Avanza Intelligence:
2020 ASC Joint Venture Survey

Avanza Intelligence: 2020 ASC Joint Venture Survey

A national survey commissioned by Avanza Healthcare Strategies found most hospitals and health systems, regardless of size, are planning to increase their investments in ambulatory surgery centers (ASCs). This third annual survey of senior healthcare executives and clinical leaders was conducted by Avanza and HealthLeaders Media in early 2020, prior to the pandemic. The survey, available here, provides valuable insight into hospital-ASC trends. Its findings underscore the growing importance of ASCs to hospitals, especially considering the migration of elective cases, which has only increased in the COVID-19 era.

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Majority of Hospitals Increasing ASC Investments

Hospitals and health systems of all sizes are developing de novo ASCs, and many are converting hospital outpatient departments to ASCs. From 2019 to 2020, those planning to increase their investments in ASCs rose from 44% to 67%. An even more impressive 76% of larger hospitals report increasing their investments in ASCs.

Survey results indicate consumers and payers alike are looking for a lower-acuity, less expensive site for outpatient surgery, and hospitals and health systems are responding. According to Joan Dentler, president and CEO of Avanza, "ASCs continue to be the model for providing high-quality, low-cost surgical care, and many hospitals are converting their outpatient departments or migrating cases to ASCs. This was true before the pandemic reinforced the business case for every hospital having a freestanding ASC in its portfolio."

Surge in Hospitals Expanding Their ASC Ownership

In two years, the number of hospitals owning or affiliating with more than one ASC jumped 17 percentage points. In 2020, 75% of hospitals with 200-plus beds have more than one ASC. "Payer pressures and other market forces have softened hospitals' historically defensive posture toward ASCs, paving the way for overall growth, lower operating costs and heightened patient satisfaction," Dentler says.

It's Good Business: More Hospitals Opening ASCs

Fifty-eight percent of hospitals and health systems with ASCs reported being party to at least one ASC joint venture. This number is down from previous years, likely because more hospitals own ASCs than in years past. "Gone are the days when hospitals formed joint ventures under pressure from surgeons. They now do it proactively because it's good business," according to Dentler.

Third-Party Management Declining

Continuing a downward trend, outsourcing ASC management functions dropped from 23% in 2019 to 16% in 2020. Dentler says this is another indication of a changing marketplace. "As hospitals and health systems deepen their investments in ASCs, they are also refining their in-house ASC expertise and resources to manage surgery centers themselves."

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Learn more about Avanza's experience working with hospitals, health systems, ASCs and academic medical centers by contacting [email protected]strategies.com or calling 512.479.6700.