March 15, 2024

ASC Industry Awareness

Why All the ASC Optimism?

Even with the challenges inherent in US healthcare delivery, surgery center leaders are enjoying a season of optimism … and why not? Technology advances continue to open opportunities for ASCs. The post-pandemic American public is much more aware of the significant value ASCs/OBSs/OBLs bring to their physical and financial health. Many surgical specialties are able to move more complex surgeries to ASCs than in the past. The increase in higher acuity cases is a big driver for growth, optimism, and satisfaction. ASCs more often have the recruiting advantage of surgeon ownership, which adds to the enthusiasm. Moreover, new ASCs are added every month, as attested to by the eleven new ASCs added in February.

ASC Challenges to Overcome

About those challenges in the middle of the excitement, there are the ever-present quandaries of increasing costs, reimbursement hurdles like prior authorizations, and declining reimbursements. ASC ownership arrangements are shifting, which causes some discomfort, but they are not shifting quickly. Hospitals are seeking to add pre-existing ASCs as a means of curtailing their case losses and bringing them back in-house. Consolidation can cut both ways, with potential benefits (such as improved payer rates) and potential stressors on physicians (like increasing the number of seen patients). Rising staffing costs and decreasing availability are also putting pressure on ASCs.


Healthcare Industry/Trends

2024 Healthcare Trend Reports

With time remaining in Q1 waning, the 2024 healthcare trend reports are fully in. Healthcare C-Suite top initiatives are (in order) growing revenue, staffing, and reducing cost. Even though healthcare mergers and acquisitions are a bit slow now, indications are that we are in line for the next M&A spree yet this year. Among the healthcare trends are the growth in stability of a hybrid arrangement of care delivery, featuring a mix of in-person, remote monitoring, and at home care. An extensive report sponsored by National Nurses United, details the high and rising rate of workplace violence nurses have experienced recently. Rural hospitals continue to struggle, with half of them operating at a financial deficit.

Consumers’ Growing Interest in Understanding Coverage

“Shrinkflation” is back in the American psyche in 2024 and employers and healthcare insurance subscribers are feeling it as they get less for their money. This dynamic is pushing consumers to take more interest in better understanding their coverage and out of pocket costs. Health insurers are experiencing increasing pressure to be more transparent in their pricing. Shrinkflation pressures along with a convergence of CMS pressures are making Medicare Advantage Exhibit A. These Advantage alternatives to traditional Medicare sold by commercial health insurers had more beneficiaries than the traditional plans, but market and CMS forces are causing them to grow skimpier and costlier for subscribers at the same time, which is causing some systems to drop Medicare Advantage plans.


Healthcare M&A, Valuation, Revenue Cycle

Smaller Mergers, Several on Hold

Expectations are high for a strong 2024 for healthcare M&As, but they have been small and quiet so far in Q1. Medtronic is partnering with Hall of Fame Health to expand access to spine and neuro care. HCA Healthcare picked up in 2024 where they left off in 2023, scooping up Texas hospitals, emergency departments, and surgery centers. Hospital month over month revenue is up but margin is down 11% in early 2024, making it a pattern to watch, though for the first time in a decade, providers are in a more favorable position for investment than payers. Scrutiny from state regulators has placed both SCAN/CareOregon and BCBS Louisiana/Elevance Health mergers on hold.


Out-of-Network Watch

The Widening Challenges of Contract Season

The annual challenges of contract season are well documented. The ensuing patient and provider pain, however, is growing numerically because ever-larger provider organizations are in disputes with insurers. UHC and UNC Health are at odds as an April 1 split date looms while UHC and UVM Health, Vermont’s largest healthcare system, managed to strike a last-minute deal. Citing denials and delays in prior authorization decisions, Baptist Health, one of Kentucky’s largest healthcare systems, ended contracts with three Medicare Advantage carriers. Medicare Advantage plans have become a special case in point, with insurers making these plans increasingly difficult to navigate successfully.


Healthcare Digital Transformation Watch

Change Healthcare: A Before and After Moment for Healthcare Cybersecurity

In 2023, a record 725 large cybersecurity breaches accounted for an average of 370,000 breached medical records … daily! On February 21, Change Healthcare (a division of Optum/UHC) experienced a ransomware attack by nation-state hackers on their payment exchange platform, which is the largest and most extensive in US healthcare. Change has acted appropriately to curtail damage, but the downline affects still amount to an attack on the entire healthcare sector. Patients struggle to get medications. Providers are going unpaid. UHC is seeking to have all systems restored by March 18. Even if UHC is successful in meeting their aggressive timeline, providers and even some hospitals are at risk of running out of cash. This breach, among other factors, brings into question the wisdom of the extensive reach of UHC in healthcare.



Data Breaches and Steps to Avoid Them

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

The healthcare industry has been the subject of more class action lawsuits regarding data breaches than any other industry in recent years. To date, there is no commonly recognized theory of liability to hold healthcare organizations accountable for stolen or jeopardized personal healthcare information. An often-used theory of liability has been the common law of negligence. To reduce or even avoid a claim of negligence, take these steps:

  • Back up all electronic data to a secured backup location. A healthcare organization with a secured, isolated backup at a remote location can restore its computer systems in hours. Once a computer is infected with ransomware, the virus can move between computers using the same network, which is why it is imperative to store backup data outside of the original network to ensure that it would not be exposed to the virus.
  • Limit access to staff members who require access to the organization’s shared network to perform their tasks; therefore, access to the network can be limited based on priority.
  • One of the simplest preventive steps a healthcare organization can take to defend itself from ransomware attacks is to inform its personnel of the risk posed by ransomware, common methods by which the virus is used to infect computers, and actions to avoid while using a healthcare server – such as clicking on advertisements, browsing unnecessary websites, or opening e-mails that seem in any way suspicious.
  • Other, more common methods of defending computer systems include setting up firewalls that block unknown IP addresses and ensuring that anti-virus and anti-malware settings are set to scan for threats.
  • HIPAA’s numerous provisions can aid a healthcare organization in protecting itself from ransomware and all other cyberattacks.
    • HIPAA’s SecurityRule requires organizations covered by the law to implement a risk assessment plan and to actively minimize the cybersecurity risks identified in the plan.
    • The SecurityRule also requires covered organizations to train personnel who have access to electronic protected health information and to designate a security official in charge of managing access to electronic protected health information.
    • Furthermore, the SecurityRule requires covered organizations to impose access controls regarding which employees may access this information.


At a Glance

Foo Fighters’ March 5 Washington DC Private Concert
Raised Awareness of Healthcare Price Transparency

3 of 4 Workplace Violence Incidents Now Occurring in Healthcare
Systems Adopting Patient Codes of Conduct

Colorado Bill to Expand Access to Medical ‘Aid in Dying’
First Hearing to Expand Out-of-State Access

Three Huge Healthcare Battles Set to Erupt This Year
Generative AI, Abortion, and Healthcare Pricing

The Challenge of Organizational Ambidexterity in AI
Getting the Right Mix between Humans and AI in Healthcare


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