Here are three ASC leaders' predictions of how the economy will affect ASCs in 2025.
Editor's note: Responses have been lightly edited for clarity and length.
Sean Gipson. Division CEO and President of Remedy Surgery Center in Hurst, Texas: Generally speaking, when the economy is positive, healthcare spending tends to increase. Stakeholders are more willing to spend their hard-earned dollars when the consumers are scheduling elective and/or outpatient procedures and volumes are up. When the overall confidence of both patients and payors is high, the affordability concerns are often low, resulting in relaxed spending habits. Another consideration is the saturation in the market that your ASC resides [in]. Hospital systems are competing in many of the ASC markets throughout the United States. Hospitals obviously tend to have deeper pockets and may cause smaller ASC to consolidate spending. On the other hand, smaller companies can be more flexible and quicker to make adjustments, ultimately making them more competitive as the ASC market evolves.
Jonathan Murphy. CEO of Murphy Medical in Indianapolis: McKinsey & Co. released a report earlier this week that included a section saying that "most healthcare segments could show more than 5% annual EBITDA growth from 2023 to 2028." Of course, with this date range, it is taking numbers from the current administration, as well as the incoming administration and those expectations. From my perspective working on the new surgery center development side, there was a boom right after the election of doctors, management [and] development groups contacting me regarding new surgery center developments for 2025 and beyond. This could be attributed to [the fact that] they think the economy will be better under the new administration with potentially lower interest rates on lending, lowering the total cost of building a new ASC. It could also be that people believe there will be policy changes, allowing more freedom and transparency in the ASC space.
Robert Nelson, PA-C. Vice President of Business Development of EyeProGPO in Watkinsville, Ga: The economy presents so much uncertainty for ASC leaders. Access to [and the] cost of capital and rising supply, equipment and staffing costs all loom precariously over the heads of ASC leaders. It's not yet known what impact the new administration in Washington will have on healthcare in general, and the ASC industry in particular. But, there seems to be a renewed focus on cost containment and efficiency. Perhaps we will now finally see the playing field leveled so that the HOPD and ASC reimbursement rates are standardized to create significant savings, while hopefully also boosting ASC revenues. This has been "low-hanging fruit" for many years. Maybe, just maybe, we will now see this change made.