How 2 independent practices are thriving in an increasingly consolidated environment

In December 2020, Dallas-based Tenet Healthcare reached a deal to acquire 45 ASCs from Nashville, Tenn.-based SurgCenter Development for $1.1 billion, intensifying the efforts of major ASC management companies and private equity-backed platforms to drive consolidation in the industry. 

The majority of ASCs remain physician-owned, according to data from Global Healthcare Advisors. Yet, as the industry faces cost pressures from the COVID-19 pandemic, consolidation platforms, PE firms and health systems are stepping in to acquire centers to diversify their risk and add to their yearly revenues. Each ownership model touts an array of benefits, and no one model is better than the other. 

Consolidation pressures in the ASC industry have existed for years, but are starting to increase as companies, firms and hospitals recognize the value of the thriving ancillary and aim to get ahead of the accelerated and sustained shift to the outpatient setting.

A Tenet spokesperson elaborated on the company's deal and the greater guiding principles behind United Surgical Partners International's shift to the ASC industry: "The ambulatory surgery industry is incredibly fragmented, with USPI owning a very small portion. For patients and physicians alike, our ASCs offer a smaller, more intimate setting that is localized to the needs of each community. Importantly, ASCs have the critical benefit of lowering the overall cost of care for patients and the healthcare system as a whole."

Yet, physician owners take pride in their practice and business, and for some owners, independence remains the only model they'd see themselves practice in.

Note: Responses were edited for style and content.

Question: How will your practice compete with growing ASC management companies?

Robert S. Bray Jr., MD, neurological spine surgeon and founding director of Newport Beach, Calif.-based DISC Sports & Spine Center: While the chain acquisition of surgical centers has caused notable consolidation, there remain several significant advantages to an independent center. In the higher-acuity market, such as spine and joint, the ability to maintain your own quality protocols and personalized service is a significant plus to the patient population. While the major purchasing power and contracts of the large chain are certainly a plus, those physicians lose controlling interest and give up secondary management fees.

Being self-administered and managed has led us to work hard to develop top talent, but has also allowed us to lead the development of our own standards and protocols. As a result, we have very broadly expanded the case possibilities and maintained the highest-quality outcomes. Not everything fits into a box; being self-administered and owned has allowed us the flexibility to adapt and respond.

We have seen, and continue to see, significant growth during the ongoing pandemic. Similarly, much of this is due to our rapid and complete development of strict protocol management, support of our employees and patients-first attitude, with the ability for a decision process that's both nimble and resolute.

I believe that, with the dedication to the obviously challenging task of running a complex ASC, the independent structure can still lead the way in innovation and standard-setting. It has certainly created an incredibly satisfying and rewarding environment for the physicians while helping us develop outstanding relations with the payers and patients.

Vincent Hayes, COO at Bradenton-based Florida Digestive Health Specialists: Private practice rewards the fundamental skills physicians acquire in their training — individual judgment, quick decision-making and collaboration. When a company is entirely owned by physicians, rather than a hospital or PE company, partners can react quickly to today's dynamic healthcare environment. Our growth reflects how well this model can work. In 10 years, we've expanded from 23 providers to more than 80 and from just a handful of offices to 26 clinic locations. When COVID-19 hit, our teams selected and launched a new telemedicine system in one weekend. And while other health systems cut physician salaries, we onboarded seven new gastroenterologists and opened two new clinics. We're able to keep operational costs low, streamline administration tasks and use our large market share to negotiate better reimbursement rates. Our patients also benefit from improved access and continuity of care.

In private practice, decision-making is in the hands of the physician partners rather than hospital leadership or a management group with a controlling stake in the practice. Often, these companies are far removed from the physician-patient relationship and the communities where providers serve. The employment model is quite different from ours, and we've heard from physicians who are having second thoughts or experiencing burnout. There are certainly pros and cons to both settings, and we always suggest physicians do thorough research about any organization before signing on the dotted line. For our part, we will continue to anticipate and adapt to upcoming healthcare changes, expand our presence in markets where there is community need, and recruit physicians who thrive on professional autonomy and ownership in a great organization. Most importantly, we will remain focused on providing outstanding patient care.

More articles on surgery centers:
Intermountain Healthcare campus in Utah to include ASC
Alabama hospital seeks approval to turn outpatient department into ASC in $4M project
Biden exec order reopens ACA insurance marketplaces: What ASCs need to know

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