If you want to get a sense of what the future of surgery will be in the United States, don’t look inside the walls of hospital; look outside of them.
Over the past few decades, surgical procedures have been increasingly migrating out of the inpatient setting of acute-care hospitals into outpatient settings, particularly ambulatory surgery centers (ASCs). Here are seven facts and figures demonstrating this migration and showing why it is likely to continue for many years to come.
1. Growth of ASCs. In its “History of ASCs,” the Ambulatory Surgery Center Association (ASCA), the national association for ASCs, notes that the first ASC opened in 1970. In 1988, the number of ASCs reached 1,000. By 2014, the number of Medicare-certified ASCs surpassed 5,400, according to the Medicare Payment Advisory Commission.
2. Stagnation of hospitals. On the contrary, as the American Hospital Association’s 2016 TrendWatch Chartbook notes, the number of community hospitals has declined. In 1994, there were more than 5,200 community hospitals. By 2014, that figure was under 5,000.
3. Shift in surgical setting. As the ChartBook indicates, the number of inpatient surgeries has been on a steady decline for the past several decades. According to “Clinical and Cost Implications of Inpatient Versus Outpatient Orthopedic Surgeries: A Systematic Review of the Published Literature,” more than 60 percent of all surgeries performed in the United States in 2011 were performed on an outpatient basis.
4. Expanding list of procedures. A big contributor to the increase in ambulatory surgical volume is the growing number of procedures that can now be safely performed on an outpatient basis, which include spine procedures, total joint replacements, vascular procedures and even some cardiology procedures. Surgeons are able to safely perform these procedures on an outpatient basis in ASCs thanks to advancements in minimally invasive techniques, medical devices and anesthesia/pain management.
According to ASCA, Medicare approved more than 1,500 procedures for ASCs in 1987. That figure rose to more than 2,000 in 1995 and more than 3,500 in 2011.
5. Sustainable model. While ambulatory surgery center reimbursement has been cut by Medicare over the past decade, ASCs have still managed to survive and often thrive thanks to their business model, which emphasizes keeping efficiency high and costs low, all without sacrificing quality. Government and private payers are increasingly focused on moving away from fee-for-service payments and toward some form of value-based reimbursement. ASCs are already in a strong position to succeed as payment systems evolve.
6. Growing appeal of ASCs. If you are seeking more evidence concerning the long-term value and viability of ASCs, a review of recent major transactions in the space tell the story.
Health systems are seeking to align with surgery centers, either through joint ventures or mergers and acquisitions. In 2015, Tenet Healthcare Corp. announced an agreement through which it would eventually become the full owner of United Surgical Partners International (USPI). At the time the joint venture and eventual acquisition was announced, the organizations would have combined ownership interests in 244 ASCs and 16 short-stay surgical hospitals.
Health systems aren’t the only type of organizations that have taken an increased interest in ASCs. In 2016, Envision Healthcare, a physician-staffing and ambulance service company, and AmSurg, a large ASC operator, announced their merger. In early 2017, Optum, a health services company that is part of payer UnitedHealth Group, announced plans to acquire Surgical Care Affiliates, an ASC and surgical hospital provider, for $2.3 billion.
7. Support in the new administration. It looks like ASCs could have a strong supporter in the new presidential administration. U.S. Health and Human Services Secretary Nominee Rep. Tom Price (R-Georgia) once chaired a chain of ASCs in Georgia, according to Modern Healthcare. During his time in Congress, he has been a strong supporter of surgery centers. As ASCA notes, Price is a cosponsor of two pieces of legislation that directly benefit ASCs: the “Ambulatory Surgical Center Quality and Access Act” and the “Electronic Health Fairness Act.”