Mr. Searles began the presentation with a general background on outpatient services. Freestanding outpatient healthcare facilities providing same day care have transformed outpatient services by providing a convenient, specialized, low priced alternative for surgery, imaging and other ancillary services. “The proliferation of ASCs and imaging centers began back in the 1970s and now, there are over 5,200 ASCs and 8,000 imaging centers in all 50 states,” said Mr. Searles. This has a dramatic economic impact by creating 200,000 jobs.
Although growth rates have slowed in recent years, the industry is continuing to mature at a modest pace. “The new focus is on quality and cost-savings to drive continued growth,” said Mr. Searles. Similar to hospital acquisitions, economies of scale and market share are becoming increasingly important for ASC and ancillary service acquisitions. In addition, some ancillary businesses are looking for acquisitions, whereas in the past, mergers and acquisitions were fairly infrequent. “The reason is the stagnant pace of reimbursement and growth among imaging centers and ASCs. It makes sense to look for a partner to help you with margins, to help you buy supplies and who gives you greater economies of scale,” said Mr. Searles.
Mr. Searles wrapped up the presentation with thoughts for the future. Since the industry is maturing, providers may continue to seek acquisitions rather than develop new centers from scratch. Market share and economies of scale will continue to be important. However, reimbursement challenges will increase pressure on the industry, as revenue growth is limited under rising cost structures. Thus, margins will likely be compressed. According to Mr. Searles, providers will be increasingly required report on quality. “This should have a positive impact on the industry as payments are tied to quality and cost containment. However, the impact of ACOs is uncertain and compliance risk is considerable.”
More Articles on Becker’s Hospital Review Annual Meeting:
Restructuring or Turning Around a Hospital: It Doesn’t Mean Bankruptcy
How Health Systems Can Develop ACOs and an Alignment Strategy
Achieving Best Practices in Revenue Cycle With Electronic Medical Records
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