Ambulatory Surgical Centers
Improving Clinical Outcomes and Lowering Cost
Ambulatory Surgical Centers (ASCs)
• Integral component of U.S. healthcare delivery system
– 40% of outpatient surgeries performed in ASCs
– Patient access through over 5,000 facilities in nearly every state
• High quality care
– Superior patient outcomes
– Low infection rates
– Comprehensive regulatory standards
– 92% patient satisfaction
• Committed to transparency
– Worked with CMS to develop quality measures
– Voluntary public reporting of outcomes data at www.ascquality.org
• Savings opportunity
– 56% savings to beneficiaries; 41% savings to Medicare
– Shifting just 50% of outpatient procedures from hospitals to ASCs would save
Medicare an additional $2.3 billion
Note: Sources appear in detailed footnotes on later slides.
2
5130 ASCs Across The U.S.
17
224
16
15
54
77
56
15
57
91
84
19
25
47
52
45
687
103
119 123
64
224
198
11
51
21 (NH)
60 (MA)
11 (RI)
45 (CT)
209 (NJ)
25 (DE)
348 (MD)
4 (DC)
35
108
77
148
50
149
23
65
64
65
351
36
258
73
383
9
12 (HI)
25 (PR)
2 (GU)
Source: September, 2008, Medicare Provider of Service file.
3
Many Hospitals Own ASCs
• Hospitals have ownership interests in over 1000 ASCs
Corporate
Only, 7%
Corporate, Hospital
& Physician, 2%
Corporate &
Physician, 10%
Hospital Only, 2%
Hospital & Physician,
16%
Source: 2008 ASC Association Salary and Benefits Survey.
Physician Only, 63%
4
56% Savings to Beneficiaries
Five Highest Volume ASC Procedures
HCPCS
Code
Description
HOPD
Copay
ASC
Copay
% Savings
at ASCs
66984
Cataract Surg w/iol, 1 Stage
$495.96
$192.94
61%
43239
Upper GI Endoscopy, Biopsy
$143.38
$78.41
45%
45378
Diagnostic Colonoscopy
$186.06
$79.77
57%
45380
Colonoscopy and Biopsy
$186.06
$79.77
57%
66821
After Cataract Laser Surgery
$104.31
$51.72
50%
Note: Savings based on 2009 national Medicare rates weighted by 2007 Medicare ASC case volume data for top 5 procedures. Copay amounts
are national unadjusted rates.
5
41% Savings to Medicare
2009 ASC Rates as % of HOPD Rates
100%
80%
60%
Avg. = 59%
40%
20%
0%
Source: ASC Association Analysis of 2009 Medicare ASC Payment Rates.
6
Huge Potential Savings Still Available
• 57% of outpatient surgeries still performed in hospitals1
o $2.3 Billion savings to Medicare if just half of those surgeries were
moved to the ASC setting2
• Reciprocally, if all ASC services were performed in hospitals,
Medicare expenditures would increase by $2.0 Billion in 20093
(1) Cullen KA, Hall MJ, Golosinskiy A. Ambulatory Surgery in the United States, 2006. National health statistics reports; no 11. Hyattsville, MD:
National Center for Health Statistics. 2009. Only looks at surgeries performed in a facility setting.
(2) Based on 2006 Medicare HOPD case volume data and 2009 national Medicare rates.
(3) Based on 2006 Medicare ASC case volume data and 2009 national Medicare rates.
7
Superior Patient Outcomes at ASCs
• ASC patients less likely to require unscheduled follow-up care
at ER or hospital within 7 days of surgery
Rate Per 100,000 Procedures
Risk-adjusted Rates of ER Visit or Hospital Admission
500
450
400
350
300
250
200
150
100
50
0
ER Visit, 0-7 Days
Hospital Admission, 0-7 Days
ASC
HOPD
Source: Fleisher LA, Pasternak LR, Herbert R, Anderson GF. Inpatient hospital admission and death after outpatient surgery in elderly patients:
importance of patient and system characteristics and location of care. Arch Surg. 2004 Jan;139(1):67-72.
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Low Infection Rates in ASCs
• A recent national survey showed more than half of ASCs have
infection rates of 0
Post Surgical Wound Infection Rates Per ASC
60%
56%
Percent of ASCs
50%
40%
30%
19%
20%
15%
10%
7%
3%
2%
0%
0
.00001-.0005 .00051-.0015 .00151-.003 .0031-.0075 .00751-.015
Post-Surgical Wound Infection Rates Per Patient Encounter
Source: 3rd Qtr 2008 ASC Association Outcomes Monitoring Project.
0%
>.015
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Comprehensive Regulatory Standards
Surgical services
Anesthesia services
Infection control
Quality assessment and performance improvement
Medical staff
Nursing services
Physical environment
Patient rights
Radiologic services
Pharmaceutical services
Laboratory services
Governing body
Medical record services
Effective May 18, 2009.
Source: 42 CFR 416.
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Committed to Quality & Transparency
• Industry took initiative to obtain National Quality Forum
(NQF) endorsement of facility level clinical quality measures:
1.
2.
3.
4.
5.
6.
Hospital transfer / admission
Wrong site / side / patient / procedure / implant
Falls
Burns
IV antibiotic timing
Surgical site hair removal
• Voluntary public reporting of clinical quality data in 2009
through ASC Quality Collaboration
• Seeking patient access to side-by-side comparison of ASC and
HOPD quality scores on comparable measures
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92% Patient Satisfaction
Outpatient Surgery Satisfaction by Facility Type
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Independent ASCs
Hospital Affiliated,
Onsite ASCs
Hospital Affiliated,
Freestanding ASCs
Source: Press Ganey Outpatient Pulse Report 2008. Represents the experiences of 1,039,289 patients treated at 1,218 facilities nationwide
between January 1 and December 31, 2007.
12
ASCs Support Public Health Needs
• Increase in colonoscopies during last decade is one of very
few areas where the Healthy People 2010 goal is being met
• Still, 49% of Medicare age population has yet to have the
recommended colorectal scope procedures
Ever Had Recommended Colorectal Scope Procedures
65 Years
And Over
Yes
0%
10%
20%
30%
Not Yet
40%
50%
60%
70%
80%
90%
100%
SOURCE: Centers for Disease Control and Prevention, National Center for Health Statistics, National Health Interview Survey.
Note: Healthy People 2010, started in January 2000 by the United States Department of Health and Human Services, is a nationwide health promotion
and disease prevention plan to be achieved by the year 2010.
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Increasing Need for ASC Services
• Aging population will require increasing access to services
provided by ASCs, such as cataract surgeries
U.S. Residents With Cataracts (Millions)
Projected U.S. Residents With Cataracts By Age Group
35
30
25
80+
20
75-79
15
70-74
65-69
10
5
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Sources: Eye Diseases Prevalence Research Group (Archives of Ophthalmology 2004; 122:487-494) and U.S. Census Bureau, Population
Division, Interim State Population Projections, 2005.
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Payments Decreasing in GI and Eye
Medicare Payment Changes, Five Highest Volume ASC Procedures
Cataract Surg
w/iol, 1 stage
Upper GI
Endoscopy, Biopsy
Diagnostic
Colonoscopy
After Cataract
Laser Surgery
Colonoscopy and
Biopsy
% Change Relative to 2007 Rate
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
2008
2009
Fully Implemented
Note: Based on 2009 national Medicare rates sorted by 2007 Medicare ASC case volume data.
15
HOPD Payments Are Increasing Faster
$800
Medicare Payment for Diagnostic
Colonoscopy
HCPC 45378
Actual
$750
Projected
HOPD
$700
• Other system elements are
driving further gaps between ASC
and HOPD payments over time
$650
o 6 year payment freeze
$600
o Two different inflation factors
$550
o Two different wage indices
$500
o Application of secondary weighting
factor
$450
ASC
$400
$350
$300
2004
2006
2008
2010
2012
Sources: Historical ASC and OPPS rate info from CMS. OPPS projections based on the historical OPPS relative weight for HCPC 45378 and inflated
using CBO’s projected market basket increases for 2010-2013. ASC projected rates apply CBO’s projection of the CPI-U based on application of CMS’
estimated scaling factor from fully implemented payment rates for 2009.
16
Same Inflation Drivers As Hospitals
Percent of Total Costs
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
ASC
HOPD
Labor
Supply
Other
Sources: Underlying dataset constructed from publicly available 2008 3rd Quarter earnings announcements of major hospital chains and
the Foundation for Ambulatory Surgery in America 2007 ASC Financial Benchmarking Survey.
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Growth in # of ASCs Slowing
Recent Decline in Growth of ASCs
10%
Year-on-Year ∆ in # of ASCs (%)
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
2005
Source: September, 2008, Medicare Provider of Service file.
2006
2007
2008
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Medicare Needs Efficiency of ASCs
• Impeding surgeon shortage will diminish access to clinically
necessary procedures
Surgeons Per 1,000 People 65 and Older
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2000
2005
2010E
2015E
2020E
Source: Physician Supply and Demand: Projections to 2020 U.S. Department of Health and Human Services Health Resources and Services
Administration Bureau of Health Professions October 2006 and Census.gov.
19
MedPAC: Increase Payments for ASCs
“It is vital that ASCs be paid adequately to
ensure that beneficiaries continue to have
access to this option.”
Source: MedPAC’s March 2009 Report to the Congress: Medicare Payment Policy.
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Recommendations
• Ensure ASCs continue to generate savings for Medicare
program
o Tie ASC reimbursement directly to HOPD
• Ensure transparency for clinical quality
o Implement comparable measures for HOPD and ASC and report sideby-side
21