Here are five updates on the rising cost of healthcare for ASC leaders to monitor:
1. Come 2024, physician pay is shrinking. CMS' finalized fee schedule will reduce overall physician pay by 1.25% in 2024 and update the conversion factor to $32.74, a 3.4% decrease over last year.
2. The cost to practice medicine is growing. Inflation — specifically in healthcare — continues to rise. The Medicare Economic Index, which measures medical practice cost inflation, increased 4.6% in 2023, the highest in the last 23 years.
3. Reimbursement rates still favor hospital outpatient departments over ASCs. Despite cost-saving opportunities presented by ASCs, reimbursement rates for the same procedures still sit at 50% of the HOPD rates, according to one ASC administrator.
4. The cost of employing physicians is rising. The average cost of employing a provider full time in the third quarter of this year was $611,194, representing a rising cost of labor, according to data from Kaufman Hall.
5. Some ASCs have had to spend a quarter or more of their net operating revenue on employees to stay ahead of shortages. The average percent of operating revenue spent on paying employees by ASCs was 21.3%, according to a report from VMG Health. However, the highest spenders paid 29% of their earnings to compensate staff.