Mark Farlin

Author: Mark Farlin
VP, Head of Healthcare & Infrastructure

With 2020 finally behind us, many providers face headwinds of continued uncertainty driven by resource allocation for COVID case management and vaccine distribution. But ASCs are uniquely poised to benefit as hospitals turn their attention aggressively toward COVID-related matters and away from elective procedures.

Insurers were already working to direct procedures to ASCs for reduced costs prior to COVID, but in an environment where hospital infection concerns prevail, 2021 is likely to see more aggressive moves in that direction. The trend is also driving more partnerships and joint ventures between practices and hospitals as providers position themselves to take more market share in the coming years.

With industry-transforming winds at the back of ASCs, capitalizing on growth will require new thinking about equipment and technology investments. Leveraging data from a key research partnership that surveyed 320 ASCs in late 2020, LEAF offers five key trends in ASC capital expenditure spending going into a pivotal 2021:

  1. Cutting Edge Equipment
    It’s never been more important to ensure physicians have the newest technologies. From robotics to imaging, these assets offer the ASC more than a potentially enhanced revenue stream or more efficient approach to care; they can be terrific recruiting tools.
    78% of ASCs had plans to upgrade surgical technologies in 2021.
  2. Software and Operations Technology
    With an undoubtable growth heading to ASCs across the country, it’s critical to have the operating infrastructure to handle the surge. Ensuring ASCs have the management, imaging, compliance, and other software and office technology to power it will be key considerations for 2021.
    71% of ASCs had plans to upgrade operations software and technology in 2021.
  3. Lab Technologies
    Many third-party labs have shifted their focus to COVID-related matters. As such, service levels for non-COVID labs have suffered. But with elective procedures performed by ASCs finding greater volume in 2021, many providers are choosing to bring the lab in-house. Investments for in-house lab technologies are up 200% since 2018, and in addition to offering a faster, improved care experience, in-house labs create another revenue stream.
    69% of ASCs had plans to invest in lab technology in 2021.
  4. Facility Expansion
    Less allocated space for elective procedures at hospitals and the increase in demand for ASC outpatient care is leading to a boom in facility expansions. ASCs are preparing to do more procedures and further diversify the types of procedures as CMS expands reimbursement policies. New facilities require capital that reaches beyond bricks, mortar, and drywall and into everything from security technology to furnishings.
    64% of ASCs had plans to expand facilities in 2021.
  5. New Procedures
    As reimbursement policies expand and care demand shifts from the hospital environment, ASCs are moving deeper into offering new procedures and the associated new revenue streams. New procedure offerings often require up-front capital in place months before the first billings occur, creating a short-term cash crunch for what may ultimately be a long-term profit boom.
    83% of ASCs had plans to expand procedure offerings in 2021.

Growth requires capital and liquidation of cash reserves, which is suboptimal in a less than predictable economic climate. But with a creative approach to equipment, technology, and project financing, you can make these mission critical acquisitions within a predictable budget, preserving cash and maximizing dividends to the partners.

The Healthcare team at LEAF has extensive expertise working with ACSs on everything from surgery robotics to office furnishings. Providers across the country trust us to keep them on the cutting edge of care while preserving their cash reserves.