Physician ASC Ownership

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By Brent Lambert, MD, FACS

For years, those of us who were pioneers in the ASC industry assumed that the concept of physician ownership of ASCs was not only axiomatic, but unassailable.  It just made good sense that MDs should own and direct the affairs of the surgical venues where they treated their patients.  Hospital administrators have not been successful in achieving similar standards of quality or efficiency. 

Fortunately, Congress has allowed MDs to own facilities where they could control the myriad of factors important to the health and treatment of their patients.  How shocking it was this year to hear as part of the healthcare debate, that our elected representatives were considering banning MD ownership of ASCs along with their ban on MD ownership of hospitals.  That this did not happen was because Congress realized that they would destroy the low-cost, high-quality surgical provider.  This would have made healthcare even more expensive as judged by the Congressional Budget Office (CBO), putting "Obama Care" over the psychologically important trillion dollar cost threshold.

MD ownership, with its inherent incentives for efficiency and quality, has been responsible for the success of our industry.  MD participation has raised the quality of surgical care above that of the competition benefiting millions of patients.  

MD ownership should not be taken for granted.  There are powerful forces at work who think physicians make too much money and their ASCs only create problems.   These forces want to protect their dominant market share in surgical delivery and will stop at nothing in defending it.  In over half the states in our country, if I want to improve the quality of my patient's surgical care by building a surgical facility, I am proscribed from doing so by CON laws.  These laws, once intended to control healthcare costs, have instead become a tool of the hospitals to limit competition on quality and price.  Hospitals have continued to experience out-migration of patients to MD-owned ASCs.  Hospitals cry foul because we have a higher quality and lower cost delivery model that if unhampered by anticompetitive laws and regulations will continue to gain surgical volume consistently and inexorably.

It is unlikely that the ASC industry would have ever gotten much of a foothold in the market place if it had not been for the MD ownership.  They had the disposable income to invest in a high risk venture that did not have the scale sufficient to attract institutional sources of capital.  It was 30 years ago and it remains today a cottage industry funded by MDs who want a better surgical outcome for their patients. 

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