An overlooked ASC issue in CON states

Practice Management

Certificate-of-need requirements in certain states are posing physician recruitment challenges for single-specialty surgery centers, Janet Carlson, Executive Director of ASCs at Commonwealth Pain & Spine, said.

Ms. Carlson, executive director of ASCs at Commonwealth Pain & Spine in St. Matthews, Ky., oversees operations in Kentucky and Indiana. In Kentucky, there are CON laws that restrict the number of rooms a single-specialty ASC can have, while in Indiana there aren't any restrictions.

She joined the "Becker's Spine and Orthopedic Podcast" to discuss the operational challenges in her markets and the potential impact of the Federal Trade Commission's non compete ban for physicians.

Note: This is an excerpt. Listen to the full conversation here.

Question: How challenging is it staying on top of some of these regulatory changes when pursuing growth opportunities?

JC: There are systemic issues, in my professional opinion, with single-specialty CON restrictions. One of the things I don't think we're talking about at the ASC level in CON states that are single specialty is the fact that we are all competing for the same clinical staff. For example, I'm going to have multiple two-room ASCs in the state of Kentucky. Whereas if I could have a multi-specialty CON, I could consolidate staffing underneath one roof and offer multiple service lines. So, the single-specialty is actually hampering my ability to recruit and retain top talent. 

The clinical staffing shortages aren't being appreciated because of the fact that there's a single-specialty CON. As we are attempting to improve our community access to our patient base, we're having to deal with these restrictions. For example, Kentucky,requires as part of the CON application that I supply [the state]with an existing hospital system transfer agreement as part of the application process. That's a barrier I have no control over if the hospital in a market decides they don't want to have a standing transfer agreement with me. So before I'm even out of the gates applying for a CON, I can be shut down by the hospital system.

Q: How much of an impact would The FTC’s noncompete ban have on independent groups in your market?

JC: It will have a tremendous impact across America because physicians are unionizing. Some physicians coming out of hospital employment even are negotiating for a 90-day-out agreement, so they only have to give a 90-day notice. That will cause significant disruption in the health system. But in the private or the joint venture sectors, if we don't have a place for these physicians to go, that's going to be a waste of their skill set and talent and years of training. 

The ambulatory space, in my opinion, is the perfect space to accommodate a lot of the surgeons who are wanting to leave hospital employment and/or have the hospital systems get creative around a joint venture concept, because you'd like to keep your surgeons engaged. You'd like to be able to recruit them first of all. Second of all, you'd like to be able to align incentives so they are compensated for their hard work and rewarded for it. 

I think with the changes coming nationally, I know there are multiple states that are striking down noncompetes specifically for physicians, that is going to cause a huge ripple and tsunami effect. [People will come] out of employment looking for opportunities, and possibly even coming together to create their own private MSOs where they bring multiple specialties together and they attempt to provide care to the community.

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