What are Ambulatory Surgery Centers?
Ambulatory Surgery Centers (ASCs), also known as outpatient surgery centers, are modern healthcare facilities that specialize in same-day surgical care, including diagnostics and preventive procedures. These centers are focused on elective surgical care where patients are discharged on the same day. ASCs are designed as a cost-effective alternative to hospital-based outpatient surgeries, offering a more streamlined and patient-friendly environment compared to traditional hospitals. This setup allows for greater efficiency, reduced healthcare costs, and often a better patient experience.
Cost Disparity Between Ambulatory Surgery Centers & Hospital Outpatient Departments
Traditionally, outpatient services occur in three settings: hospital outpatient departments (HOPDs), ambulatory surgery centers (ASCs), or a physician’s office. Services commonly provided in HOPDs and ASCs include lab tests, physical therapy, outpatient surgery, imaging, and noninvasive and invasive procedures, such as endoscopies or cardiac catheterizations. The billing practices and negotiated prices for services widely depend on the setting. HOPDs are always the most expensive care setting. A BCBS study found that HOPD procedure prices were, in some cases, up to five times more expensive than if performed in an ASC or physician’s office.
The root cause of this site-of-service cost disparity is the is the separate methodologies used for rate setting under the Outpatient Prospective Payment System (OPPS) and the Physician Fee Schedule (PFS). For services performed in physician’s offices, Medicare pays for units of service under PFS. For procedures performed in HOPDs, Medicare pays a reduced physician’s fee under PFS plus a facility fee established under the OPPs.
For example, outpatient joint replacements performed in an ASC cost 40% less than those performed in a hospital. A colonoscopy screening costs 32% more in a hospital than in an ASC. Although the choice of outpatient site for many services does not impact care, it significantly impacts the amount Medicare and patients pay for a service.
Promoting Lower Cost Settings
Qualifying outpatient procedures continue to be shifted away from Hospital Outpatient Departments to Ambulatory Surgery Centers, which provide a more efficient setting, leading to lower payer costs. Government payers, provider networks, self-funded employer health plans, and other entities concerned with rising healthcare costs are increasingly directing patients toward Ambulatory Surgery Centers.
Embracing the cost advantages of ASCs over HOPDs can significantly support the goals of value-based care. Providers can enhance patient satisfaction, reduce costs, and improve operational efficiency by strategically using ASCs for suitable procedures.
Ambulatory Surgery Centers are a crucial component of the healthcare ecosystem, offering significant cost savings without compromising on the quality of care. By focusing on efficient and specialized care, ASCs provide a more affordable option for both patients and the broader healthcare system.