Helene Levenson, senior consultant at Cardinal Health, discusses how the ASC industry is adapting to changes in healthcare and what to expect in the future.
Question: What are the top one or two solutions to the big challenges you’re seeing for ASCs today?
Helene Levenson: One of the biggest challenges ASCs face is how to limit costs as they compete for both more patients and more complex procedures. A successful strategy that we see and support every day at Cardinal Health is limiting the quantity of supplies that ASCs maintain on the shelf. By taking an informed and creative approach to just-in-time delivery, ASCs can align their inventory levels more accurately with actual utilization.
With this 'order-to-use' strategy, ASCs can minimize the number of SKUs (stock keeping units) that they must hold in inventory. They can also adjust their supply delivery schedule so that deliveries are made more frequently—for example, daily instead of twice a week. By doing so, ASCs receive supplies for use the very next day. So that means they’re not holding excess supplies on the shelf, which lowers carrying costs and helps avoid product expirations.
Q: Do you see a place for solo and small practitioners and centers, or is there more consolidation in the ASC field on the horizon?
HL: Without a doubt, the consolidation trend will continue, particularly as large health systems vertically integrate and expand through acquiring and/or building their own ASCs. Well-capitalized health systems are leveraging their size to retain patients already in their network. They will also continue to attract more physicians. Nearly half of general practitioners are already with large health systems, according to the U.S. Department of Health and Human Services.
With so much merger and acquisition activity going on, many ASCs are concerned 'they're next' and will be purchased. This uncertainty can make it difficult to function effectively and compete for patients. At the same time, there are many established ASCs with strong reputations who will continue to hold their own and be competitive, despite all of the consolidation and change in the ASC world.
Q: Is the push for price transparency in healthcare good or bad for ASCs? Why?
HL: It’s not necessarily good or bad — but simply the new reality in healthcare. Greater price transparency can be beneficial in many ways, such as helping to lower costs by increasing competition. Transparency can help consumers compare surgery options more effectively and make more informed decisions about their choice of surgery centers. For that reason, the push for price transparency is clearly consumer driven.
But achieving true transparency is a challenge. Consider how a consumer will typically receive one bill from the surgery center, and then another from radiology, pathology, anesthesia and so on. Consumers need to be aware that the bill from the surgery center alone is not going to be the 'price at the pump.' There are a lot more services involved.
What can ASCs do to improve price transparency for consumers? They don't want 'hidden' costs or 'surprise' billing. This is the challenge going forward.
Ms. Levenson will share her expertise as a speaker at the Becker's ASC 26th Annual Meeting: The Business and Operations of ASCs, Oct. 24-26, 2019 in Chicago. To learn more and register, click here. For more information about exhibitor and sponsor opportunities, contact Maura Jodoin at mjodoin@beckershealthcare.com.