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ASCs could save $10.5B with 80% penetration in 50 largest US cities: 5 key trends

Franklin Trust Ratings released a new benchmark study of surgical procedures in the top 50 largest U.S. cities, showing a significant savings for ASC-based procedures.

The report covered 16 million high volume outpatient surgical procedures performed at hospitals and ASCs in the 50 states analyzed. The study compared cities with a "benchmark" city that assumed 80 percent ASC market penetration.

Report authors noted more complex procedures are shifting from the hospital to the outpatient setting, and last month CMS asked for comment on paying for outpatient total knee and hip procedures.

The study found:

1. There is a potential for $10.5 billion in consumer savings if all of the cities studied delivered care at the same mix as the benchmark market.

2. Seventy-two percent of the top 50 markets are early and mid-stage markets, which pose financial risk for hospitals as ASCs develop and care move to the lower cost setting.

3. ASCs dominate market share in the advanced markets while receiving around half of the reimbursement of hospital outpatient surgical care.

4. The service line mix for procedures is varied and unrelated to the market size, rates and maturity.

"We're seeing the symptoms of an immature market nationally," said John Morrow, managing director of Franklin Trust Ratings. "As payment reforms collide with consumer sentiment, and technology pushes outpatient care to new limits, lower-priced outpatient care is disrupting traditional care models. Hospitals and their planners need to learn the stage of their market and respond."

5. Hospitals in the top 50 largest cities stand to lose $23.9 billion in revenue if these procedures shift to the lower cost ASCs. ASCs would see a $13.4 billion benefit if the procedures shifted to ASCs.

The markets that stand to gain the most consumer savings by a shift to outpatient ASCs include:

• Cleveland: $1 billion
• New York: $1 billion
• Chicago: $943.8 million
• Boston: $909.5 million
• Long Beach, Fla.: $619.9 million

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