As healthcare organizations continue to view investment in ambulatory surgery centers (ASCs) as a strategic move, it is important to understand the potential for profitability. With the shift in surgical procedures from inpatient to outpatient settings, ASCs are becoming increasingly popular. This article will explore the potential for profitability in ASCs, as well as provide ideas for incorporating into ASC planning to take advantage of potential increasing levels of business on the horizon. The Centers for Medicare and Medicaid Services (CMS) have approved 12 new cardiovascular procedures this year, and are continuing to incentivize the shift in surgical procedures from inpatient to outpatient settings.
This means that by 2030, it is estimated that 90% of all surgeries completed in the United States will be performed on an outpatient basis. Hospitals have tried to isolate themselves from this trend by focusing on high-income procedures that can only be performed in an inpatient operating room. However, this favorable wage differential is steadily shrinking as CMS moves toward reimbursement structures that support site neutrality. Health systems must incorporate a robust outpatient surgery strategy or see their profit margins diminish.
When planning an ASC, it is important to consider future flexibility to achieve additional growth. This includes easy access for later additions of electric and medical gas, as well as updating interior finishes regularly to remain competitive with newer ASCs. When it comes to valuing an ASC, if the facility does not generate a reasonable profit, then the value of the facility will likely be determined based on replacement costs. If you sell to a minority interest, surgeons using the center, or a smaller company, your center will normally only be valued between three and five times EBITDA.
Ambulatory surgery is becoming increasingly possible due to advances in surgical techniques, sedation, and postoperative pain management, making it more accessible and convenient for patients. On the ophthalmology side, most surgery centers are quite cost-effective just because they perform such a high volume of surgeries and have a long history of having outpatient centers. When considering investing in an ASC, there are some variables used to set a fair price. These include the types of procedures offered at the center, its complexity, and its ability to generate reasonable profits.
There are also cases that can be done in a center that should not be done in a center.