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Health Systems

Lower Costs Increase Hospitals’ Pursuit of Surgery Centers

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Advocates for shoppable healthcare say that patients should look for ambulatory medical centers to avoid the higher prices found in hospitals, but hospitals are increasingly the owners of these centers.

Over 40 percent of hospitals own an ambulatory surgery center, according to a survey from Texas-based Avanza Healthcare Strategies, a healthcare strategy firm, and 74 percent of hospitals are pursuing or looking for ambulatory surgery center expansion. The number of hospitals that own five to seven ambulatory surgery centers jumped seven percent in 2019.

As physician consolidation continues an upward trend, hospitals are adding physician-owned ACSs to their portfolios. Of hospitals with ACS facilities, joint ventures with physicians is up to 73 percent this year from 67 percent last year, and remain hospitals preferred ownership model. Physician consolidation has increased in recent years, but studies have shown that greater consolidation leads to higher healthcare costs.

Hospitals and health systems are less likely to partner with third-party investors in the ownership of ACSs, which dropped nine percent in 2019. Management too, is more likely to be internal. Nearly 80 percent of ACSs are managed by health systems or hospitals, as third party management is down 21 percent in 2019.