ASC executives, owners, and care providers face a transformational time, and what they do now will have major impacts on their competitive position for years to come. The convergence of new technologies with changing patient demands, evolving regulations, and shifting reimbursements make innovation more urgent than ever for surgery center leaders.
Few medical technologies are pushing the standard of care faster than robotics. No longer reserved for hospital-based advanced medicine centers with enormous capital budgets, robotic technologies are rapidly gaining adoption in outpatient settings. In a recent survey of 214 ASC financial decision-makers, 91% saw robotics as critical for growth in the next 24 months, but only 8% had so far invested in the technology.
Driving Better Outcomes and Increased Revenues
Robotics allows increased procedure volume with fewer complications and a better patient experience. More procedures drive more revenue to reduce the cash recovery cycle. Informed patients have become increasingly comfortable asking for and recommending ASC procedures, providing additional opportunities for long-term organic revenue growth. Further, the precision offered by the technology drives greater efficiency, faster recoveries, and enhanced profit margins.
Hospitals often aren’t as nimble as ASCs when it comes to many surgeries, fueling the shift to the outpatient model. But one of the key factors limiting the ability of ASCs to fully leverage these opportunities is the perceived financial impact of outfitting their facilities with the necessary robotic technology.
But not all robots are enormous investments, and finding the right niche can be a great place to begin for small and mid-sized centers. Most importantly, new procedures open the door to new revenue streams and competitive differentiation. Why choose a hospital procedure when you can get the same procedure with the same technology but delivered faster, with a higher standard of care, and for less cost?
The benefits are clear for patients and ASCs. But how can smaller to mid-sized ASCs build a business case for an investment that can start at seven figures?
Funding the Future
If capital constraints and near-term ROI are the limiting factors preventing investment in technology with this kind of value proposition, it may be time to consider an alternative method of acquisition.
Few ASCs are flush with available cash on the balance sheet for a multi-million-dollar investment like this. And it’s a big ask for owners to dig deep and raise the extra cash or to reduce their profit distributions to cover the expense.
How about lines of credit or loans? Using a center’s working capital line of credit to fund a fixed capital expense offers the benefit of a low interest rate if the investment can be recovered in 12 months or less. Low-interest bank loans are another alternative, but they may come with restrictive covenants or down payments. Bank lending options may also require extensive personal guarantees or otherwise interfere with other capital relationships.
Limitations like these means ASCs these days prefer working with equipment finance companies with real expertise in healthcare technology. These providers can bring a wide range of strategies to the table to help ASCs access the latest technology while preserving cash, maximizing asset ROI, and eliminating the need to seek funding from owners and other capital partners.
With the right finance provider and structuring, robotics packages can include 100% financing of hardware, software, and soft costs like training, installation, and set-up. ASCs can also take advantage of step-up payments that provide better control of cash flow while procedure revenues are ramping up.
Lenders who specialize in this type of financing are experts on the technology, the healthcare revenue cycle, and the unique ownership structures of ASCs. Providers like these can help you plan to add more robotic-led procedures over time while keeping the ones you have on the cutting edge of technology. This eliminates the need for painful cash disruptions with each new purchase.
Investing in robotics is clearly a key competitive move for today’s ASCs. And with the right strategy powered by the right financial partner, ASCs can not only position for long-term strength but also preserve the financial agility needed to maintain a nimble response to a fast-changing marketplace and continue delivering the highest standard of care.