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This is Alan Condon with the Becker's podcast.
I'm thrilled to be joined today by Terry
Boulke, who is the vice president of ambulatory
surgery centers
at Community Health systems. Terry, a real pleasure
to have you, on the podcast with us
today. Before we get started and pick your
brains a little bit, I'd love to turn
the floor over to you to hear a
little bit more about your background and your
role at CHS.
Yeah. Sure, Alan, and great to speak with
you.
I am the vice president of ASCs for
community health systems, which is one of the
largest,
health systems, hospital systems in the United States.
We have
ownership in about 25 ASCs nationwide.
And,
my responsibility is overseeing,
pretty much everything there is to do with
ASCs
in our company.
Prior to that, I was vice president of
operations for 2 different national
ASC management companies.
And prior to that,
I was actually the administrator
of a large surgery center in California.
I think and if I'm not mistaken, also
a past president of ASCO, the Ambulatory Surgery
Center Association as well. Is that correct?
That is correct.
Alright. Well, no better man to speak to
when we're talking about, the ambulatory surgery center,
industries. They're really excited to to dive into
our conversation.
Pleasure to have you on the podcast, Terry.
So to to kick things off,
so much happening in health care at this
time, but particularly
exciting in the outpatient there arena.
When we think about just the growth over
the last decade or so, but maybe it
seems to be accelerating
towards the outpatient setting when we think about
ASCs, urgent care urgent care centers, primary care
centers, and whatnot. I'd love to hear what
are 2 to 3 trends that you're really
following in the ASC space today and why?
Yeah. Great question.
I
I guess I I'd have to say top
of the list is staffing,
you know, more more current just,
trying to
keep ASCs filled with. As you mentioned, the
growth has been significant and trying to keep
up with that growth in staffing,
and most of that's in clinical staff areas,
but also,
probably even a bigger issue is staffing anesthesia,
so being able to have anesthesia providers available
just with the limited,
you know, the traditional ORs opening and then
fewer providers available.
So that's a big one.
Kind of along with that are just costs
overall
have
drastically
increased post COVID, and it's just about everything
across the board.
So that that's been a a real problem.
I'm trying to keep on on top of
that,
keep, you know, trying to look for ways
to
be smarter about how we utilize,
trying to take advantage of, you know, maybe
a sole source or a dual source purchasing
to try and,
keep the prices down, but but the the
increase in costs,
are just a real real issue with ASCs
nationwide.
And, I guess, one more
that kinda goes along with that. A third
one is just reimbursement
is not keeping up with those costs.
And, you know, even even in the with
with hospital partners, you know, that can tend
to
bring a lot more leverage and higher rates,
it's still
cutting into those margins
because
the COLAs aren't anywhere near the inflation rate,
not for commercial payers and not for Medicare.
So I think those are kind of the
things that
that I'm concerned about and and trends that
I I watch closely for ASCs.
Yeah. Yeah. No doubt. The reimbursement is obviously
a huge issue and rising costs, like you
said,
impacting pretty much everything from supplies, drugs, facility
costs, and whatnot. And then the first trend
that you mentioned in terms of staffing, clinicians,
but more importantly, like you had mentioned, anesthesia.
I'm curious, just to follow quickly up on
that point, is
we've heard a lot about staffing shortages, workforce
shortages across the health care arena.
Anesthesia is one that we're hearing a lot
more about. When you think about
staffing SCs
with anesthesiologists,
is it relying on a strategy of recruiting
recruiting these talents or maybe through affiliations,
through partnerships with different groups to help staff
for anesthesia?
You know, it's just it's really a market
by market decision
and some markets have been affected less than
others.
And so those were kind of going status
quo or contracting with the group,
and,
you know, just as we always have,
in in other situations, we've had to go
the route of employing,
providers,
anesthesia providers.
And we're we're, you know, really looking,
you know, center by center and working with
the
the surgeons and procedure lists on, you know,
what type of anesthesia makes sense.
We're finding a lot of our centers are
the physicians are are very comfortable with just
an all CRNA model, of which, of course,
is the least expensive.
And then others
are interested in a CRA model with an
MD,
anesthesiologist
supervisor,
and that's kinda usually the 2 models we
end up with. There there aren't a lot
of centers that require anesthesiologists
and MDs.
They're they're very expensive
and usually come at the cost of a
stipend, but we do have some that require
that and and we end up having to
pay a stipend at those centers.
Gotcha. And and I wanted to follow-up as
well just in terms of the ASC sector
more broadly. Like you said at the top
of the the conversation, I think, with CHS,
the 25 ambulatory surgery centers,
in multiple markets.
Obviously, when we think about the for profit
health systems, the tenant really leading the charge
with its USPI with, you know, 100 of
ASCs and Optum's SCA Health,
following closely behind.
But we see you know, what what's interesting
to me is we're seeing a lot more
nonprofit health systems,
you know, jump into these joint venture partnerships
with surgery partners and other,
other ASC operators to really build out their
portfolios, expand deeper into the ASC space. I'm
curious just to get your thoughts.
How do you see, I guess, competition,
health systems in the ASC space, how do
you see competition evolving as we see more
and more health systems evolve, dive deeper into
the ASC space in the coming years?
Well,
I'm an ASC guy at heart, so I
love it.
I think the, you know, the more we,
get into
get more parties involved in ASCs, the stronger
the industry is.
It it's just a a great
way to serve patients and provide fantastic surgery
care.
I I think it's wonderful. I don't see
it competitive at all.
There certainly is a certain competitiveness
to it. But, typically,
you know, typically, there
there's enough room in a community to have
more than one ASC for most size communities.
So,
I welcome it.
Absolutely. So like you said, it's certainly an
exciting time to be in the ASC field.
What when you think about the future,
what are you most excited about when it
comes to ASCs?
Well, kind of along the line with your
last follow-up question,
collaboration,
I would have to say,
is is really what I I see now.
And, you know, with the
with the the low reimbursement relative to the
increased cost,
there just,
seems to me that it's better if we
work together,
instead of apart.
And so you you look at, you know,
physicians
wanting to start an ASC
frequently,
combining with health systems,
and,
you know, often there's a three way partnership
with that ASC management companies,
and now, of course,
the reemergence of private equity
into health care into these, so very interested
in ASCs.
You know, I I just think
the future
is really us all collaborating together
and work on our strengths, physicians obviously on
the quality of care and
and do the procedures themselves.
Health systems bring, you know, a lot of
things to the table, particularly leverage,
and that's leverage with managed care payers,
leverage with vendors,
and ASC management companies bring,
just a lot of ASC experience that not
all health systems have.
So I'm excited about that, and that's sometimes
lacking in some of these these arrangements.
So I think they add a lot of
value,
And I think the private equity companies
have made
a good
made some good progress in
bringing physicians together
and helping their leverage
and helping their expertise, helping them get involved
in more more ancillary
services like ASC. So I I I think
that just all of us working together and
collaborating together is really exciting to me.
Yeah. Yeah. I mean, when you think about
it, it really wasn't that far long ago
when, you know, patients were
requiring 1, 2, 3 night stays in a
hospital for the procedures like spine surgeries, hip,
knee replacements, and, you know, these procedures are
being done routinely in the a s in
ASCs now with patients up and out the
door in in a couple of hours. And
no doubt a lot of that comes down
to collaboration like you've mentioned, but also just
the the advent and technology. So really excited.
And when you think about the future, kind
of the next steps for the ASC space
down the line.
Absolutely. And, you know, hospitals are an important
part of that.
We need hospitals, obviously.
There are a lot of cases that can't
be done in ASCs,
but there are a lot of cases that
can, like you say. So the the more
we can collaborate, I think the better the
health system will be.
Yeah. Absolutely. And then I get, like, to
going back to what you said initially,
just thinking about CHF and your role there,
25
ASCs that you've mentioned,
how are you thinking about
growth in your role, growth at CHS and
the ASC span spectrum over the next 1
to 2 years or so?
Very strong growth.
I think because of
the cost increases,
I think there
are some headwinds
as far as growth,
as far as building new centers,
because the costs have just
almost doubled
post COVID, which is kind of crazy to
build a new ASC.
And so
I think that's
a bit of a headwind.
But
I think when we look at the growth
of procedures,
both moving to ASCs and also
procedures
in
other cases moving into hospitals, I think that
there's plenty of room for
both
the subsectors of healthcare of the hospital and
the ASC industries to continue to grow and
continue to thrive,
and continue to do well.
I I think that, you know, with with
the
the the lower reimbursement
increases in the ASC level,
I think that the partnerships with hospitals are
probably more important now than they've ever been.
And so
with those partnerships, I I do think that
ASCs are still a great investment.
I just think, you know, anyone who's looking
into that,
needs to be very disciplined in their approach
and evaluate their opportunities
because of the higher costs
and the lower reimbursement. You just need to
make sure that that,
pro form a is solid and the assumptions
are valid before investing.
Mhmm. Like you said, it's now cost twice
as much to build a new ASC as
it did pre pandemic.
Does that mean that,
CHS' strategy is shifting a little bit more
on the side of potential mergers and acquisitions
or how does that kind of play out?
No, not at all.
We're
just very disciplined
in when we build de novos, the new
ASCs,
we have several in the pipeline
to build and
they're all just great projects.
It takes more volume
to make a project successful
now than it did before
and that's kind of the key. So
it hasn't at all
slowed our interest in de novo projects.
And we do both de novos and acquisitions,
but we're very, very favorable on ASCs
and looking to grow in that space,
as much as makes sense for us.
Gotcha. Yeah. Certainly, it's such an exciting time
in the ASC space. And it's been a
real pleasure having you on your first podcast
with us, Terry. I really, really appreciate the
time, and, I look forward to connecting with
you again down the line.
Yeah. Thanks, Alan. Great talk.