I'm pretty sure I saw some folks squirming in their seats and bowing their heads in shame when the Wall Street fellow at the podium began to tsk-tsk out-of-network and under arrangements billing, two reimbursement gimmicks that have drawn the ire of federal regulators and the attention of private payors — and gotten a few folks rich quickly, often at the expense of patients, the healthcare system and those of you who choose to play it straight.

"These are toxic elements that defy basic industry fundamentals," says Darren P. Lehrich, managing director of healthcare providers equity research for Deutsche Bank Securities in New York City. "They're likely to get weeded out by the market."

We were in Hollywood, Fla., last month for law firm McDermott Will & Emery's 2008 ASC Symposium, a swap meet of sorts for the mergers and acquisitions crowd. Wall Street's View of the ASC Sector by Mr. Lehrich was first up on the program. That meant PowerPoint slides on leveraged buyouts, valuations, same-store volume growth ... and what time is that morning coffee break? The room and Mr. Lehrich perked up when he discussed reimbursement gimmicks. He chided the audience: "You're supposed to be the low-cost provider."

It's not that Mr. Lehrich is against free enterprise and healthy profits, only that he views unsustainable pricing models and margin structures as ludicrous and ruinous to an otherwise vibrant industry.

Sustainability. For Mr. Lehrich, that is the litmus test. If how you're billing isn't sustainable, he says, then it's not worth doing, because eventually market powers will curb bastard pricing practices.

"Do you think Warren Buffett would be tempted to invest in a surgery center with 60 percent margins? I think not," he says. "You need to be able to discount cash flow based on a normal, sustainable profit margin. Any surgeon who's tempted to believe that those margins are sustainable isn't thinking clearly.

"This industry was born out of the concept that it's a more productive setting for surgeons and a more comfortable setting for patients," he adds. "Play to that strength as opposed to letting unsustainable pricing by some players hurt the long-term pricing."

So while the shameless few profit and satisfy their greed, their blinding desire to pay down center-level debt or their urge to spite managed care, the rest of you could suffer negative consequences when third-party payors tighten the screws. Mr. Lehrich's own research (see "Trends in the ASC Sector" on page 12) points to rising consumerism and slowing volume growth as reasons why surgery centers should brace for greater pricing transparency and competition. Gouging the system isn't a good way to prepare for that. It's not sustainable.