OR Manager - February 2020 - 25

AMBULATORY
SURGERY CENTERS
Can your hospital survive the growing dominance of ASCs?
O
f the approximately 57 million
surgical procedures performed
annually in the US, it is estimated
that hospital inpatient procedures
(overnight admissions) account
for less than 20% of cases. Many procedures
once performed in hospital outpatient
surgery departments (HOPDs) have
moved to ambulatory surgery centers
(ASCs) over the past 15 years, and the
HOPD share of the total ambulatory
surgery market has dropped from nearly
60% to just 40%.
Currently, there are nearly 6,000
Medicare-certified ASCs nationwide
where more than 23 million procedures
are performed, with total market revenue
exceeding $36 billion. Experts estimate
that approximately half of the procedures
now performed in hospitals can be
moved into ASCs, and total ASC volume
is projected to increase 27% by 2027.
This shift is concerning because approximately
two-thirds of a typical US
hospital's revenue and most of its profit
come from procedural services.
The breakdown of total annual surgery
volume is as follows:
* 23 million ASC procedures
* 12 million office-based procedures
* 11.5 million hospital-based ambulatory
procedures
* 10 million hospital inpatient (overnight
stay) procedures
Patients searching for value are a
big factor in this industry transformation.
In addition, private and government
payers are incentivizing patients
and surgeons to choose ASCs over
hospitals through more reimbursed procedures
and lower copays for patients.
ASCs are projected to achieve $93 billion
in yearly revenue by 2024.
With daunting statistics like these,
what can hospitals do to remain competitive?
This article attempts to answer
this question by examining payment and
ownership models as well as patient
expectations. We also offer a brief strategic
plan for hospital leaders looking to
expand into the ASC market.
What has changed?
On January 1, 2019, the Centers for
Medicare & Medicaid Services (CMS)
started implementing changes that removed
" unnecessary and inefficient payment
differences " between HOPDs and
ASCs. These " site neutrality " measures
are narrowing the gap between hospital
and ASC reimbursement. Traditionally,
ASC reimbursement has been tied to
the Consumer Price Index. As of 2018,
ASC payment rates are now linked to
the same market basket that CMS uses
to adjust hospital reimbursement.
In addition, Medicare copays are increasingly
structured to promote patient
use of ASCs. For example, the copay for
cataract removal is $490 in an HOPD
but only $193 in an ASC. CMS has also
significantly expanded the approved
ASC procedure list to include a dozen
cardiac catheterization procedures, various
neurosurgical procedures, and total
knee arthroplasty.
Although hospitals are now employing
proceduralists to maintain their surgical
volume, many independent surgeons
who once were affiliated with
hospitals are increasingly attracted to
ASCs because of the greater convenience,
efficiency, quality, and patient
satisfaction associated with ASCs. As
ASC owners, they are also seeking additional
income from gainsharing.
How do ASCs differ from hospital
ORs?
ASC patients are typically healthier and
younger than the hospital surgical population,
and they are more likely to be commercially
insured, with private coverage
rates ranging from 41% to 68%. In addition,
with the growth of high-deductible
health plans, more patients opt for surgery
in an ASC to save on costs.
Several operational and clinical factors
make ASCs very different from hospital
ORs.
A 2017 review of 278 multispecialty
ASCs by VMG Health, a healthcare industry
consulting company, found that
the " average " ASC has four ORs and
two procedure rooms and performs
about 5,000 cases per year, garnering
impressive financial results. Commercial
insurance paid for 53% of all cases
and represented 64% of total facility
revenue. However, the financial success
of these facilities also owes a great
deal to the unique ASC environment:
Continued on page 26
AMBULATORY SURGERY ADVISORY BOARD
Jennifer Dickman, DNP, RN, CPN, Director, North Surgery Center,
UPMC Children's Hospital of Pittsburgh, Sewickley, PA
Claire Everson, RN, CNOR, CCAP, Clinical Educator and Consultant,
Bloomfield Hills, MI
Diane Fecteau, MSA, RN, CASC, NE-BC, Executive Director, Maine
Medical Center Scarborough Surgery Center, Scarborough, ME
Cynthia Hess, MSN, RN, FNP-C, RT(R)(CT)(ARRT), Director of Nursing,
Northeast Missouri Ambulatory Surgery Center, Hannibal, MO
Tracy Hoeft-Hoffman, MBA, MSN, RN, CASC,
Administrator, Heartland Surgery Center, Kearney, NE
Beverly Kirchner, BSN, RN, CNOR, CASC, Chief Compliance Officer,
SurgeryDirect, Highland Village, TX
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