Ambulatory surgery centers are uniquely positioned in the healthcare industry to increase value and cut costs without compromising patient experience. However, while ASCs' ability to provide high quality care at a lower cost have spurred private insurers and CMS to drive surgical care into the outpatient setting, there are some industry trends that can impede ASC growth.
Increasing supply costs, along with increasing competition among ASCs, present challenges for ASC operators. In a May 21 webinar sponsored by Cardinal Health, Peter J. Mallow, PhD, a health economics, policy and reimbursement adviser for Cardinal Health, discussed how ASCs can tackle the industry's biggest challenges and capitalize on the significant growth opportunities currently available.
Five challenges and opportunities in the ASC market
Both competition and costs have been increasing in the ASC industry. Additionally, regulations and policies in 2019 are turning the tide for ASCs, including site neutral payments, increases in surgical procedures payable to ASCs and inflation-related differentials increasing reimbursement at ASCs.
The ASC market is one characterized by both challenges and opportunities — here are five of them:
1. Healthcare systems are continuing to integrate and expand through acquisitions and new developments. Well-capitalized companies like Envision Healthcare and Tenet Healthcare are investing in the ASC market through acquisitions of ASC developers, which may affect independent physician owners through increasing competition in the ASC market1.
2. High deductible insurance plans continue to be a challenge for ASCs2. Patients may be inclined to shop around for or delay care, which may lead to ASCs having fewer cases.
3. Office-based practices, which are less regulated than ASCs, are performing more procedures, creating competition for ASCs3.
4. Site neutral payments, decreasing administrative burden and lower co-pays and reference pricing are some of the opportunities for growth in the ASC market.
5. With lower infection and readmission rates, ASCs are delivering better outcomes compared to hospitals4. This makes them a desirable option for patients and payers.
"Research has shown that when we adjust for the patient mix and the patient severity, that the ASC continues to be equal or better in outcomes," Dr. Mallow said. "That's why the private insurance companies and CMS are steering patients into the [ASC] site of care."
3 strategies to take advantage of current trends
In light of decreasing payments and increasing costs, there are three areas where ASCs can control costs:
Implementing a digital supply chain management system. Successful supply chain management through a digital system allows clinicians more time for patient care while proactively managing the business and reducing costs.
Optimizing processes. Using informed decision making that strives for zero downtime for the patient through EHRs and other technologies can help ASCs reduce paperwork and streamline operations.
Scaling up without selling out. After controlling costs and optimizing practices, ASCs can partner with external management companies, collaborate with health systems and attract other specialists to increase and enhance the business.
Conclusion
While there are significant challenges facing the ASC industry, surgery centers are uniquely positioned to provide the triple aim of value-based care: high quality care at a low price, while not compromising patient experience.
"Procedures have moved from the inpatient hospital setting to the outpatient department to the ASC — that is moving ever faster as we search to provide lower cost care without suffering any decline in outcomes for the patient," Dr. Mallow said.
To view the full webinar, click here. To learn more about Cardinal Health, click here.
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1. Source: 2018 Ambulatory Surgery Center (ASC) Market: Projected to Increase from $36 Billion in 2018, to $40 Billion by 2020, MarketWatch (2018)
2. Source: Kasier Family Foundation Health Poll; National Health Interview; Advisory Board
3. Source: Dees JR. NCVH 2016; OEIS Conference Survey.
4. Source: Health Serv Insights. 2017; 10:1178632917701025.