Why inflation is one of ASCs' biggest threats

Inflation has disturbed every industry and wallet. Here is how it is affecting ASCs.

In June 2022, inflation skyrocketed to 9.1 percent — the largest increase in 40 years, according to the Bureau of Labor Statistics.

The annual inflation rate in 2022 was 6.5 percent, a 0.5 percent decrease from 2021, making 2022 the year with the second-highest annual inflation rate of the 2000s.

No matter the location, industry or person, the effects of these numbers are unavoidable. 

Even though the average salary for physicians increased by 3.8 percent in 2021, it dropped 2.4 percent in 2022, according to the "2023 Physician Compensation Report" from Doximity. This is because physician pay is not keeping up with inflation rates and when combined with declining reimbursements, physicians' overall income is taking a hit. 

"Inflation certainly has been an issue for everyone over the last couple of years and ASCs are no different, having been affected by a wide range of increasing costs whether it is surgical implants, staffing or even just keeping the lights on," Peter Whang, MD, associate professor in the orthopedics and rehabilitation department at Yale University School of Medicine in New Haven, Conn., told Becker's.

"However, what is probably more concerning in 2023 is the ongoing inflation in conjunction with the prospect of Medicare cuts. While the reduction may not have been as painful as initially anticipated, even a single digit cut in reimbursement threatens the viability of ASCs given the ever decreasing margins we face year after year," Dr. Whang said. 

But inflation is not affecting only physician pay — it is affecting everything that goes into operating an ASC. 

"Inflation is hitting us in both fixed and variable expenses," Jacqueline McLaughlin, RN, administrator at Northwoods Surgery Center in Woodruff, Wis., told Becker's. "Energy costs have been a large increase in our expenses, as well as distributor shipping fees. Supplies and pharmaceuticals have steadily increased since supply chain interruptions beginning in 2020. There really is not an area where inflation has not hit this industry."

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