Ambulatory Surgery Centers Decrease Costs by $38 Billion

June 17, 2016 - Health payers are often looking for ways to reduce healthcare spending, especially with regard to the costs of covering medical claims. Many have focused on implementing value-based care reimbursement structures like bundled payments while others have partnered with accountable care organizations or patient-centered medical homes. One aspect that payers may need to consider is partnering with ambulatory surgery centers (ASC) instead of hospital outpatient departments.

According to a press release from the Ambulatory Surgery Center Association, one study conducted by Healthcare BlueBook and HealthSmart discovered that ambulatory surgery centers decreased the cost of outpatient surgery by $38 billion on annual basis since these facilities offer a lower cost site of care when compared to hospital outpatient departments.

The study was completed using the compilation of multiple private health insurance claims from around the nation. Researchers used commercial claims data from 2014. The claims represent more than 400,000 patients from across the United States. The analysts looked at the most common procedures and compared costs between ambulatory care settings and hospital settings.

Additionally, the study adjusted for the fact that some patients are at higher risk and it may be more suitable to have their operation performed through a hospital outpatient department. The conclusion from the study is that ambulatory surgery centers cost much less for the same, exact procedures than hospital outpatient departments regardless of which payer’s claims are analyzed.

“The analysis highlights how important it is for both employers and consumers to understand the large differences in local in-network prices,” Healthcare Bluebook’s Chief Executive Officer Jeff Rice said in a public statement. “Both the employer and consumer can realize substantial savings by better utilizing the lower cost ASC providers in their existing networks. By using transparency tools like Bluebook, consumers can understand price differences, compare providers and get better value for their healthcare dollar.”

The Ambulatory Surgery Center Association, which holds a membership of more than 5,400 outpatient surgery facilities, contributed expertise to the study as well. Additionally, the study found that patients had lower out-of-pocket costs due to decreased deductibles and coinsurance rates when using ambulatory surgery centers. In fact, out-of-pocket costs drop $5 billion on a yearly basis when these facilities are utilized.

In one particular city, the savings in out-of-pocket costs were significant, the researchers found. Cataract patients living in Charleston, West Virginia who purchased a silver plan on the health insurance exchanges would be able to save $566 in out-of-pocket spending if they receive their treatment at ambulatory surgery centers.

“We need a health care industry commitment to finding and using the lowest cost site of service,” Tom Kelly, Chief Executive Officer of HealthSmart, said in a public statement. “For employees and employers saddled with higher co‐pays and insurance costs, knowing the lowest‐cost providers in their community will have a big financial impact.”

Health payers would be wise to educate their consumers about the value of ambulatory surgery centers when it comes to reducing out-of-pocket expenses. This is especially important since the study found that only 48 percent of procedures that could be safely conducted in ambulatory surgery centers were actually performed in these facilities.

The researchers outline that if the rest of these procedures - 52 percent - were performed in the ambulatory care settings, an extra $41 billion in healthcare costs could be reduced yearly.

There are key strategies that ambulatory surgery centers may need to consider incorporating in order to have a stronger revenue cycle. First, it is important for these healthcare organizations to incorporate data analytics in their EHR functionalities.

“Within our practice we have an EHR that we’ve been using for a long time across our offices. The system has been helpful to our providers in knowing patient history and providing quality care. EHRs themselves definitely go a long way in improving patient care,” Dr. Scott Ketover, the President and Chairman of the Board of Digestive Health Physicians Association (DHPA) as well as the President and CEO of Minnesota Gastroenterology, told EHRIntelligence.com.

“However, for most clinics and hospitals, the meaningful use requirements are a significant administrative burden that has yet to prove any benefit to patient care. This is just one example of why the rollout of meaningful use has been plagued with timeline changes and come under such scrutiny.”

Additionally, for any new systems that are implemented to manage revenue and medical billing, staff members operating these tools will need extensive training.

Those without the training to submit claims accurately will lead the organization to have a multitude of claim denials, which will negatively impact revenue. Wasting time and money is a dangerous proposition for any medical facility, which means staff will need to be trained in any new medical billing systems.

Health insurance companies would be wise to include ambulatory surgery centers in their provider network and encourage their consumers to utilize these facilities when in need of outpatient procedures such as endoscopies or colonoscopies. The results speak for themselves. Ambulatory surgery centers were found to reduce healthcare spending significantly when compared to hospital settings.

“The physicians and nurses providing care in ambulatory surgery centers, as well as the millions of patients they have treated, have long-known that ASCs provide a high-quality, low-cost site for outpatient procedures,” William Prentice, chief executive officer of ASCA, stated in the press release. “This study is solid evidence that consumers, policymakers, insurers and employers need to take fuller advantage of the exceptional healthcare value offered by ASCs."

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