Ambulatory Surgery Centers: Creating Value through Outpatient Surgery

Thursday, February 6, 2020

Ambulatory Surgery Centers: Creating Value through Outpatient Surgery

In this article, we hear from physicians presenting at the upcoming Orthopedic Value-Based Care conference as they share their perspectives on the future of ambulatory surgery centers. From regulations to reimbursement, we dive into the opportunities and challenges these facilities are experiencing.

Ambulatory Surgical Centers: Creating Value Through Outpatient Surgery

Outpatient surgery has greatly evolved over the last 40 years in the U.S. and worldwide, and with these changes the role of Ambulatory Surgery Centres (ASCs) has greatly expanded. ASCs are now recognized as offering a safe, efficient, and cost-effective model of care. In fact, there is potential for billions of dollars of healthcare savings through use of ASCs.

Dr. Michael Suk, chair of the Geisinger Musculoskeletal Institute and its Department of Orthopaedic Surgery, explains how ASCs created value when it was urgently needed: “In orthopedics, we saw a lot of low-hanging fruit in the disconnectedness of the surgical episode-of-care. When you look at a total episode cost, you see that one-third of the cost goes into some kind of post-acute setting, so we started sending patients home right after surgery. We found out that patients can actually go home safely and that it is actually a good thing for them. And we saved a ton of money by doing so.”

“When we look at clinical outcomes, ASCs have been shown to have equal or better outcomes than some inpatient facilities,” says Dr. Arnaldo Valedon, a fellowship-trained anesthesiologist who has has been a site surveyor for The Accreditation Association for Ambulatory Health Care (AAAHC) for 25 years. “It is my opinion that ASCs will win by a long shot in being able to provide equal or better care at a lesser price.”

Although the ASC model care can bring great value, these facilities face an uphill battle within an ever-changing regulatory landscape. Keeping up with laws and regulations – both state and federal – can feel like an impossible task at times.

“One of the main challenges is that regulation actually trails behind innovation,” observes Dr. Suk. Indeed, ASC regulatory requirements for staffing, hours, beds, and acute care needs do not always accommodate the speed at which innovation is occurring within outpatient surgery. This is because many regulations are designed around operating on the riskiest patients. While planning for worst-case scenarios is always necessary in medicine, the resulting regulatory jungle facing ASCs can slow down progress and stall the implementation of meaningful innovation.

Transfer requirements are an especially sticky regulatory area, especially for independent ASCs. It’s essential to have plans in place to deal with unexpected perioperative complications such as malignant hyperthermia, cardiac arrest, etc. But this is easiest for ASCs who exist as part of an integrative health network, where an ASC might be directly tied to its organization’s Level 1 trauma centre. Independent ASCs, however, can be more challenged to set up a transfer arrangement protocol as local hospitals may not be incentivized to work out an agreement with independent ASCs who are ultimately taking away some of their business.

In some cases, there are other federal regulations affecting physician ownership of ASCs. These regulations are intended to protect the public and prevent inappropriate use. However, it’s important to remember that in some cases physician ownership is acceptable and even wildly successful. Admittedly, it’s a big leap for physicians to go from employees to owners. Firstly, it shifts the scope of necessary knowledge from merely clinical to both clinical and administrative. It also can be a financial leap of faith, with some physicians even using their own homes as collateral during the startup process.

With such high stakes, physician ownership is a subject of intense interest amongst some OVBC 2020 attendees, such as Dr. Scott Sigman: “We are currently converting our hospital-owned surgery center to a physician-owned surgery center, so I'm looking forward to having conversations about this and learning from the diverse panel available at the conference.”

Aside from ever-mounting regulations, reimbursement guidelines for ambulatory surgery centers are also constantly changing and this shows no sign of settling down in the near future. Many professionals report that reimbursement changes, along with the accompanying stress about profitability, are the great challenge of running an ASC.

“To some degree,” says Dr. Suk, “The federal payment structures still largely maintain an inpatient focus. Even though there is some greater degree of flexibility with regard to paying for outpatient total joints, etc. the incentive is still largely to do it in an outpatient setting. I think that is going to change slowly as we get even more evidence saying these surgeries are safe and easy to do.”

Another administrative decision ASCs owners face is regarding accreditation.There are several reasons why receiving accreditation is meaningful for ambulatory surgery centers. Accreditation is a requirement for certain facilities, particularly those that are seeking CMS certification. Other facilities choose to undergo the process for prestige, indicating to outsiders that the facility meets quality standards.

“Medical facilities that really commit to the accreditation process can get very organized by doing so,” notes Dr. Valedon. He stresses that many of the benefits of accreditation actually stem from the process itself, which highlights a huge span of evidence-based clinical practices and administrative guidelines.

From increased regulations to an expanding array of allowable procedures, the ambulatory surgery center scene will continue to change. The field of orthopedics, in particular, is evolving rapidly, with total joints and spine surgery as two of the fastest growing types of outpatient surgeries, as seen by standalone spine surgery centres being built throughout the United States.

Creating greater value is one of the main tasks that lies ahead. “Now that we’ve cracked the nut of post-acute care through outpatient surgery in ASCs, we’re looking for money in areas that are much harder,” says Dr. Suk. “Now we’re getting into preventing readmissions, so we do more things like call patients once they’re home or see them in a same-day clinic rather then sending them to the Emergency Room. But these are successful tactics for a much smaller cohort of the overall picture. At a certain point, we will get to the point of diminishing returns.”

Regardless of current and future opportunities and challenges, it’s clear that extracting the full value from ambulatory surgery centres boils down to meticulous management. In order to be profitable while providing high-quality care, ASCs must be efficient, evidence-based, and select the procedures, medications, and equipment that make excellent care more affordable. Our upcoming Orthopedic Value-Based Care conference will explore the nuts and bolts of exactly how to do that.

Come join the discussion of how to create more value in ASCs at the Orthopedic Value-Based Care conference on Feb 28 to Mar 1, 2010. Listen as leaders of value-based care talk about negotiating better outpatient contracts, preparing for ASC accreditation, and identifying the right surgical candidates for outpatient orthopedic procedures.