January 16, 2024

ASC Industry Awareness

2023 ASCs by the Numbers

This past year was a very productive year for new ASCs as it was for surgery centers as a whole. That momentum bodes well for 2024. Want a peek behind the curtain at some of the numbers? Do you live in a state with the most new ASCs in 2023? Find out here. For a full state-by-state breakdown of new 2023 ASCs, click here. An amazing 46 new ASCs earned approval to be built in certificate of need states! Of 116 total new known ASC openings, 55 were opened by hospitals or healthcare systems, which signifies (unlike the popular storyline) that independents and smaller physician groups are still significantly in the business of developing and growing surgery centers.

Orthopedic Popularity for ASCs

The volume of orthopedic procedures is skyrocketing at ASCs while it drops off precipitously at inpatient hospitals. The 2023 American Joint Replacement Registry report notes that orthopedic procedure volume is now thirty-three times higher in outpatient settings than inpatient settings, with outpatient procedures increasing by nearly 300% from 2019 to 2023. In addition to the increasing viability of orthopedic procedures due to easing of regulations and adoption of technologies, the patient experience in orthopedics makes it a popular specialty for ASCs. This partial list of 18 new 2023 orthopedic and spine practices hints at the growth in this strategic market for surgery centers across the country.


Healthcare Industry/Trends

Insurers Out-of-Step with Patients and Providers

Heading into 2024 it is not hard to witness the increasing headwinds facing healthcare insurers. In an end of year Gallup poll of how Americans assess the various aspects of the US healthcare system, nurses and physicians fared well even as health insurance companies and nursing homes found themselves parked in the cellar. Medicare Advantage is still being marketed strongly to seniors but providers are increasingly going out-of-network, as lack of Medicare payments becomes an even larger issue in the New Year. Inflation continues at a more moderate pace, but Medicare cut physician fees for 2024, continuing the theme and the reimbursement pain. To fan the flame, a UHC AI algorithm has led to Medicare Advantage claims denials, as alleged in a class action lawsuit filed in November.

Healthcare Workforces in Recalibration

The COVID and post-COVID eras have made staffing a challenge in many industries, but few have been as effected as healthcare. 2023 witnessed job cuts up 91% over 2022, in a year of C-suite layoffs and hospital staffing recalibration. Fifteen payers cut jobs in 2023, several of them more than once. Three major medical device makers went through staff restructurings in the year. Walgreens laid off approximately fifteen percent of its corporate headquarters workforce to streamline operations in two rounds in 2023. Rothman Orthopaedic Institute is reducing its workforce by five percent to respond to market forces at the beginning of 2024. Slowing inflation is expected to be good news for ASC staffing in 2024.


Healthcare M&A, Valuation, Revenue Cycle

Early 2024 Features Two New Combined Health Systems

Bristol Myers bought Karuna Therapeutics for $14 billion at the end of 2023 to beef up its presence in neuroscience drugs. 2024 M&A activity began in earnest with MedMatrix announcing a 15-year end-to-end revenue cycle management (RCM) partnership with VHC Health. Healthcare IT hit the proverbial speed bump in 2023, slowing deal making while maintaining its allure for private equity (PE) investors. Speaking of PE, 386 US hospitals are owned by PE firms, representing 9% of all private and 30% of all proprietary for-profits. On the cusp of the New Year, Jefferson and Lehigh Valley Health Network in Eastern Pennsylvania signed a non-binding letter of intent to combine to create a regional healthcare system. As of January 1, the state of Wisconsin is also a received a brand new combined health system.


Out-of-Network Watch

Impasses Contributing to Patient and Provider Crises

Thanksgiving, Hanukkah, Christmas, New Year, Contracting Season. It is an annual cycle. Contracting season rarely seems to get any easier … typically becoming a more protracted slog. 2024 is shaping up to be particularly slog-worthy for even large providers. Baptist Health, one of the largest providers in Kentucky, is no longer in-network for Medicare Advantage plans run by UHC, WellCare, and Humana. News hit the New York Post that Sloan Kettering cancer patients are concerned since Cigna has informed them that Memorial Sloan Kettering Cancer Center’s contract will not be renewed in 2024. Six Mt. Sinai hospitals, Baptist Health in Arkansas, and Prisma Health in South Carolina are now out-of-network with UHC due to ongoing disputes. Like physical health providers, mental health providers are feeling the same weight of insurance contracting issues and increasingly are forced to stop accepting commercial coverage.


Healthcare Digital Transformation Watch

2024: The Year of AI Regulation

It very much looks like 2024 will be a year of significant regulation for the meaningful use of artificial intelligence (AI) and machine learning. Regulation of new uses of technology is often fraught with hazy challenges and AI policy will likely be no different. In 2023’s Q4, Federal government regulation of AI utilization within healthcare began with an executive order for HHS to devise strategy for healthcare AI transparency. The White House received pledges from 28 large healthcare players to gear their AI and machine learning models to achieve “Fair, Appropriate, Valid, Effective and Safe” (FAVES) outcomes. In December, HHS took the initial step in regulating AI tools and uses with its first AI rule for healthcare.



Cybersecurity Funding in 2024

   From the office of Jon Sistare, JD, Attorney at Law

Excerpts from “Why Enhanced Cybersecurity Funding Must Be Addressed in 2024” by Wes Wright in Health Data Management, Jan 15, 2024. Full article in link.

08 December 2023


The Biden Administration recently announced several new initiatives intended to “promote competition” in the health care sector. These initiatives reflect a broad range of concerns about rising costs in health care, including pointed references to “price gouging” and “profiteering” by private equity and big business. They also complement a number of enforcement actions, guidance statements, and rulemakings that the Federal Trade Commission (FTC), Department of Justice (DOJ), and Department of Health and Human Services (HHS) have taken over the past three years to promote competition in the health care sector.

Some of the initiatives:

  • HHS, FTC, and DOJ are taking steps to promote the sharing of data among themselves to identify so-called “roll-up” acquisitions, such as mergers or acquisitions that may be too small to require reporting to the FTC or DOJ.
  • In the near future, the DOJ, FTC, and HHS will issue a joint Request for Information to the public, seeking information on the topic of “corporate greed in health care.”  This Request for Information will be used to identify areas for future regulatory and enforcement activity by these agencies.
  • Finally, the Centers for Medicare & Medicaid Services (CMS) is taking steps to increase the transparency of certain data it keeps about health care organizations. For the first time, CMS will publicize data about the ownership of Federal Qualified Health Centers and Rural Health Clinics. CMS will also explore ways to increase the transparency of data about Medicare Advantage plans and performance, starting with a request for information from the public on this topic to begin in early 2024.


At a Glance

Hackers Demand $50 from Patients
Threaten to Send SWAT Teams to Cancer Patients’ Homes

First Person outside VT to Use State’s Law to End Life
CT Woman Uses VT’s Aid in Dying Law for Assisted Suicide

Walgreens to Pay Humana $360M to Settle Drug Price Dispute
Payout Is Half What Walgreens Was Originally to Pay

Amazon to Offer Lower Cost Primary Care to Prime Members
Charges as Little as $29 Out of Pocket per Virtual Visit

Vanderbilt Med Center to Test Microsoft AI Copilot
Testing AI Program to Automate Creation of Clinical Notes


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