ASC Industry Awareness
Celebrating ASCs
August is ASC Month, an opportunity to look back to see the rich (now over 50 year) history of ASCs in the United States, to educate policy and decision makers about ASC quality and affordability, and to look toward future growth. In 2024, ASCs are making strategic investments in staffs, their patient experiences, digital health technology, and capital equipment. ASCs are making solid advances in cardiology despite some payer, specialized staffing, and technology issues. Spinal procedures are another growth opportunity that should continue to take hold in ASCs over the next several years as payer and regulatory procedures catch up to surgery center capability.
Financial Leverage of ASCs
ASCs have long provided safer, more efficient, and more cost-effective care than hospital inpatient or outpatient departments as the average charges for these three procedures continue to attest. ASCs save everyone money … patients, insurers, and the healthcare system. However, ASC leaders want payers to be more receptive to providing better reimbursements so they could care for more patients (and so save more money). Open dialogue with payers about savings, efficiencies, patient outcomes, and reimbursements remains challenging for providers. ASC leaders know they are creating savings for payers, but cannot access payer intel on the exact savings, blunting their true financial leverage.
Healthcare Industry/Trends
Pharmacists and Providers Sue UHC/Change Healthcare
The National Community Pharmacists Association (NCPA) is leading one of many class action lawsuits against UHC/Change Healthcare as it seeks to recover losses incurred in the February 21 Change Healthcare ransomware attack. The NCPA, which represents 19,000 members, and the 39 provider organizations have struggled with revenue generation and reimbursements that have remained below pre-cyberattack levels. At issue are alleged lax security measures at Change/UHC, in addition to providers’ revenue losses, and problems with Change’s large size that created inefficiencies. Plaintiffs allege that Change/UHC shut down their entire system, forcing providers to absorb even more costs.
Shifting in Healthcare Industry
The sand is shifting under the healthcare industry. Hospitals are embracing ASCs in a mad dash for outpatient surgery volume. Even though job cuts in hospitals and insurers are well established, healthcare as a whole has added a net one million jobs since early 2020 and is still seeking thousands more staff. Over 700 rural hospitals (one in three) are at risk of closure. Many of the organizations that have experimented with primary healthcare clinics have reversed course in order to stanch losses, as has Walgreens, whose stock price dropped 80% in the last five years. The nationwide experiment with home care that began in the pandemic is continuing, but faces a potential downturn in December when Medicare will stop paying for at-home care, unless Congress votes for program continuation.
Healthcare M&A, Valuation, Revenue Cycle
Disappointing Performance but for Revamped Tenet
Healthcare M&A is in a bit of a lull – at least by the standards of the last few years. Walgreens is considering offloading all 60 of its VillageMD clinics to cut at least $1 billion in costs. Aetna’s president is out after its CVS division’s disappointing financial performance in the first half of 2024. HCA is having a reversal of fortunes with its 2019 Mission Healthcare purchase. A community coalition in Mission’s Western North Carolina is pushing HCA to sell Mission, to hold HCA accountable for a decline in care and facilities and to replace it with a more responsive nonprofit system. Tenet is bucking the performance trend, emerging from a strategic reordering of its core business away from hospitals toward ASCs, becoming the only major for-profit provider to raise its full-year forecast following Q1 earnings.
Out-of-Network Watch
The Latest on No Surprise Act’s (NSA) Independent Dispute Resolutions (IDR)
On August 2, the 5th Circuit Court of Appeals, upheld a district court decision that instructs arbiters not to prioritize one factor over others in determining payment amounts for out-of-network services when providers and payers disagree about that amount. This is a win for providers since they were at a decided financial disadvantage when arbiters only considered the Qualified Payment Amount (QPA) for each IDR incidence. With this ruling, arbiters will not consider the QPA above other enumerated factors nor will they need to justify departures from the QPA in their decisions. This latest decision curtails federal department authority over arbitration methods not originally envisioned in the NSA.
Healthcare Digital Transformation Watch
Global IT Outage’s Effect on Healthcare
The July 18 CrowdStrike outage, which has been dubbed the largest IT outage in history, was caused by a faulty update to sensor configuration for Windows systems and is expected to cost healthcare $1.9B. Healthcare employed CrowdStrike widely, which accounts for the high level of cost for providers in the US and around the globe. The disruption caused to healthcare systems, EHRs, and health systems’ IT networks are extensive and worse than a cyberattack for some. Healthcare providers are being warned to be vigilant for phishing campaigns on the heels of this IT outage. Healthcare organizations are being challenged to futureproof their IT systems to ensure resilience.
Legal
Healthcare Antitrust Enforcement
From the office of Jon Sistare, JD, Attorney at Law
The Department of Justice (DOJ) and the Federal Trade Commission (FTC) continue to increase antitrust enforcement in the healthcare industry as part of their broader enforcement efforts. The agencies are focusing on aggressive merger enforcement, pursuing novel or less traditional theories of harm, and expanding industry studies. While consistent with President Biden’s 2021 Executive Order on Promoting Competition in the American Economy, the rapidly evolving state of agency guidance and enforcement has created uncertainty among healthcare industry participants about whether business conduct and future deals will pass antitrust scrutiny in the years ahead. Healthcare organizations can expect greater enforcer scrutiny and longer wait times for deal reviews and conduct investigations.
At a Glance
Most Americans Would Welcome Hospital Care at Home
77% Believe People Recover Faster at Home
Mark Cuban’s Big Warning for Self-Insured Employers
Pharmacy Rebates Will Spur Class Action Suits
A Florida Plastic Surgeon Operated on His Wife
Now He Has Been Arrested for Manslaughter
Eleven Arrested at UHC Headquarters in Minnetonka, MN
Protested UHC’s Prior Authorization and Denial Practices
National Healthcare Spending Grows 7.5% to Nearly $4.8T
At 5.6% Growth Nation Will Spend $7.7T by 2032
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