1. Inadequate Medicare reimbursement. Five years ago, Medicare reimbursement for a procedure performed in a surgery center averaged 15 percent less than Medicare reimbursement for the same procedure performed in a hospital outpatient department. Today that gap has grown to 42 percent. With the differential having become that large, some hospitals that might otherwise have become joint venture partners in surgery centers have elected instead to purchase the centers and convert them to hospital outpatient departments.
The result, of course, is higher costs to the Medicare program and to patients. Furthermore, the Independent Payment Advisory Board and other features of the Accountable Care Act, coupled with broader pressures to reduce the cost of Medicare, may further jeopardize the adequacy of Medicare reimbursement. Pressure on Medicare rates tends to lead to pressure on commercial payor reimbursement as well, so the effect is amplified across a broad spectrum of payors.
2. Hospital employment of physicians is increasing rapidly. In some markets, hospitals now employ more than 90 percent of the primary care physicians, and employment of surgeons exceeds 40 percent. This is having a major impact on surgery centers’ efforts to recruit surgeon investors and utilizers.
3. The pool of surgeon investors also is shrinking for demographic reasons. There are fewer uncommitted surgeons than ever before, as well as fewer people entering medical school. The number of surgeons per capita is dropping, and the average age of surgeons is rising.
4. If we don’t convince Congress and regulators that the quality of care in the ASC setting is superior, or at least equal, to that of the hospital, then we won’t be successful in positioning our industry as an acceptable alternative to the hospital outpatient department. Knowing this to be true is one thing; proving it is another.
How these issues play out will be of great interest to us all. We can be reasonably confident of at least three things in the near to middle term, though. First, if there’s opportunity for progress on items 1 and 4, the industry is aligned to make it happen. Second, today’s issues won’t all be tomorrow’s issues (for better or worse). Third, lack of political power is marginalizing our industry at the very time that the country needs us and demands us to do what we do best. It is time to reach out to representatives in Washington, donate to the ASC PAC and talk about what we do and why we are important for the country. The time is now.
Learn more about Regent Surgical Health.
Related Articles on the ASC Industry:
20 New Statistics on Surgery Center Staffing Costs
ASC Administrator Connie Casey: 5 Fresh Ideas for Cutting Costs in 2012
8 Characteristics of Highly Successful Surgery Centers
