Can Ambulatory Surgical Centers Still Be A Good Investment?

Bradly Bussewitz DPM

Ambulatory surgical centers can still be profitable. In some areas of the country, the rate of return is better than for most other investment opportunities. The potential exists to generate one's own business and recoup more of the money that reimbursement cuts have taken.

The availability to join ambulatory surgery centers may soon be coming to an end although this is speculation. There is a risk of future legislation limiting the ability of the surgeon to become involved in ambulatory surgical center ownership. One example of this type of trend is the recent limiting of physician-owned hospitals, once a profitable opportunity.

There is a finite amount of funding available in healthcare and as reimbursement continues to dwindle, the per-unit (patient) revenue will decline and outside sources of income may be a necessary way to maintain financial independence.

As healthcare systems and insurers look for methods to cut costs, an ambulatory surgical center has innate benefits. In comparison to hospitals, these centers are reimbursed substantially less for the same service. This allows a net savings for parallel services and it is foreseeable that the insurers will prefer surgical treatment at ambulatory surgical centers facilities versus hospitals. This may also fuel the accountable care organizations to mandate ambulatory surgical center treatment when safe and available. In turn, this would push more patient numbers to the ambulatory surgical centers over time as accountable care organizations become more common.

There are potential advantages to the healthcare system should surgeons perform more cases at ambulatory surgical centers. Routinely, ambulatory centers show a lower infection rate than hospitals. Lower rates of infection equate to long-term savings and will drive more surgeries to ambulatory surgical centers as insurers look for savings. The centers also tend to be more efficient, decreasing overhead by not paying staff to “stand around” and wait. This efficiency also allows the surgeon to perform a higher case volume as well.

For the surgeon who invests in local ambulatory surgical centers, the benefits can be more than financial. These centers allow surgeons more control than they may have in their local hospitals. There is more potential for change and improvement, and the staff is generally pleasant to work alongside as the surgeon is also the boss. In contrast, in the hospital, the staff works for the hospital, not the surgeon. That all equates to a happier surgery day for us, the surgeons.

An additional benefit of an ambulatory surgical center is the facility administration is typically readily available to address surgeon concerns. We can adapt technology acquisition and idea innovation more rapidly at an ambulatory surgical center than a hospital. The center can also bring multiple specialties together under one roof with a similar surgical focus and can generate referrals and improved patient care.

Consider, however, that not all ambulatory surgical centers are profitable. Roughly one-third are profitable, one-third are treading water and one-third are losing money and risk hospital or management company buyout. The state and local climate can determine ambulatory surgical center success. Some states require a certificate of need to build an ambulatory center, thus limiting competition and increasing the likelihood of profitability for existing centers. Another negative in the current healthcare climate is the continuing trend of hospitals buying private practices, resulting in a potential decrease in the number of private practice surgeons allowed to participate in an ambulatory surgical center.

When considering whether to join ownership in an ambulatory surgical center, consider the net income of the center and the recent trend of the center. Also consider the trend in local payer mix as well the mix of specialties at the center. If you are the only surgeon working on bone, you may not have the opportunities for all the equipment you desire. However, the more multispecialty the center, the more stable the revenue may be over time as reimbursement changes within each particular specialty.

Investing in an ambulatory surgical center may be a way to improve one’s revenue and one should examine each regional opportunity prior to investing. The center can improve a surgeon’s efficiency, allowing a higher case volume. The center can be a pleasant place to work, leading to a happier life. As the climate of healthcare and reimbursement evolves over the coming years, the role of the ambulatory surgical center is likely to expand as finding ways to save valuable healthcare dollars becomes ever more critical.

Comments

I am an investor at an ambulatory surgery center (ASC) and it has been good for my practice on several levels.

1. The return has been an extra source of income.
2. Interaction with other specialists leading to referrals.
3. Showing other specialists our surgical skills and that our profession performs complex surgical cases.

Podiatry and ASCs are a great match as many of our cases are quick and low risk. Not sure where ASCs are heading with the health care reform but for now, it is working well for the surgeons and patients.

Nice article.

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