are more heavily degreed. Staffing pressures are easing for US hospitals, enabling a predicted single-digit uptick in hospital-based procedures. Other facets of healthcare labor, however, are not easing. A Michigan senator is scrutinizing emergency department staffing firms and their private equity backers over the effects of staffing decisions on business operations and patient care. Labor costs are challenging hospitals and health systems. Pair labor costs with low reimbursements, which 84% of system leaders cite as a top cause of low margins, and you see why hospitals are pulling back on investments and seeking more sources of revenue.
Reimbursement Challenges Grow for Hospitals
Decreasing reimbursements compound staffing issues by restricting money available for hospitals to work up to capacity. A case in point, Wisconsin hospitals doubled the number of their hospitals operating in the red over the past two years. Gastroenterologists are plagued with a well-known issue of decreasing reimbursements over time for endoscopic procedures. Declining reimbursements pose downstream issues even for some orthopedic practices with the loss of physician independence leading to the loss of physicians and less patient access. Eighty-two percent of health system CFOs also indicate increasing payer denials since pre-pandemic days, further reducing margins.
Healthcare M&A, Valuation, Revenue Cycle
Health Systems Making Deals, PE Rises in Physician Practices
On one day in late March, three major health systems made deals … just one of many hospital and health system ownership juggles in the past few months. Optum has three mergers and acquisitions in the works. Johnson & Johnson extended its position in cardiovascular intervention by acquiring Shockwave Medical for $13.1 billion. Private equity purchases of physician practices skyrocketed 600% from 2012-2021, raising concerns about competition in some markets. However, not all mergers live up to their promise. Walgreens is taking a $5.8 billion hit on its primary care clinic, VillageMD.
Out-of-Network Watch
Which Goals Will No Surprises Meet?
New CMS data shows providers prevailing in 77% of No Surprises Act (NSA) disputes. However, if radiology is any indication, providers are rarely breaking even on NSA disputes once the fees for disputing are considered. In a comparative study from Q1 2019 to Q3 2023, in-network claims grew from 84.1% to 90% of total claims, along with a 2.3% increase in in-network services during the NSA rollout. While the NSA has reduced surprise bills, the law’s arbitration processes seems to be leading to higher bills and premiums in some cases. NSA’s dispute resolution process is patterned off that of Major League Baseball, but therein lies an issue … the order of magnitude of arbitration requests has far outstripped projections.
Healthcare Digital Transformation Watch
Healthcare Data Breaches Warrant Stronger Response
The Change Healthcare (UHC) data breach has put healthcare on notice that it is in threat actors’ crosshairs. UHC advanced over $3.3 billion to affected providers in addition to a $22 million ransom it paid as UHC shares have fallen 6%. A second ransomware group is now reportedly seeking to extort Change Healthcare in a smaller data breach. Another ransomware group claims to have made $3.4 million selling data stolen from a Chicago children’s academic medical center. Healthcare data is valuable on the dark web. Ransomware attacks are evolving due to franchised malware enabling more of it and data being stolen, not just locked up. Healthcare organizations are employing more strategies to prevent and respond to cyberattacks while a former CMS Administrator says it is time to turn front-line healthcare cyber defense over to autonomous systems.
Legal
Cybersecurity Performance Goals for Healthcare
From the office of Jon Sistare, JD, Attorney at Law
On January 24, 2024, the Department of Health and Human Services (DHHS) released voluntary Cybersecurity Performance Goals for the healthcare sector. These goals include 10 “essential” and 10 “enhanced” goals. The health care cybersecurity performance goals directly address common attack vectors against U.S. domestic healthcare providers.
These cybersecurity performance goals are targeted at defending against the most common tactics used by cyber adversaries to attack health care and related third parties, such as exploitation of known technical vulnerabilities, phishing emails and stolen credentials. The DHHS recommends that all components of the health care sector implement these practices including third-party technology providers and business associates.
The goals can be found at https://hphcyber.hhs.gov/performance-goals.html.
At a Glance
First of Their Kind Healthcare-Focused High Schools
Serving 6,000 Students in 10 Communities across US
New Orthopedic MBA Program Begins in May
Grace College Launches Program in Warsaw, IN, an Orthopedic Hub
Medical Credit Cards Can Enable Patients to Finance Care
Finance Expert Warns, They Can Be an Expensive Mistake
Lawsuits Raise Risk for Employers in Healthcare
Innovative Efforts from Employers Benefit American Workers
Be Careful in Choosing a Medicare Advantage Plan
Get to Know the Difference between the Reality and the Marketing
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