5 Surgery Center Specialties Predicted to Grow in 2011
1. Spine. Spine is currently one of the most attractive specialties for ASCs, according to Naya Kehayes, managing principal and CEO of Eveia Health Consulting & Management. Data from Healthcare Appraisers' 2010 ASC Valuation Survey backs up her claim: According to responding ASC companies, orthopedic spine is the second-most desirable specialty in ASCs. She says the migration of laminectomies and the growing interest in anterior cervical discectomy and fusion will present a great opportunity for spine centers as more insurance companies feel comfortable moving the cases to ASCs. "Some payors are even open to the potential of surgery centers discharging bigger spine cases to skilled nursing facilities," she says. "If there's a contractual relationship with an in-network skilled nursing facility that can be aligned with a surgery center, some payors are open to that discussion."
Goran Dragolovic, senior vice president at Surgical Care Affiliates, agrees that spine will see more attention over the next few years as minimally invasive procedures advance. "We believe we have just scratched the surface of [minimally invasive spine]," he says. He says in order to move minimally invasive spine into the ASC, surgeons must be comfortable moving their cases into the outpatient arena. "We are seeing that orthopedic surgeons as a totality are moving at a more rapid pace than neurosurgeons, but we have also seen an increased openness in neurosurgeons in bringing cases to our facilities."
Joe Zasa, managing partner at ASD Management, says an ASC planning to add spine should be ready to go through all its contracts and ensure the appropriate codes and carve-outs are included. "You can still do [spine cases] in the surgery center, but you've got to set fees for them that are appropriate and market-driven," he says.
2. Orthopedics. Mr. Dragolovic says CMS' decision to transition ASC reimbursement methodology from the grouper methodology to HOPD APC rates has introduced procedures not previously covered in the ASC by Medicare. According to the Healthcare Appraisers' survey, general orthopedics is the most desirable specialty for ASC companies, with 94 percent of respondents approving of orthopedics. "Number one, it has opened the door to a large number of procedures that were not permitted to be done in the surgery center, and secondly, it has started to remedy some of the reimbursement inequities for some procedures," he says. One of the specialties to benefit from this transition is orthopedics. Today, arthroscopies and ACL reconstruction in orthopedics pay more appropriately to ASCs than in the past. Mr. Zasa also predicts that partial knee replacements will move into ASCs as they sit on the "cutting edge" of the specialty.
Ms. Kehayes predicts that the transition of these procedures into ASCs will depend in part on the relationship between the payor and the local hospital. "When you pull these higher acuity types of cases out of a hospital setting, this poses some concerns to insurance companies in certain markets about whether the hospital is dependent upon those types of surgeries for their sustainability," she says. "At the end of the day, the insurance company needs the hospital in their network in order to sell insurance and provide all services in their network to their members." She says this issue applies to procedures such as total joint surgery, spine surgery and any cases that represent a large revenue stream to hospitals, which may become more attractive to ASCs as technology advances.
3. Bariatrics. The FDA's decision to lower the patient body mass index necessary for bariatric surgery was one of the biggest developments for ASCs in the past 12 months, Mr. Dragolovic says. Previously, the FDA recommended Lap-Band surgery for healthy patients with a BMI or over 40 or a BMI or 35 with at least one co-morbidity. The recommendation has now been altered to include patients with a BMI of 30 or above with at least one co-morbidity. According to Allergan, the company that manufacturers the Lap-Band, approximately 37 million Americans have a BMI of 30-40 with at least one co-morbid condition.
"This basically has expanded the market [of weight-loss surgery patients] by 11 million people, and it has expanded the right segment of the market," Mr. Dragolovic says. "ASCs are suited well to perform Lap-Bands on people who did not have a tremendous amount of complicated co-morbidities." In other words, ASCs can safely perform Lap-Band surgery on less obese patients, whereas more obese patients may pose risks that require surgery to be performed in a hospital setting. Mr. Dragolovic predicts surgery centers — especially those that already provide weight-loss surgery — will profit significantly from the market expansion.
4. OB/GYN. While OB/GYN ranked low on the Healthcare Appraisers survey for desirability in 2010, Ms. Kehayes believes OB/GYN presents a significant opportunity for surgery centers that can move vaginal and total hysterectomies out of the hospital setting. "Vaginal hysterectomies are a little easier for surgery centers to do, but total hysterectomies are not out of the question," she says. Total hysterectomies are more likely in the ASC setting if the center is located in a state with extended recovery care or 23-hour care, she says. If a surgery center already books a large number of OB/GYN cases, Ms. Kehayes recommends talking to surgeons about whether they would be comfortable bringing hysterectomies to the center. "If the answer is yes, go to the payors and talk to them about it," she says. "It could be a win-win to move hysterectomies out of the hospital."
Mr. Dragolovic says OB/GYN has also benefited from the move to HOPD APC rates, as hysteroscopies and laproscopies have become more profitable for surgery centers.
5. ENT. Ms. Kehayes continues to see a progression of cochlear and BAHA implant procedures into ASCs, although she says BAHA procedures are moving more quickly. She says while these procedures may be approved for the ASC setting, the biggest challenge may be convincing physicians to move these cases when appropriate. "As CMS has approved some of these bigger cases, like cochlear and BAHA, a lot of [the task] is educating the physicians to ensure they are paying attention to the full gamut of codes that are now approved." She says she is regularly surprised by how many ASCs do not pay attention or realize the opportunity that may exist with newly-approved codes.
She recommends ENT centers talk to their ENT physicians and let them know that cochlear and BAHA implants are now on the ASC approved list and can be performed in the center. If physicians are interested in moving the cases over from a hospital, payors should be willing to work with the center because these cases often result in a meaningful cost savings. Contracts may need to be negotiated if they historically were not set up with adequate rates for these services. The 2010 Healthcare Appraisers' survey reports that 76 percent of responding ASC companies felt ENT was a desirable specialty, making in the fourth most popular on the list.
View the Healthcare Appraisers survey (pdf).
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