'Adversarial would be an understatement': The tumultuous dynamic between hospitals, ASCs

Physicians trying to open ASCs in many markets face opposition from hospital leaders when trying to obtain a certificate-of-need. 

Shakeel Ahmed, MD, CEO of Atlas Surgical Group in St. Louis, joined Becker's to discuss how he approaches this dynamic. 

Editor note: This interview was edited lightly for clarity and length. 

Question: How would you characterize the relationship between hospitals and ASCs?

Dr. Shakeel Ahmed: To call it adversarial would be an understatement. ASCs are often the only competitors of the hospital business. ASCs were nonexistent in the '60s and were barely around in the '70s. Now, there are more ASCs than hospitals. This tells you that they're here to stay. Competitors, like hospitals, are on edge. They're in a definite defense position and employ tactics that are oftentimes anti-business, anti-competitive and keep the ASC industry from reaching its full potential. 

Q: What are some red flags to look out for when approaching hospital-ASC dynamics?

SA: So I opened my first ASC about 20 years back — I own and operate five ASCs across two states, together with another roughly 15 medical businesses. Once you reach a certain age, you gain enough wisdom to know the good and the bad side of everything. If I had to summarize, the biggest red flags are certain legal provisions that the hospitals exploit to keep the competition at bay. From my 25 years of experience, I have found the single biggest travesty of the whole healthcare legal system is the certificate-of-need. It's outdated, unnecessary and maliciously explored and exploited. ASCs are at the short end of the stick for the certificate of need business, because you have to go to the state to apply for one. In Illinois, not only do you need to get approval to open an ASC, but you also have to obtain approval for each additional specialty. Oftentimes the hospital will bring in the cavalry to oppose you. The hospitals own all the healthcare enterprises around them, and you will frequently see them show up with 30 to 40 letters of opposition. 

Additionally, part of the CON, is that oftentimes the state mandates you obtain a letter of support from a surgeon in that specialty, and often that surgeon works in the hospital. I've seen in personal experience with some of the orthopedic surgeons that supported our ASCs in the past — no one wants to support you because their livelihood is at stake. 

Q: What advice would you give ASCs to mitigate this adversarial relationship?

SA: Nobody roots for Goliath.That rings true in this situation. No matter how strong the opponents, the ASCs are good for healthcare. We have almost a $30 trillion federal deficit and 30% of our GDP goes to healthcare. The vast chunk of that expenditure is hospital fees. The powers that be know that. The way you play with this power dynamic is to focus on the saving. Also, you have to engage the hospitals. I don't want to demonize the hospitals, we need them. When your child is sick, you rush them to the hospital. But we need to think about the consumer, the healthcare system and the government.  

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