ASCs: The economics of ASCs

Practice Management

This article is a portion of a book titled "Challenges, Risks and Opportunities in Today's Spine World " edited by Stephen Hochschuler, MD, Frank Phillips, MD, and Richard Fessler, MD. You can find links to the previous chapters at the end of this article.

Outpatient spine surgery has become increasingly common as minimally invasive techniques and pain management evolved. Patients are able to mobilize more quickly after surgery and safely return home within 24 hours after undergoing spine surgery in ambulatory surgery centers (ASC). As a result, spine and neurosurgeons have begun taking appropriate cases into ASCs as a high quality, low cost site of service.

Surgeons have performed spine surgery in ASCs for around 30 years, but it has become more common over the past decade as payers see the benefit of ASCs. In 2010, one of the first studies was published in Surgical Neurology International addressing the economic value of outpatient spine surgery. The study examined data from 26 cases, 14 cervical disc arthroplasty cases in an ASC and 12 in a hospital-based outpatient surgery center. The study found none of the patients had major complications or hospital transfers, and all reported improvement during their first postoperative visits. The disc arthroplasties cost 82 percent less in the outpatient setting than the inpatient setting.

Spinal fusions also have significant savings when performed in the ASC. A study published in 2018 in the Iowa Orthopedic Journal examined 18,386 patients who underwent spinal fusions from 2007 to 2014 and found the 90-day cost was $39,528 in the outpatient setting, compared to $47,330 in the inpatient setting.

In 2015, around 45 percent of the spine cases performed in the U.S. were done in the outpatient setting, and of the 650,000 to 700,000 spine surgeries performed per year, it's estimated around 280,000 to 300,000 are done in the outpatient setting each year. Payers have begun to notice this trend as well and take advantage of the outpatient setting. In some cases, commercial payers are now directing patients into the outpatient setting and providing cost information for both sites of service to encourage members to select ASCs over the inpatient setting for their procedures.

In February 2016, BlueCross BlueShield published an article titled "How consumers are saving with the shift to outpatient care," in which the payer examined 43 million of its commercially insured members under the age of 65 years old. The study authors compared inpatient and outpatient costs for several procedures, including lumbar spine surgeries. From 2010 to 2014, the report found lumbar spinal surgeries shifted toward the outpatient setting, growing from 61 percent in 2010 to 82 percent in 2014.

The report also details an increase in price for the procedures, from $5,269 in 2010 to $8,475 in 2014. When members elected to have outpatient spine surgeries, they saved around $320 in out-of-pocket costs, and over the study period the cost of inpatient lumbar spine surgery increased 7.5 percent while outpatient spine surgery increased 4.3 percent.

The ASC industry has built a reputation on running lean operations, and as the healthcare industry moves toward value-based care, offering a unique opportunity to capture savings. ASCs across the country are poised to take advantage of value-based care opportunities, including bundled payments or pricing, risk-based contracts and accountable care organizations. A March 2018 article published in Neurosurgery examined an array of spinal procedures in the outpatient setting and attributed an annual cost savings of $140 million to the procedures performed in ASCs.

Many of the spine-driven ASCs are founded by physicians and physician groups, and remain an important vehicle to sustaining independence. While consolidation in healthcare, particularly the employment of physicians and specialists, is associated with increased healthcare costs, spine and orthopedic surgeons have been able to largely avoid hospital employment by expanding their practices and adding ancillary revenue sources, including ASCs.

Spine surgeon owners and operators of ASCs can maintain control of the surgical episode and ensure high quality standards of their operating environment. They also have influence over the cost of the case, including implants and instrumentation, and ensure the patients have a great experience from the front desk staff who greet them to the nurses and clinicians who care for them. The staff, nurses and surgical team focus on spine all day, meaning the ASC becomes a high-volume center of excellence. While ASCs receive lower reimbursement for spinal procedures, surgeons can deliver a better procedure and patient experience there.

There are more than 100 spine-focused ASCs across the U.S. today, with several more in development. ASCs present significant economic benefit for spine patients, payers and physicians. As a result, its likely stakeholders will continue to transition spine procedures to the outpatient setting and invest in cutting-edge, spine-focused ASCs.

Previous chapters:

Challenges, risks and opportunities in today's spine world

Spine care - Balancing cost with innovation

What are big data and predictive analytics

Predictive Analytics and Machine Learning

The HSS Spine Care Model, Part 1

The HSS Spine Care Model, Part 2

The Rothman Model, Part 1

The Rothman Model, Part 2

The History of Texas Back Institute

Texas Back Institute, Part 2

Private practice vs. hospital employee: Where we are today and why


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