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- Surgery centers experiencing increased ownership by private equity firms and acquisition by hospitals / healthcare systems
- Through focused marketing strategy, technology and payer steerage, conducting more advanced procedures and being reimbursed less due to managed care / Medicare pressure
Surgery centers (also known as surgical centers, ambulatory surgery centers, outpatient surgery centers, day surgery centers) can support an array of procedures; these are four of the most common procedural specialties performed in surgery centers:
Surgery centers have run a circular growth path. Originally, many were developed as venues for highly specialized procedures. Then physicians and their business partners embraced them as investments. They were a way to grow personal income and practice medicine according to their own protocols -independent from the hospital business environment and administrative politics. They are known by a variety of names depending on facility and business model; this includes surgery or surgical centers, surgicenters, outpatient surgery centers, ambulatory surgery centers, same day surgery or day surgery providers. Now hospitals and healthcare systems have directly engaged this marketplace due to healthcare reform and managed care reimbursement opportunities.
The changes are occurring for several reasons:
- As surgery professionals grew more comfortable conducting procedures outside the hospital, the variety of patients/procedures widened.
- To increase revenue and maximize utilization of operating suites, specialized surgical centers redefined themselves to accept a greater variety of patients.
- Advances in surgical technique, drug therapies and technology have enabled more complex, varied procedures to take place safely outside of the hospital setting.
- The segment grew with development of regional chains of multiple surgery centers and professional management companies partnering with surgery center owners to assist in billing/contracting with managed care organizations and healthcare systems.
- Due to facility efficiencies and specialized business practices, they were able to perform procedures at less cost than hospitals; managed care recognized their economic value and began steering patients to them and readily reimbursed surgeons for procedures conducted there.
- In some cases, hospitals have competitive issues with surgery centers if the surgery centers are taking on procedures which offer more margin -this siphons profit away from hospital revenues.
Presently, as healthcare systems compete and seek additional streams of revenue, many are opening their own de-centralized surgical centers or acquiring those which are privately held. Tenet and HCA have expanded into this area. This enables them to have a longer length of direct access to revenue streams through the continuum of care offered to patients under managed care plans.
Growth of independent surgical centers continues through highly specialized providers of care such as Vein Clinics of America, Illinois Bone & Joint Institute, Physicians Endoscopy or Southwestern Eye Center. These venues offer highly specialized care at competitive costs outside of large scale healthcare systems.
In January, 2017, UnitedHealthcare (UHC) announced it was acquiring surgical center chain Surgical Care Affiliates (SCA) for $2.3 billion. SCA operates over 200 surgical facilities with more than 7,500 physicians. The facilities conduct about 1 million procedures annually. This is part of UHC's ongoing initiatives to change its business model beyond being a healthcare plan to encompass being a healthcare provider organization; its Optum business unit plays a pivotal role.
As other plans, such as Anthem and Aetna, have chosen to expand their covered lives, UHC has chosen a different route. By acquiring medical practices, UHC has more direct influence on providers, care protocols and costs associated with them. By adding SCA to the combination of other medical practices they own, it provides different streams of revenue for UHC. It also improves their position to negotiate rates with other health systems and care providers.
... This is a list of leading Surgery Centers and Specialty Surgery Providers; scroll down for presentations and Surgery Center market trends ...
... Learn about UHC's changing business model and growth opportunities in the surgery center sector; read the articles below ...
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