Are Surgery Centers Recession Proof?

A recession is a decline in a country’s gross domestic product (GDP), or negative real economic growth, for two of more successive quarters of a year. Recessions are characterized by declining employment, investment activity and profits. This activity, along with sharply rising prices like we are seeing at the gas pumps, is also known as stagflation. The question is, what effect will these changes in the economy have on your ambulatory surgery center (ASC) or hospital?

Unfortunately, there is not enough historical data on hospital profitability or patient census data during recessionary times that relates to today’s changed healthcare environment. Surgery centers have only been around since 1970 and specialty hospitals as we now know them have only been in operation for the last 15 years. To answer this question, we will have to rely on other trends, facts and sources of information.

The common belief is that healthcare facilities are recession proof because people get sick regardless of the financial condition of a country. Some would say that even more people get sick during difficult financial times due to stress created by financial concerns.

The first step for me was to look at statistics from some of the leading ASC and specialty hospital organizations in the United States. None of these companies reported significant drops in case volume over the third or fourth quarter of 2007. To verify this information, I reviewed statistics from our own organization as well as several private sources of information and found that while there were some seasonal trends and some blips on the radar, there was no real recessionary trend apparent in the industry.