Trends in accelerating outpatient migration to ASCs hospital leaders should know
For many years, there has been a steady migration of cases and procedures out of the hospital environment and into outpatient facilities like GI centers and other ambulatory surgery centers (ASCs). Contributing factors have included the development of more advanced clinical technology and improved anesthetics. They have also included physicians becoming more comfortable with minimally invasive approaches to care.
But over the past few years, there have been several developments that have accelerated this. These are likely to further hasten migration to ASCs, says Ralph Lambiasi, Vice President of Partnership Development for PE GI Solutions. “Hospital and health system leaders—particularly those tasked with overseeing their organization’s outpatient strategy—need to understand these trends so they can better assess the impact on their strategy and formulate a plan to remain competitive in the outpatient space,” he explains.
Lambiasi identifies the following as some of the most significant and more recent outpatient surgical trends and developments.
Highlighting Current Trends Driving ASC Migration
Price transparency laws and penalties. Many hospitals have yet to comply with hospital price transparency requirements. PatientRightsAdvocate.org assessed 1,000 accredited hospitals and found that just slightly more than 14% were complying with the transparency rule, according to a February 2022 report. This figure is likely to increase in the coming years, in part because Centers for Medicare & Medicaid Services (CMS) penalties for noncompliance with requirements have increased. The penalty for a full year of noncompliance currently ranges from $109,500 to about $2 million.
“As more prices are published, those consumers interested in shopping for their care and understanding where their copay or deductible may be lower will have more information upon which to base their site-of-service decision,” Lambiasi says. “This plays to one of the core strengths of ASCs: lower costs.”
The “No Surprises Act,” which took effect in 2022, may further spur consumerism, he adds.
Commercial payor preference. The pandemic has motivated commercial payors to consider and adopt site-of-service policies. These are more aggressively pushing patients out of the inpatient settings and have become a driver of migration to ASCs. “Payors are requesting more documentation from hospitals to authorize procedures and prove that the hospital is an appropriate site of care,” Lambiasi says. “It’s becoming much more difficult for hospitals to receive approval for something like a screening endoscopy for a younger, healthier patient. These cases are going to ASCs.”
In 2021, the U.S. Preventive Services Task Force (USPSTF) issued new recommendations for colorectal cancer. These stated that people at average risk should start screening at age 45 instead of the traditional 50. The Affordable Care Act requires most insurers to cover the costs of these screening tests as per USPSTF recommendations. “This new case volume will largely go to surgery centers,” Lambiasi says. “If hospitals want to see these patients within their service lines, it’s time to start thinking about an ASC strategy.”
Federal initiatives. When looking at some of the major federal developments of the past decade, Lambiasi is reminded of Steven Brill’s Time magazine article, “Bitter Pill: Why Medical Bills Are Killing Us.”
“Consider recent efforts to push consumerism, such as accountable care organizations, various Affordable Care Act initiatives, the exchanges and transparency laws,” he says. “I think CMS and the federal government are trying to avoid more sticker shock to patients.”
Lambiasi believes there will be more similar initiatives down the road. “We already have site neutrality for some surgical procedures where the hospital and ASC are paid the same rate. Are screening endoscopies or other elective GI cases ripe for site neutrality? If a development like this occurs and you’re a hospital lacking an ASC strategy, expect to experience difficult financial and operational ramifications.”
COVID-19 and Migration to ASCs
Additional COVID-19 effects. The pandemic is likely to encourage more migration of care to ASCs—and not just because of commercial payor efforts. During periods of high COVID hospitalizations, hospitals were focused on caring for these patients. Additionally, they were providing more emergency and urgent care. This naturally led to non-urgent patient volume going to outpatient settings. It will be difficult for hospitals to slow this momentum.
In addition, hospitals have become less appealing sites for care for patients, Lambiasi says. “Whether right or wrong, that’s going to be the perspective and bias of many patients who now associate hospitals with people sick with COVID—especially with the uncertainty around future waves.”
Then, there are the financial and personnel effects of COVID, which are being felt in every industry, including healthcare. “Perhaps before the pandemic, hospitals may have had the capital and staffing levels to consider ways to expand their outpatient portfolio and try to capture some of the surgical volume making its way to ASCs,” Lambiasi says. “That may no longer be the case, with hospital efforts more focused on returning to pre-pandemic levels of operation and accepting that some surgical cases, especially lower-acuity procedures, are not a priority with respect to new capital initiatives.”
That doesn’t mean hospitals should abandon their pre-pandemic outpatient strategy, he says. Rather, they may need to consider different approaches that will help them achieve their goals.
The Effect of MSOs
Physician alignment with management services organization (MSO) rollup groups. There is a rapidly growing trend that could siphon more surgical cases out of hospital operating rooms. This is the trend of physicians deciding to sell to and/or align their practices with MSO rollup groups. Such groups have become the top alternative to hospital employment in the eyes of many private groups, Lambiasi says. “The MSO could be a ‘double whammy’ for the hospitals. They would lose the opportunity to employ the physician looking to leave private practice and would most likely lose case volume to the competing ASC that the MSO-sponsored entity owns or would build.”
Despite Challenges, ASC Opportunities Exist for Hospitals
The rapidly-evolving surgical landscape makes it clear: Hospitals and health systems need a strong outpatient portfolio; one that includes ASCs and physician partnerships. “Inpatient-to-outpatient surgical migration shows no signs of slowing down, and with an aging population, the demand for surgery is rising,” Lambiasi says. “Without such a portfolio, a hospital will likely struggle to retain surgical volume and miss out on what’s becoming an even more significant piece of healthcare.”
Hospitals uncertain about establishing or growing an ASC portfolio are looking to experts to help them make intelligent development decisions. They also look to them to facilitate the partnerships with physicians needed for outpatient surgery success. “At PE GI Solutions, we’re engaging in more discussions and entering into more partnerships with hospitals and health systems,” Lambiasi says. “We’re helping these organizations overcome their pain points and solve the multitude of challenges they’re facing today and likely to face in the coming years.”
Lambiasi expects such collaboration with hospitals to become a more substantial part of the SCA Health business model going forward. Among the ways the company is collaborating with hospitals and health systems: strengthening engagement and relationship with GI physicians. Identifying opportunities to add ASCs to their portfolio. This can be through HOPD-to-ASC conversions, joint ventures with physicians or building de novo facilities. These initiatives support the creation of endocenters. These are the cornerstones for gastroenterology service line integration and growth. They also contribute to the development of long-term plans to account for the continued outmigration of care. “We are bringing hospitals our years of experience and expertise in the ASC and GI space,” Lambiasi says.