Is an ASC joint venture right for your hospital?

Around 80 percent of hospitals are open to partnering with a physician group for an ambulatory surgery center joint venture, said Regent Surgical Health CEO and Founder Tom Mallon.

In a session at the Becker’s Hospital Review 4th Annual Meeting in Chicago on May 10, Mr. Mallon and Regent Surgical Health Chief Development Officer Jeffrey Simmons discussed important considerations for hospitals exploring joint venture ASCs.

Where is the hospital located? Reimbursements for procedures vary from state to state, and Mr. Simmons emphasized the importance of taking local reimbursement structures into consideration.  

Is the local market competitive, with high occupancy rates?
A major factor to consider before entering into a joint partnership is the local market, and whether occupancy rates are expected to remain high. Additionally, an ASC in a steady or shrinking market should be more willing to enter into a joint partnership with a hospital, said Mr. Mallon.

Does the hospital currently enjoy hospital rates and leverage in contracts, and could these rates be extended to the ASC? Many hospitals are large enough and have enough purchasing power to leverage contracts in their favor. A joint venture with an ASC could be very profitable if the hospital’s contracts are able to extend to the ASC, said Mr. Mallon.

Would the hospital embrace a partnership?
“Lot of hospitals don’t have partner mentality,” said Mr. Simmons. Joint ventures often require surrendering control over certain areas to the physician owners. In a model advocated by Mr. Mallon, the physician group would have control over clinical issues, while the hospital partner would have control over budget, overarching strategy and the types of procedures performed at the center.

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