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Top 3 Reasons Why Some ASC’s Fail

In today’s value-based setting, ambulatory surgery centers (ASC’s) are fast emerging as the preferred choice for outpatient surgical procedures. However, research by the Advisory Board shows that since 2009, nearly half of new ASC’s that open also close. 

The reality is that many surgery centers can falter if they fail to pay attention to critical areas of inefficiencies and risk.

Here are 3 common reasons why some ASC’s fail and how they can be avoided: 

1. Failure to Attract Cases with High Reimbursements

The ability of ASC’s to drive high case volume to their facilities has been identified as crucial to their long-term growth. In order to remain competitive in an environment with low reimbursements, ASC’s will need to target more cases with higher profits. 

Relying solely on procedures with low reimbursement rates will not position a center to stay ahead of the competition. ASC’s will need to expand their areas of specialization by adding new procedures with high reimbursements. For instance, procedures such as major spine cases and total joint replacements (TJR) have the potential to generate higher profits.

2. Failure to Prioritize Patient Care

The quality of care delivered to patients must be a major concern for ASC’s. This is becoming more important today considering the shift towards consumerism in healthcare. More than ever before, patient care is taking center stage as being one of the most crucial factors contributing to the success of a surgery center.  

A strong culture of patient care is required in centers to prevent infections, complications and low patient satisfaction ratings. According to Aziz Berjis, DPM, Founder and Director of Glendale Outpatient Surgery Center; the “patient care has to come first.” As long as ASC’s stick with a high level of quality in patient care they will continue to attract more patients.

3. Poorly Managed Contracts

Effectively managing payor contracts is crucial to the growth of a surgery center. However, centers face numerous challenges in successfully managing the contracts they have with payors. 

A common challenge is that ASC administrators are overly burdened with so many tasks that they are unable to dedicate the time and focus needed to effectively manage payor contracts, especially those that are soon expiring.

With careful planning, ASC’s can allocate more time to negotiating payor contracts. This can be done by either forming a team in the organization saddled with the responsibility of payor contract negotiation or by recruiting more hands if the present staff strength is low.

By paying more attention to payor relationships, ASC’s can negotiate contracts that will lead to significant cost reduction. This will in turn enable them to save more money to fund the growth of their centers.

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