COVID-19 has tested the resilience of ambulatory surgery centers,
but ASCs appear to be emerging stronger than ever.
“Certainly, the last year has been difficult for ambulatory surgery centers,” says Todd Johnson, who leads the medical device sector for management consulting firm Bain & Company. “Most of their procedures are elective – and those were postponed by law or patient preference for months [due to COVID-19.] But our clients are looking at 2021 as a bounce-back year, given the pent-up demand for cataract surgery, knee procedures, colonoscopies, etc.”
In a 2019 report, Johnson co-wrote a report for Bain predicting that single-specialty centers focused on orthopedics, cardiology and spinal surgery would see the fastest growth in volume of procedures. That prediction is still on track.
Orthopedics
At the time, commercial payers had begun reimbursing total joint replacements in ASCs, which led to an eightfold increase in the number of surgery centers performing such procedures. CMS added 11 procedures through their standard review process as well as 267 additional procedures after revising their criteria, resulting in 278 procedures being added to the ASC covered procedures list from January 1, 2021, including total hip arthroplasty, under its standard review process. The agency also finalized its proposal to eliminate the Inpatient Only (IPO) list over a three-year transitional period, beginning with the removal of approximately 300 primarily musculoskeletal-related services. The IPO proposal would extend Medicare coverage to procedures performed in the hospital outpatient setting, and experts believe it will lead to increased coverage in ambulatory surgery centers as well.
Given these developments, perhaps it’s not surprising that growth in outpatient orthopedics continues to climb, despite COVID-19. In fact, total joint procedures in ambulatory surgery centers grew over 40% in 2020, in an overall market that was flat, says Johnson.
ASCs received a vote of confidence in 2016 from the American Academy of Orthopaedic Surgeons. In a position statement, the AAOS voiced its support for ASCs, “regardless of ownership, so long as all potential conflicts of interest are fully disclosed to the patient, payers, and other providers.” The Academy also voiced support for “physician and non-physician investment in facilities that deliver high quality and cost-effective healthcare.”
The Academy’s position remains just as strong today, says Daniel Murrey, M.D., FAAOS, chair of the AAOS Health Care Systems Committee, and chief medical officer for Surgical Care Affiliates, a division of Optum. “Orthopedic surgeons regard ASCs as an extension of their practice. We become deeply engaged from a clinical, customer service, patient experience and affordability standpoint.”
AAOS is supportive of Medicare’s intent to remove the inpatient-only list, he says. “But we have concerns about unintended consequences,” such as payers or health systems pressuring surgeons to perform procedures in an outpatient setting without consideration of risk, says Murrey. “We believe the physician should be the one to decide whether a case is more appropriately performed in the inpatient or outpatient setting.”
Cardiovascular
Diagnostic cardiology procedures began shifting to outpatient settings in 2005 with Medicare’s approval of outpatient arterial endovascular interventions, according to Bain & Company. In the first half of 2019, CMS added 12 cardiac catheterization procedures to its ASC-covered list, leading Bain to predict that ASCs would be performing between 30% and 35% of all cardio procedures by the mid-2020s.
“As payer support, technological advances and care redesign enable care to be delivered in lower-acuity and lower-cost settings, the opportunity to shift procedures such as electrophysiology, interventional cardiology and vascular services to ambulatory settings is top of mind for providers,” says Chad Giese, associate principal, cardiovascular intelligence, Sg2, a health system consultancy. “Similar to the overall shift to ASC settings, however, the pace and extent of the shift is highly market-dependent. A complex combination of forces, including federal and local regulations, workforce, patient population, and the current market landscape, must be assessed to understand if this shift aligns with and supports the broader goals of an organization’s cardiovascular program.
“Moreover, for cardiovascular services, this is more complex than just a shift to the ASC,” says Giese. Many organizations have pursued a hybrid facility model, operating both as an OBL (office-based lab) or an ASC, depending on the type of procedures scheduled for the day, the resources and staffing needed, and the optimal reimbursement for cases.
OBLs accommodate primarily vascular procedures, while ASCs can accommodate diagnostic catheterizations, percutaneous coronary interventions (formerly known as angioplasties with stents), even pacemaker insertions or generator changeouts.
Insofar as ASC procedures are concerned, cardiology is where GI was 10 or 15 years ago, says Rick Snyder, M.D., FACC, president of HeartPlace P.A., a minority owner of Medfinity ambulatory surgery centers in Texas, and past president of the American College of Cardiology Texas Chapter. “When I started, Medicare wouldn’t reimburse me for an angiogram or PCI.” But that’s changing, and with good reason.
“Clearly, there are some circumstances where you will want to do procedures in hospital outpatient departments,” for example, for patients with certain comorbidities, such as kidney disease, or if interventionalists anticipate difficulty with a particular vessel. Safety is always first, he says, citing a consensus statement – of which is a co-author – from the Society of Coronary Angiography and Intervention.
But in most cases, the ASC has the same equipment and staff as the hospital outpatient department, or HOPD, and costs a fraction of the latter. Furthermore, during the pandemic, cardiovascular patients who were directed away from the HOPD or inpatient OR to a surgery center found they loved them, he adds. “From a safety standpoint, cost, quality and patient satisfaction, ASCs are a home run.”
Where it’s headed
For distributors and manufacturers more accustomed to servicing large acute-care hospitals, ASCs present “a much more complicated customer environment to cover, and call for a much smarter, more agile supply chain,” says Johnson. But they are adapting.
Cardinal Health has a dedicated sales team focused on serving the needs of the ASC market, says Greta Marston, national vice president of ambulatory surgery center sales. The company anticipates continued growth in total joint replacements, says Marston, citing the 2020 Ambulatory Surgery Center HIDA Report, which projects the number of procedures performed in ASCs to grow from 32% in 2020 to 37% in 2022. “An additional area of growth is new-build facilities,” she adds. “We’re seeing investments across the country to expand through new-build facilities focusing on multispecialty, ortho and cardio procedures.”
“Changes by CMS will be one of many factors that accelerate the ongoing shift to the ASC setting,” says Ryota Terada, consulting director, orthopedic intelligence, Sg2. “That said, a variety of factors act as brakes or accelerators for the rate and extent of shift to the ASC setting across markets and service lines,” including:
- Patient acuity.
- Physician comfort (or lack thereof) with ASCs and patient selection criteria.
- Workflow challenges, including accommodating surgeons’ schedules between hospital-based ORs and ASCs.
- State-level regulatory restrictions, such as Certifications of Need (CON), overnight stays and procedures permitted to be performed in ASCs.
- Space restrictions (which could limit the type of procedures offered.)
- Physician alignment models and/or equity and reimbursement considerations.
- Commercial payers’ site-of-care policies for select elective procedures.
Says Giese, “Opening a new site sounds appealing, but how you’re going to staff it needs to be part of the discussion.”
Bill Prentice, CEO of the Ambulatory Surgery Center Association, says, “The health and comorbidities of patients are key in determining where patients safely get the best care. We would argue that many Medicare patients are good candidates to get care in ASCs, and if they did, the system would save billions of dollars.”
Despite all of its difficulties, COVID-19 might have provided a shot in the arm for ambulatory surgery centers, says Johnson. “COVID has really changed the game,” he says. “Doctors who might have been reluctant to perform total joints or other higher-acuity procedures in the ASC were forced to do so, because of capacity reasons or simply because patients were afraid to go to the hospital. They have become more comfortable with ASCs, which they’ve found are more convenient for doctors, payers and patients. So we expect continued growth.”