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00:00:01
Erica Palmer – 10 News Stories Shaping the ASC Industry
131 Plays1 year ago
As we reach the midpoint of 2023, it's the perfect time for us to reflect on the year so far and anticipate what lies ahead in the second half. In this episode, we will dive into ten noteworthy news stories that have been making waves in the ever-evolving surgery center industry. Here’s what to expect:
Top 25 healthcare companies: Fortune 500: UnitedHealth Group tops the Fortune 500 list with $324 billion in revenue for 2022. Other familiar faces help to round out the top 25.
New York extends Medicaid, CHIP postpartum coverage: What does this mean for the country’s healthcare spending and the growing pressure on Medicaid?
Improve Patient Safety with Clinical Technology: ASCs that are investing in clinical technology are seeing increased patient satisfaction scores and patient safety rates.
Where 5 major ASC chains are focused in 2023: What do USPI, SCA, HCA, Surgery Partners, and ValueHealth have planned?
5 highest-paying physician specialties in the last 5 years: Which physician specialties paid the most in the last five years? Hint: the specialty that paid the most in 2018 and 2023 is the same.
3 Quick Tips to Easily Strengthen Your Patient Relationship: Building the patient-provider relationship will be key to your ASC’s long-term success (and ability to collect).
Selling your ASC? 3 steps to improve valuation: ASC management groups, health systems, and private equity firms are planning aggressive ASC expansion strategies. Make sure you sell for top dollar.
AMA takes on AI, Medicare payment at annual meeting: The American Medical Association’s annual meeting took place two weeks ago in Chicago. Here are three of the highlights.
Cybersecurity Incidents: The Hidden ASC Operating Expense: By the end of 2023, it is projected that the total global cost of Cybercrime will reach $8 trillion. Here’s how to prepare.
North Carolina woman becomes a mom and doctor in the span of 24 hours: A woman from North Carolina became a mom and a doctor in the span of 24 hours. Congrats, Dr. Bailiff!
Brought to you by HST Pathways.
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Transcript
Introduction and Format Change
00:00:01
Speaker
Welcome to This Week in Surgery Centers. If you're in the ASC industry, then you're in the right place. Every week, we'll start the episode off by sharing an interesting conversation we had with our featured guests, and then we'll close the episode by recapping the latest news impacting surgery centers. We're excited to share with you what we have, so let's get started and see what the industry's been up to.
00:00:27
Speaker
Hi, everyone. Here's what you can expect on today's episode. We're going to do things a little bit differently today than we usually do.
ASC Industry Trends Overview
00:00:35
Speaker
Instead of having our guest segment and then ending with a news recap, we're going to spend our time going through 10 news stories that are shaping
00:00:42
Speaker
the ASC industry. We'll cover mergers and acquisitions, Medicaid, clinical technology, where five major ASC chains are focusing their efforts this year, the country's spending projections, cybersecurity, and more. And we'll bounce between industry trends, clinical trends, articles that look back at 2023, and articles that look ahead to the second half of the year. Hope everyone enjoys the episode, and here's what's going on this week in Surgery Centers.
Top Healthcare Companies Discussion
00:01:15
Speaker
As always, it has been a busy week in healthcare, so let's jump right in to the top 10 stories that are shaping the ASC industry right now. On June 5th, Fortune 500 released its annual report, ranking the largest corporations in the United States by revenue based on 2022 numbers. So here's a quick rundown of the top 10 healthcare companies in order, starting with the largest, and then I added in two additional callouts at the end for some familiar faces.
00:01:44
Speaker
So the top 10 are the United Health Group with $324 billion. Then we have CVS Health, McKesson, Amerisource, Bergen, Cardinal Health, Cigna, Elevance Health, Centene, Pfizer, and Johnson & Johnson rounds us out at the top 10.
00:02:05
Speaker
HCA Healthcare took the 12th spot with $60.23 billion and Tenet Healthcare took the 24th spot with $19.17 billion. Now remember those because I will be referencing them in some of the later news stories. So I always find lists like this interesting because it tells us who the big players are and some companies to keep an eye on.
Medicaid Expansion in NY: Impact on Maternal Health
00:02:32
Speaker
On Tuesday, New York became the 35th state to extend healthcare coverage after pregnancy, allowing up to 26,000 additional New Yorkers to be eligible to receive Medicaid and Children's Health Insurance Program benefits for a full year following pregnancy.
00:02:51
Speaker
Previously, people were guaranteed only 60 days of coverage postpartum, but now it will be 12 months. And for context, Medicaid currently covers more than 40% of births nationwide. And if this was rolled out to every state, as many as 720,000 Americans would be covered.
00:03:10
Speaker
So why is this important? Pregnancy-related deaths have increased in the US in recent years with 1,205 women in 2021, unfortunately passing away of maternal causes. And that was up from 861 in 2020. And then between 2017 and 2019, 30% of those deaths actually occurred when coverage would have lapsed for Medicaid enrollees.
00:03:37
Speaker
So this is a significant milestone for improving maternal health outcomes and ensuring the safety of mothers and their children under the age of one. And I share this story because while I think this is wonderful and truly saves lives, the United States is on track to be spending more than $7 trillion on healthcare by 2031.
00:03:58
Speaker
So again, I think this is a wonderful program and a much needed extension, but looking at the country's overall spend, it's significant to say the least.
Advancements in Clinical Technology
00:04:10
Speaker
In our third story, ASCs are investing in clinical technology, are seeing increased patient satisfaction scores and patient safety rates. According to Patricia McKenna, the administrator at Cataract and Laser Center West in West Springfield, Massachusetts,
00:04:28
Speaker
She says, these solutions empower our staff to provide our patients with the safest, best surgical experience possible. We talk about it every week. Technology needs to be at the core of your daily workflows in order to achieve the best possible results all around at your surgery center. This article does a wonderful job of laying out specific clinical technologies that can help improve patient safety. And here's just a few that the article shared.
00:04:56
Speaker
The first is supplemental disinfection. So things like electrostatic sprayers and UV lights can help kill pathogens and decrease surgical site infections when used in procedural and operating rooms. Now there were some gotchas with the UV lights, so definitely check out the article to see what the people using them have shared. And we'll of course include all of the links in the episode show notes as well.
00:05:22
Speaker
The second is HVAC monitoring systems. They can automatically check the temperature and humidity levels in operating rooms, in sterile storage rooms, and send alerts via email or an app if they dip to certain levels. So you don't have to manually document these data points once a day and be manually checking the temperature and humidity.
00:05:43
Speaker
And then same for refrigerator monitoring systems. If the temp of your fridge leaves a safe range, you can receive an email notification, which obviously will help you avoid using any meds that might have their safety compromise and also just get ahead of any outages or broken equipment, things like that. Other examples they shared, vein finders, barcode scanners, customizable emergency call systems, pulse oximeters, robots, and so much more.
00:06:12
Speaker
I also would love to hear your thoughts and experiences on different technology that has helped you improve patient safety and satisfaction or really improve it all. So if you head over to HST's LinkedIn page, please leave a comment on this video so we can learn about what you're doing.
ASC Chain Strategies for 2023
00:06:30
Speaker
All right, story four, you already know the five major ASC chains. We have USPI, SCA, HCA, surgery partners, and value health. But sometimes it's hard to know what their plans are and where they're headed next. So luckily Becker's ASC summed it up nicely for us. Starting with USPI, who is owned by Tenant Healthcare and who is also 24th on the Forbes list I previously mentioned.
00:06:59
Speaker
They plan to commit $250 million into ASC mergers and acquisitions and plan to have more than 600 ASCs by 2025. For context, they're at $445 right now.
00:07:14
Speaker
The next is SCA who's owned by Optum. They plan to take a different route. They plan to focus on physician group acquisition and continue their reign as the largest employer of physicians in the country. They currently own 320 ASCs and employ 70,000 physicians. The third is HCA. They have 150 ASCs and plan to double down on developing outpatient facilities and increasing outpatient procedure migration.
00:07:46
Speaker
The fourth is Surgery Partners. Now they spent almost $250 million on ASC acquisitions in 2022 and actually started 2023 off with $828 million in liquidity. And they plan to focus on high acuity orthopedic and cardiology procedures.
00:08:05
Speaker
And last, but certainly not least is value health. They currently have about 50 ASCs and they plan to capitalize on cardiologies, migration to outpatient settings, as well as continuing to lean into value-based care models. The last number I saw was a few months back.
00:08:23
Speaker
Maybe longer, so this could have changed, but it said something like 70% of surgery centers in the country remained independent. So it will certainly be interesting in the next year or two with all of these aggressive acquisition plans to see how that percentage changes. The next story is a very quick one, but I always find this data really interesting.
Top Paying Physician Specialties
00:08:43
Speaker
If you can't tell, I love lists. So here are the five highest paying physician specialties from 2022.
00:08:51
Speaker
The number one is plastic surgery. Number two is orthopedics. Number three is cardiology. Number four is ENT. And number five is urology. And actually, if we go back to 2018, number one, two, and three remain the same. Plastic, ortho, and cardiology. But number four was gastroenterology and number five was radiology.
00:09:19
Speaker
So I guess if you're wondering where the money is, this should give you a pretty good idea. Plastic was either number one or number two for the last five years and is projected to remain on top in the coming years as well.
00:09:32
Speaker
So those are the five highest paying physician specialties in the last couple of years.
Enhancing Patient Relationships
00:09:36
Speaker
All right, switching gears to patients. So building a strong relationship with patients is undeniably important. The stronger their relationship, the more likely the patient is going to be invested in their own healthcare journey, more likely to trust you, pay their bills, show up to procedures, follow post-op instructions, and so on.
00:09:58
Speaker
This article is written by Veronica Penoyer from HSC Pathways, and she's sharing three ways that ACs can improve their patient relationship in 2023 and beyond. The first is to provide personable communication. At some point in your life, you either have been or will be on the patient side of things.
00:10:17
Speaker
Being personable and relatable improves the trust in your relationship with your patients and encourages your patient to be truthful when discussing their health history, which we know can be an issue sometimes, especially if they feel they're going to be judged or they're going to be embarrassed. Sometimes they'll leave stuff out, but we all know by leaving stuff out, it can cause serious harm to them, serious implications. Being personable and relating to them is key.
00:10:44
Speaker
The second is to embrace new communication channels. So mail, email, phone calls, they have been useful in the past and definitely more traditional path of communication, but you absolutely need to lean into patient texting, or at the very least,
00:11:01
Speaker
you may find it beneficial to ask your patient, how do you prefer to be contacted? That's putting the ball in their court and also showing them that you care about how they prefer to be contacted and how they prefer to be engaged with. And giving them options is obviously the best way to ensure engagement and build that relationship and improve the odds they're going to respond.
00:11:23
Speaker
And lastly, be transparent and remain open, honest, and helpful. So patients want to know as much as possible, as early as possible. What is my financial responsibility? Can I eat before my procedure? What preparations do I need to make? Do I need a ride home? What is post-op going to look like? So those three things, personal communication, embracing different means of communication, and being transparent
00:11:47
Speaker
will help you connect with your patients, which will be crucial to your continued success. They're going to recommend their family members to you, their friends. If they overhear their local colleagues talking about needing a procedure done, they want to share your surgery center's information with them. So give them a reason to. And by building that strong relationship with them, they absolutely will. All right, going back to the idea of mergers, acquisitions, partnerships, things like that.
Optimizing ASC Valuation
00:12:17
Speaker
As ASE management companies, health systems, private equity firms, etc. are working on robust and aggressive ASE expansion strategies, the demand for ASE acquisitions is only going to grow. We are constantly
00:12:33
Speaker
seeing new stories about ASCs that are selling for 3.7 million, 5.5 million, and more. We actually just did a whole episode on strategic partnerships, so I recommend checking that out if you're interested in learning more about your options. But for this story, Becker's ASC is sharing three steps to improve your ASC's valuation as shared by ECG management consultants.
00:12:58
Speaker
So I should say the article is extensive. And again, if you're interested in this world or if you're interested in selling or just checking out your options, please go to episode notes, find the link, read this full article. I'm going to do a very high level summary, but there's so much good information in here. So the first is to optimize your managed care plan. This will drop top line revenue, your profit margins, and an increased enterprise value.
00:13:26
Speaker
The second is kind of a no brainer, but improve financial performance, especially with an efficient business office. So you'll want to make sure you're tracking against all of your financial goals. A few examples being days and accounts receivable are over 90 days, bad debt, outstanding denial rates. You're going to have to show all of these numbers kind of to show improvement and going back to transparency. You're absolutely going to have to show everything that you can about your financial performance.
00:13:57
Speaker
And then lastly, understand key transaction considerations. Questions like, is your buyer in this for the long haul or are they just looking for a quick flip? Do you understand the fair market value? Do you have stable, efficient performance over at least 12 to 24 months? Those are the things that you need
00:14:15
Speaker
to ask yourselves, ask your partner, and make sure that your goal is aligned. So whatever you're looking to get out of selling or being acquired or finding a partner, whatever it might be, you need to make sure the person that you're selling to have the exact same end goals that you do. So again, so much of these stories has to do with
00:14:35
Speaker
mergers, acquisitions, trends, you know, going back to the five major ASC chains and what their intentions are. If you want to sell, understanding how to improve your valuation will be key because it looks like they have the budget to buy. So if you're in the market to sell, it might be a really good time to lean in.
AI and DEI in Healthcare
00:14:56
Speaker
In our eighth story, the American Medical Association's annual meeting took place last week in Chicago. Here are three of the highlights that will impact the future of healthcare.
00:15:08
Speaker
So, you know, we couldn't go an entire episode without talking about AI. But first, the AMA did provide recommendations for right now on what AI's role in healthcare could be. So they actually used the term augmented intelligence, not artificial intelligence, with an attempt to emphasize the technology's ability to enhance human capabilities rather than replace them.
00:15:32
Speaker
They shared that AI has the potential to reduce administrative burdens on physicians and help them save time on documentation. However, as we know, concerns have been raised about issues like bias and of course, inaccuracy.
00:15:47
Speaker
They also advocated for greater regulatory oversight of insurers use of AI in the prior authorization process. We've talked about prior auth a bunch and how limiting it can be, how frustrating it could be. Is it necessary? To what extent?
00:16:03
Speaker
So, they're emphasizing the need for clinical criteria and involvement of healthcare professionals in decision-making. The future direction and regulatory framework for AI in medicine, of course, remains uncertain. But if you think about it from an administrative perspective, it absolutely has benefits.
00:16:22
Speaker
The second thing that came out of the conference that they wanted to share was about substance use and overdose prevention. The AMA shared that they are adopting a number of policies on treating substance use disorder and preventing overdoses, including encouraging states and local governments to make opioid overdose reversal medications available in schools.
00:16:44
Speaker
In addition, as more researchers examine using psychedelic drugs to treat conditions like severe depression, the AMA adopted a policy to advocate against using psilocybin to treat disorders unless they've been approved by the FDA or used in clinical studies. Oregon has been really progressive in this realm, so if you're interested in learning more, I would check out what Oregon has been up to.
00:17:11
Speaker
And then third, two policy changes that would impact the workforce. So the AMA opposed legacy preferences in medical school admissions and adopted changes to note the importance of diversity, equity, and inclusion initiatives in training for healthcare workers.
00:17:30
Speaker
Two episodes ago we did, or was that last episode? Very recently we did the ASCA 2023 recap episode and there were similar trends in terms of the diversity, equity, inclusion, and building a diverse culture at your facility.
00:17:45
Speaker
Another policy aimed at the physician workforce included opposing non-compete contracts, as earlier this year, the Biden administration proposed a rule that would ban non-compete clauses in employment contracts, freeing up physicians to work for a competitor, which, I mean, given all the staffing issues that we're experiencing right now, seems like we're heading in the right direction there.
00:18:09
Speaker
So there's a ton that came out of this conference last week. Those were just three highlights to recap the AI's role in healthcare, substance use and overdose prevention, and then trying to enact policy changes that would positively impact the workforce.
00:18:24
Speaker
All right, homestretch, we are in our ninth story.
Strengthening Cybersecurity in ASCs
00:18:27
Speaker
Cybersecurity attacks are only going to increase, so cybersecurity measures must increase in tandem. To start us off, I just want to give a few numbers to set the scene. In 2022, the average cost of a data breach was $4.35 million, which was actually a 2.6% increase from 2021.
00:18:51
Speaker
In 2022, the healthcare industry reported 849 business impacting security incidents, 571 resulting in data disclosure. And 86% of organizations often deal with more than one data breach. And by the end of 2023, it is projected that the total global cost of cybercrime will reach $8 trillion.
00:19:16
Speaker
So in this article written by Richard Lang, HSC Pathways Information Security Officer, a cybersecurity breach is often the hidden ASC operating expense. So you might look at the upfront costs of having really strict cybersecurity software and measures at your surgery center and may be hesitant, but here are some of the costs you may not be considering if you do experience a data breach that may change your opinion about that upfront cost.
00:19:45
Speaker
So third party incident response fees range from $30,000 to $150,000. You will experience lost revenue from system downtime, canceled and rescheduled surgeries.
00:19:59
Speaker
We will likely have to pay identity theft and monitoring costs for impacting patients. You'll need to rebuild and restore damaged systems. You'll incur legal fees with an increased insurance premiums. And then of course you'll lose patients who choose to take their business to one of your competitors because
00:20:18
Speaker
The media, the news loves this type of stuff, unfortunately. If you actually go to Becker's ASC and look at their most read articles, it's always the cybersecurity breaches, the doctors being sued. Fortunately, there's an element of that that is just human nature. But if you do suffer a breach, your community will find out about it, which obviously will impact your reputation and therefore your case volume.
00:20:42
Speaker
So the trend here is unfortunately cybersecurity attacks are increasing, but the good news is that as they increase, our measures can increase as well to keep ourselves and your patients protected.
Conclusion: Personal Story and Podcast Closing
00:20:57
Speaker
And to end our new segment on a positive note, a woman from North Carolina became a mom and a doctor in the span of 24 hours. On May 3rd, Abby Bailiff gave birth to her first child, Bodhi. And on May 4th, just the next day, she graduated from UNC Greensboro School of Nursing with her doctorate degree. So she was due a week before graduation.
00:21:23
Speaker
obviously started to get nervous when that day came and went. So on May 2nd, her doctors decided to induce her. She had a safe delivery and was released from the hospital the afternoon of her graduation. And after going back and forth on whether or not to attend the ceremony, Bailiff decided she couldn't miss it. So her husband in Bodhi cheered her on from home watching via FaceTime. So a huge congratulations to you, Dr. Bailiff, on your graduation and new motherhood.
00:21:53
Speaker
And that news story officially wraps up this week's podcast. Thank you as always for spending a few minutes of your week with us. Make sure to subscribe or leave a review on whichever platform you're listening from. I hope you have a great day and we will see you again next week.