The ASC industry is facing increased consolidation as some ASCs look to partnerships with hospitals and health systems to stay afloat in a challenging economic climate.
These partnerships are increasingly popular as ASCs may benefit from the shared resources from hospitals or larger systems, and those larger systems may see ASCs as an effective way to achieve cost savings and add valuable services for patients.
However, power imbalances can also lead to strife in these relationships, and some ASCs remain wary of involvement with larger provider organizations. According to L.E.K. Consulting's "2024 ASC Insights Study," there are several common ways that provider organization ASC strategies "fail to meet [the] expectations" of ASCs.
Here are the chief pitfalls among provider organizations that the consulting firm identified in its report:
1. Blind to local market dynamics: ASCs may feel that hospital or health system partners develop a plan based on anecdotal or state-level intelligence, as opposed to more local market dynamics.
2. Blind to physician perspectives: ASCs reported that larger partners may be designing development plans based on hard volume and supply data, but without the perspectives and desires of physicians and patients.
3. Too hypothetical: Development timelines may not be based on the experiences of those operating the ASC or not "cognizant of regulatory, financing or other approval needs."
4. At odds with legacy business: Hospitals or health systems may not be considerate of or communicative about the impact that a possible partnership will have on the legacy business or the ASC, which can drive resistance to the partnership.
5. Too centered on legacy organization design: According to the study, health systems often apply hospital cost structures to ASCs, rather than adapting to ambulatory best practices.