15% of HCA total joints were outpatient in 2019, more likely in ASCs this year

HCA Healthcare reported it had 123 freestanding outpatient surgery centers at the end of 2019, showing no growth over the previous year.

However, caseload was up 4 percent and same-facility outpatient cases were up 1.8 percent year over year for the fourth quarter. The company also added freestanding emergency rooms, physician clinics and urgent care centers, expanding its overall network to around 2,000 sites of care connected with its 185 hospitals.

"We want our networks to be conveniently located, easy for the patient to access and navigate, have different price points and then fundamentally our one-stop shops as a system with comprehensive service lines, so our patients can obtain all their healthcare inside of the HCA network," said Samuel Hazen, CEO and Director of HCA Healthcare, during the 2019 earnings call on Jan. 28, as transcribed by Seeking Alpha.

He also addressed total joint replacements, which CMS approved to reimburse in ASCs for 2020. He said total joints at HCA increased 7 percent in the fourth quarter, and around 15 percent of the total joints at HCA facilities are done outpatient, in either hospital outpatient departments or ASCs.

"Obviously, with the new reimbursement protocols, we anticipate a few more transitioning to [the ASC] setting," he said. "Our goal is to have a comprehensive orthopedic service line. So that means we're trying to align with the physicians in a way that creates the environment that they want, the environment they need, for their patients, and the most efficient environment for the payers."

To achieve that environment, Mr. Hazen said the company is examining migration patterns as technology advances. However, he doesn't anticipate CMS paying for total joints in ASCs will materially change the results in the company's separate service categories. He pointed to HCA's diversified portfolio of services as the reason why the change will have a minimal impact.

"Orthopedics is a very important service line, but it's one of many," he said. "It represents less than 10 percent of our overall revenue, and so if there's a bit of migration and pattern changes inside of that, it doesn't really offset the larger revenue picture for the company. But we're excited about some of the technology that's advanced in orthopedics. We're excited about the research opportunities that we have with physicians, and we're excited about further alignment of physician groups across the company as it relates to what we're trying to do with orthopedics as a whole."

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