Ambulatory Surgery Centers Could Save Private Payers $3B

December 18, 2020 - Payers may consider promoting ambulatory surgery centers as the ideal site of care for joint replacement surgeries, UnitedHealth Group’s recent research findings suggested.

“Findings from new UnitedHealth Group research underscore the importance of optimizing sites of care to improve patient safety and reduce costs,” the report summarized.

The study analyzed data 2018 and 2019 procedures conducted at Optum’s ambulatory surgery centers. The researchers used low- and medium-severity surgeries to from the baseline and gauge shifts in costs and savings. They used the Ambulatory Surgery Centers Quality Collaboration’s recommended outcome measures to assess quality of care.

UnitedHealthcare’s company Surgical Care Affiliates has more than 230 ambulatory surgery centers that conducted at least 25 joint replacements in 2019 for every 1,000 patients who had a hip or knee replacement in 2018 or 2019.

The centers found that 99.3 percent of patients had no infection and no hospital visit post-surgery. The remaining 0.7 percent of patients went to the hospital within 24 hour of discharge—though this could indicate an underlying condition—or developed an infection.

If more patients received joint replacement surgery in an ambulatory surgery center, then over 500,000 patients would not have to stay overnight after the procedure, the UnitedHealth Group study found.

Furthermore, using an ambulatory surgery center for joint replacement could result in $2 billion in cost savings for private payers and $1 billion in cost savings for federal payers, including Medicare.

In particular, members who need hip replacements could benefit from using an ambulatory surgery center. The cost is 20 percent lower in both commercial payer business and in Medicare for payers to cover an ambulatory joint surgery as opposed to a hospital procedure.

Knee replacements also saw a decline in costs. Commercial payers and Medicare payers would pay 17 percent less for an ambulatory surgery center procedure.

One of the major challenges in joint replacement procedures is ensuring that patients do not acquire infections during their inpatient stays. Around 26,000 patients annually have to receive extended treatment after their joint surgery to treat an infection. Up to 800 patients per year lose their lives to these infections.

“Many joint replacement patients do not require hospital inpatient stays,” the report stated.

“Because ASCs specialize in the procedures they perform, they can concentrate on optimizing safety and quality outcomes for patients. ASCs with established joint replacement programs are operating safe, scalable models that achieve high-quality results for knee and hip replacement surgeries.”

Achieving excellent results in joint replacement programs requires specialization, the report emphasized. Ambulatory surgery centers must also be able to repeat and scale the procedure.

Additionally, UnitedHealth Group recommended rigorous advance planning. The researchers suggested outlining a care pathway for joint replacement at ambulatory surgery centers that encompasses pre-operative preparation all the way to post-discharge planning.

The researchers also recommended that providers operate in a team and that the operating rooms be customized for the surgical team.

Helping members select the appropriate site of care is key to lowering healthcare spending overall.

For instance, the cost of administering specialty drugs could be $4 billion less per year if members avoid receiving the drugs in a hospital setting, a previous UnitedHealth Group report discovered.

Hospitals charged more for specialty drug administration both on the hospital premises and in hospital-owned provider practices when compared to independent practices.

Joint replacements also present an excellent opportunity to lower overall healthcare spending and improve outcomes using value-based reimbursement, which is why payers have developed bundled payment strategies around these procedures.

For example, Humana expanded its value-based payment models in mid-2019 to include four agreements for spinal fusion surgeries as well as total joint replacements.

The press release noted that the episode-based payment model sought to improve quality of care, patient outcomes, and healthcare spending.

More recently, Humana launched another two value-based care programs, one of which focused shoulder surgeries at ambulatory surgical centers.

"The Total Shoulder Specialist Rewards Program provides clinicians data and analytics, and offers the opportunity for additional payment for achievement of two program goals,” the press release stated.

“One is to realize better health outcomes. The other is to lower costs derived from site of care selection, which incentivizes independent surgeons to perform shoulder replacement procedures at ambulatory surgical centers when clinically appropriate.”

Research such as UnitedHealth Group’s findings on ambulatory surgery centers can be vital to guiding payers’ evolving value-based care strategies and decreasing healthcare spending.