AHRQ Study: Price Increases Steady for Ambulatory Surgery Centers, Significantly Higher for Hospital Outpatient Surgery Departments

The proliferation of ambulatory surgery centers (ASCs) has not led to a decrease in hospital outpatient surgery department prices, according to a new AHRQ-funded study. ASCs are medical facilities where surgery that does not require hospital admission is performed. This study examined ASC growth and revenues using a large national claims database that contains information on actual prices paid. The author found that for six common outpatient surgical procedures—cataract surgery with intraocular lenses, colonoscopy, knee arthroscopy with debridement, knee arthroscopy with meniscectomy, postcataract surgery and upper gastrointestinal endoscopy—prices paid to ASCs remained stable during 2007–2012, while prices paid to hospital outpatient surgery departments (HOPSDs) for the same procedures increased sharply. The study also found that private insurers paid ASCs more than Medicare paid ASCs for the same procedures. Medicare currently pays ASCs a legislated percentage of what it pays HOPSDs for the same services, but there is a considerable discrepancy between this ratio and the ratio of payments by private insurers across provider types and procedures. These findings question the use of a single ratio for ASC payments to HOPSD payments and suggest that ASCs and HOPSDs do not currently compete on price. The findings support the argument for increased price transparency and narrow or tiered insurance network designs that reward high-value providers. The study, “Price Increases Were Much Lower In Ambulatory Surgery Centers Than Hospital Outpatient Departments In 2007-12,” andabstract were published in the October issue of the journal Health Affairs.

2015 Oct 1;34(10):1738-44. doi: 10.1377/hlthaff.2015.0252.

Price Increases Were Much Lower In Ambulatory Surgery Centers Than Hospital Outpatient Departments In 2007-12.

Carey K1.

Author information

Abstract

Ambulatory surgery centers (ASCs) are freestanding facilities that provide services to patients who do not require an overnight stay. The number of ASCs has grown rapidly over the past fifteen years, as have the number of surgical procedures performed at them. ASCs now compete with hospital outpatient departments. This study examined the revenue side of ASC growth by using a large national claims database that contains information on actual prices paid. For six common outpatient surgical procedures, prices paid to ASCs on the whole grew in line with general medical care prices, while overall prices paid to hospital outpatient departments for the same procedures climbed sharply. This provides no evidence that ASCs are successfully pressuring hospital outpatient departments to lower their prices. Not unexpectedly, private insurers paid ASCs considerably more than Medicare paid ASCs for the same procedures. Medicare currently pays ASCs a legislated percentage of what it pays hospital outpatient departments for the same services, but there is a considerable discrepancy between this ratio and the ratio of payments by private insurers across provider types and procedures. This finding questions the wisdom of using a single ratio for ASC payments to hospital outpatient department payments.

Project HOPE—The People-to-People Health Foundation, Inc.