Q: Is it safe to assume that these types of ventures would significantly expand healthcare?
David Thoene: The answer is yes. Of all the surgery cases performed in the United States in 2006, approximately 65 percent were performed in the outpatient setting. Outpatient surgery as a percentage of total surgery has increased from approximately 18 percent in 1981. The trend toward outpatient surgery versus inpatient surgery is the result of changes in technology and improvements in the practice of medicine. The trend toward outpatient surgery centers versus hospitals is occurring because ASCs provide a more productive environment than traditional acute-care hospitals since the doctor can maintain his or her schedule without the interruption of emergencies that can delay scheduled surgeries in the hospital setting (hence increasing physician productivity during an era of declining reimbursements); because patients prefer the less institutionalized environment of an ASC; and because ASCs also provide a setting for surgical procedures to be performed at a considerable discount, in terms of cost, compared to a hospital setting.
Regardless of the ownership structure (physician-owned, hospital-owned or hospital-physician joint venture), outpatient surgery center operating rooms can be constructed and equipped substantially less expensively than hospital operating rooms. To the extent that adding these operating rooms obviates the need for acute care hospital expansion, healthcare will be more affordable for consumers. And, to the extent adding outpatient operating rooms enables hospitals to serve more complex inpatient surgical patients in their existing facilities, overall surgical care capacity is significantly expanded in the community.
The joint-venture structure provides important additional benefits beyond the expansion of surgical capacity. It enhances access to capital by broadening the ownership base of the surgery center; it enhances the ability of communities to recruit and retain surgeons by providing an income opportunity to partly offset reductions in professional fees; it enhances the coordination of healthcare by aligning strategic and clinical initiatives of health systems (like, for example, electronic medical records) with physicians; and it enhances efficiency and safety by leveraging the entrepreneurial and clinical expertise of the surgeon users of the facility. The outpatient surgery center delivery model probably owes much of its existence to the leadership of surgeons and to the joint venture ownership model.
Q: Will these types of ventures make care more affordable for consumers? Will patients see some of those savings?
DT: The answer is probably. Economic theory says that the most affordable healthcare will be that which is provided in the most efficient, least costly and safe environment. Providers are already facing downward reimbursement compression, especially from Medicare (which tends to drive the reimbursement practices of other payers). Offering care in less costly alternative settings enables providers to respond to reimbursement pressure while continuing to offer high quality services in the community. Patients should enjoy lower cost insurance premiums as a result of the healthcare system’s investment in lower cost ambulatory surgery centers because surgeons can be more productive, and because the surgical venue is more efficient.
In some settings the direct savings for consumers may not be as apparent, but may be offset by other considerations. For example, the development of an ambulatory surgery resource based on the hospital outpatient department “clinical co-management model” (presented in the webinar) may provide the only pathway for smaller, less affluent communities in need of additional surgery capacity. Under this model the benefits of efficient, coordinated and safe care are provided — but, not necessarily with a reduction in cost per procedure for consumers and payers. However, the community enjoys the benefit of increased surgeon productivity without the expense of costly hospital expansion. Many smaller communities can ameliorate the chronic shortage of doctors and facilities by using the clinical co-management model.
Learn more about Medical Surgical Partners.
