ASCs

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ASCs The Next Five Years

• Presented by
• Scott Becker, Partner
• www.mcguirewoods.com

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ASCs - The Next Five Years

1. Overall, still a very good business with good
   returns Margins 30 to 40 in successful
   Centers
2. More need to plan projects with large margins of
   safety
3. 25 of ASCs are owned in part by a management
   company Deutsche Bank

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ASCs The Next Five Years

• 4) Several macro trends tend to be negative
• Commercial payors consolidate
• Commercial payor pressure on out of network
• Less growth in truly independent doctors
• Increased employment of physicians by hospitals

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ASCs The Next Five Years

• 4) Several macro trends tend to be negative
• More economic pressure on Federal government
• Specialty Hospital Development faces legislative
  challenges ASCs should not allow physician
  owned hospitals to swing in wind
• Medicare reimbursement changes
• Higher acuity good
• Lower acuity negative

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ASCs The Next Five Years

• 5) Greater pressure to be
• Good focused operator
• Projects with great Margin of Safety
• Some diversity
• Payors
• Doctors
• Procedures
• Suppliers
• Build on strengths
• 15.1 Physicians per partnership Deutsche Bank
• Remember your mistakes

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ASCs The Next Five Years

• 6) State Specific Challenges
• Out of Network Investigations New York state
  also attacking health plans
• Self Referral Legislation New Jersey

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ASCs The Next Five Years

• 7) Specialty Specific Challenges and Issues
• Ortho
• GI
• Ophthalmology
• Pain
• Spine
• ENT
• Urology

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ASCs The Next Five Years

• Net Revenues per Case VMG Health Intellimarker

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