Hospital System ASC Migration Strategy

As part of its strategy, the health system planned to convert a hospital-based outpatient department (HOPD) to an ASC. The health system’s ORs, procedure rooms, and cath labs were at maximum capacity. With renovation of existing ORs and a potential conversion of an existing HOPD to an ASC, the health system could not afford to close down ORs due to the risk of lost volume and leakage.

To better inform the MFP and ASC plan, the health system asked ECG to assess its current site of service for all surgery and interventional cardiology procedures and project the number of ORs and procedure rooms required to support growth over 10 years. The system also needed to determine the optimal case mix and number of inpatient, cardiology, IR, HOPD, and ASC rooms that could be supported. 

To mitigate the risks associated with the disruption in surgical services, the health system asked ECG to help optimize the ASC development and HOPD conversion process.

ECG assembled a team of subject matter experts to conduct a comprehensive assessment. The team: 

• Assessed the current state of all surgical and procedural sites of service. 
• Gained insights on clinical criteria for ASC eligibility and strategic considerations with key stakeholders. 
• Evaluated and recommended the OR and procedural room requirements for inpatient, HOPD, cath lab, ASC, and endoscopy and pain management procedure rooms, coupled with office-based surgery suites, over 10 years. 
• Conducted an OR and procedure room capacity analysis to quantify the room requirements by site of service to support future case volume. 
• Performed an extended recovery care analysis to support total joints and spine in the ASC setting. 
• Analyzed surgery migration revenue projections and implications over the next 10 years based on the site-of-service assessment. 
• Defined an ASC strategy, including the timing, location, and sequencing of migration of surgery and procedures, that would minimize the risk of losing case volume while developing ASCs and converting the HOPD.

ECG provided the health system with actionable insights on OR planning and site-of-service recommendations to accommodate surgery migration, potential implications to the MFP, sequencing of the development of two ASCs, and the conversion of the HOPD to an ASC. Key findings included the following:

• Identified more than 30,000 surgical and procedural cases as ASC eligible, representing more than half of the system’s total surgical and procedural volume
• Determined that 12 ORs and 6 procedure rooms would be required to support the ASC case volume and allow the hospital to increase OR and procedure room capacity
• Projected the total number of hospital ORs, procedure rooms, interventional cath labs, and office-based surgery suites required to support growth in surgery and procedural case volume over 10 years 
• Highlighted an opportunity to capture accretive value of approximately $5 million in ASC net revenue by recruiting new GI specialists and developing an endoscopy center while positioning the health system to recover lost case volume and attract GI patients
• Provided an ASC plan and timeline for the development of the endoscopy center and a bone and joint ASC, as well as sequencing to mitigate lost case volume during ASC development

This plan reduced projected losses by $7 million as a result of limiting the ASC development to case types that were migrating out due to market competition. The plan provided the health system with insights and new opportunities to recruit and retain gastroenterologists and orthopedic surgeons, positioning the system to recover lost volume and capture accretive value in surgical, procedural, inpatient, and ancillary services.