December 15, 2020

COVID-19 has hastened outpatient surgery migration

By: Elizabeth Wood
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The latest surge of COVID-19 cases has put many hospitals in a precarious position, with shortages of staff, space, and supplies. Lessons learned earlier in the pandemic cannot necessarily shore up systems that have been overwhelmed with patients.

Throughout most of 2020, some patients postponed medical or surgical care. When they eventually seek treatment, outcomes could be compromised for patients whose health has declined during the delay.

As devastating and disruptive as COVID-19 has been, however, it could be argued that the pandemic is partly responsible for accelerating the growth in services and procedures available at ambulatory surgery centers (ASCs).

Jeffry Peters, MBA

“The most significant trend over the past year has been COVID-19, with a shutdown of elective surgery in the spring and early summer. Patients are fearful of having elective surgery in a hospital where they’re treating COVID-19 patients, and surgeons are finding it easier to work in ASCs,” says Jeffry Peters, MBA, chief executive officer (CEO) of Surgical Directions, a healthcare consulting firm in Chicago.

Peters notes that 80% of all procedures in the US are done in an ambulatory setting, and he projects that could grow to 85% over the next decade (sidebar, “Different ambulatory procedures offer different financial opportunities”). He also sees a migration of procedures from hospital outpatient departments (HOPDs) to ASCs. “In 2005, 59% of ambulatory procedures were done in HOPDs, whereas in 2020, 60% of those procedures were done in ASCs,” he says, adding that he anticipates a 35% growth in orthopedic procedures between now and 2022.

Source: Surgical Directions. Used with permission.

Peters and other industry and healthcare leaders shared their thoughts during Becker’s ASC Virtual Event in September and October 2020. The opportunity for growth in the outpatient market was the overarching theme of many presentations. In addition, leaders offered advice on how to anticipate changing trends and maintain the safety, quality, and cost efficiency for which ASCs are known.

 

Complex but profitable procedures

The government and payers are encouraging a movement from HOPDs to ASCs, Peters says. Moving procedures from HOPDs to ASCs saved the Centers for Medicare & Medicaid Services (CMS) $27.8 billion between 2011 and 2018, and a savings of $73.4 billion is projected for 2020 to 2028.

“It’s not just Medicare—it’s the commercial payers that are seeing the most dramatic savings by having cases done in ASCs,” he notes. “That’s why they’re creating financial incentives for surgeons to do the cases in an ASC. They pay a surgeon $100 or $250 extra to do the case in an ASC, and they save thousands of dollars on the case, so there’s a huge financial push to move cases out of the HOPD and into the ASC.”

Orthopedic procedures, spinal fusions, and cardiology procedures are the specialties that are really moving the needle, says Nader Samii, JD, MBA, CEO of National Medical Billing Services in St Louis.

“Studies have projected a 31% growth in orthopedics over the 2015 to 2021 time frame, 200% in spine, and 230% in cardiology,” Samii says. “Medicare has allowed ASCs to operate as Hospitals Without Walls, and that will give more data to providers and Medicare on the effectiveness and quality of outcomes of procedures that until now haven’t been approved for a surgery center, he adds. (To learn more about Hospitals Without Walls, see OR Manager, July 2020, 20-21.)

Total joints and joint reconstruction are exploding,” says Frank M. Phillips, MD, professor and director, division of spine surgery, section head, minimally invasive spine surgery, and fellowship co-director, spine surgery, at Rush University Medical Center in Chicago. “We’ve seen enormous growth of reconstruction. Most spine practices that do ASC cases are doing things like limited decompression and single-level cervical fusion. More complex procedures haven’t really caught on, so they’ll be slower to move to ASCs than total joints. In the next 2 to 3 years, we’ll see more complex spine procedures in ASCs,” he predicts.

Bill H. Berryhill, MD, managing partner at Hybrid Cath Lab and Surgery Center in Waco, Texas, also sees a bright future for total joints. “You’ll need 23-hour observations and getting the contracts that will pay you to perform that procedure. If Medicare approves it, commercial payers will follow,” he says. “The things we see that are payable and profitable are orthopedics, cardiology, ENT procedures, ophthalmology, and GI procedures.”

Getting approval for 23-hour stays in Nebraska consumed an enormous amount of time and effort, but that is expected to pay off for Heartland Surgery Center in Kearney. The law became effective in November 2020.

Tracy Hoeft-Hoffman, MBA, MSN, RN, CASC

Prior to that, administrator Tracy Hoeft-Hoffman, MBA, MSN, RN, CASC, had launched a total joint replacement program, but the 23-hour stay will allow the facility to grow. “We’ll have 4 overnight rooms and we’re adding 2 ORs, as well as more space for sterile processing,” Hoeft-Hoffman says.

Currently, she is looking to expand Heartland’s urology service line. Despite the considerable amount of number crunching and negotiating involved in adding service lines, Hoeft-Hoffman encourages ASC administrators to evaluate such opportunities at their surgery centers. “For us, total joints has been a very worthwhile service line, and I believe urology will be, too,” she says.

Paul MacKoul, MD, cofounder of The Center for Innovative GYN Care in Rockville, Maryland, notes that gynecologic procedures can also be lucrative. “CMS increased reimbursement for GYN cases 25% about 2 years ago,” Dr MacKoul says. “It’s second only to orthopedics in payments. If you can bring high-volume GYN procedures into surgery centers, you’ll see some good volume and payments.”

 

Continuum of care

Attractive payment models are one thing, but taking on higher acuity cases generally means absorbing greater responsibility for the entire continuum of care. The more complex the case, the greater the risk for complications and the longer that follow-up period may need to be.

To be competitive, ASCs need to focus on developing integrated systems to manage patients’ needs. Success hinges on performing the surgery, linking with physicians’ office practices, helping with diagnostics and imaging, and helping to manage patients preoperatively and provide support postoperatively, Peters says.

“Our job is to make sure patients have a good, uneventful recovery. To do it, we increasingly see surgery centers specializing in certain service lines. You do not want to be everything to everyone. You want to create niches,” he adds.

“Over the last several months, we learned that what we have to do in the preoperative phase has changed,” Dr Berryhill says. “For cardiology patients, if they become ill or even have a fever, you have to change your schedule and communicate with your patients very quickly.”

That ability to communicate may necessitate an investment in technology. For example, Physicians Alliance Surgery Center in Cape Girardeaux, Missouri, has implemented the use of an app on surgeons’ phones to allow for a real-time view of patient scheduling, says Matthew Ewasko, MBA, administrator. This technology helps to speed up block schedule changes, he notes.

In addition, Ewasko says, steps have been taken to handle the patient check-in process remotely and to give patients and their family members more visibility into what’s going on. Patients wait offsite rather than in waiting rooms.

What’s most important to patients, Peters says, are:

• communication—starting with the decision to have surgery, patients should have all the information they need to prepare

• caring—patients want to feel that staff care about how they are feeling and whether they’ll have a good experience

• ongoing support

• safety.

“As an industry, we need to be better at patient navigation—to have referral management, and engage with the patients,” says David Young, president and CEO of Physicians Endoscopy in Jamison, Pennsylvania.

It’s also important to continually track clinical outcomes, Peters notes. What is the patient’s status at 3 months, 6 months, and 1 year postoperatively? “Ideally, Press Ganey scores of 94% or above are needed to be competitive,” he says.

 

The big picture

There’s a consolidation of the ASC market, Peters says. “A lot of players nationally are trying to get a large number of ASCs in one geographical market. This helps with payer contracts and negotiating leverage because of their concentration,” he says. “There’s a lot of new investment capital funding for ASCs to create integrated healthcare delivery systems.”

Young sees the value in that trend. “The practice consolidation around ASCs and the ability to have vertical alignment to show that the ASC model can deliver on costs and outcomes is all part of the reason practice consolidation should be coming together,” he says. He also notes the need for succession planning to replace aging physicians with those newer to the field who seek opportunities to advance in their careers.

For an ASC to be successful, Peters says, it’s important to:

• have a depth of specialties

• be integrated with advanced diagnostics

• have capital investments for growth

• have a value-based focus—better outcomes, patient experiences, lower costs, and payer-designated centers of excellence.

Peters notes that some high-volume surgeons who have had ownership in ASCs may be looking to bow out as they mature, which gives hospitals the opportunity to invest in the freestanding ASC market.

“This allows ASCs to have a capital infusion so they can invest in high-cost technology, such as MRIs,” Peters says. “It’s the ‘build or buy?’ decision for many hospitals and national ASC firms.”

Buying an existing center is a lower risk option to consider, he adds.

To position an ASC strategy, Peters suggests asking some key questions.

What services will give our facility a competitive advantage? “You want to offer technology, staff, or an experience that is difficult for people to duplicate. For example, if you invest in the equipment needed for cardiology and align with a large cardiac group, it gives you a competitive advantage.”

Not all payers pay for the same procedures at the same rate, so it’s important to understand what they will pay for. Will they pay on a bundled basis? Will they pay for Exparel, which allows patients to be discharged earlier and go home pain free?

With so many people having lost jobs and employer-sponsored insurance because of COVID-19, patients don’t have the same resources as before. Consider whether to develop a payment plan for such circumstances.

Are there clinical providers who are motivated to perform more complicated procedures in an ambulatory setting?Their responsibility does not end when the patient is discharged; they will need to follow up and provide ongoing communication to alleviate patients’ anxiety. Furthermore, staff may need to be educated for more complex procedures, or perhaps new staff may need to be hired.

What is the incremental volume and revenue? Is the projected return worth the significant capital investment needed to get into high-technology procedures?“Make sure you create marketing channels to support your facility and investment,” Peters says. “In many cases, that means aligning with large surgical groups or joint ventures. Increasingly, ASCs have to provide data that measure outcomes and utilization. Prove to payers that the best outcomes are being achieved for the lowest cost.”

Anthony Romeo, MD, executive vice president of DuPage Medical Group in Downers Grove, Illinois, concurs: “When we talk with our payers, they know how many cases we’re doing in the hospital or the ASC. They want to know why we’re not doing more in the ASC. They’re bringing the pressure of value-based care,” he says.

Dr Romeo is optimistic about the ability of ASCs to remain open during a future pandemic, and about the future of the industry. “People will look to partner, and those partners have to have good data analytics to make sure we’re following all the guidelines for value-based care,” he says.

“We’ll see growth in chains but also in collaboration between physicians, hospitals, ASCs, and third parties with expertise in delivering the best care,” he predicts. ✥

 

References

Ewasko M, Berryhill B H, MacKoul P, et al. The next 5 years for ASCs. Becker’s ASC Virtual Event. October 1, 2020.

Gantwerker B R, Hoeft-Hoffman T. Adding procedures, revenue streams to ASCs. Becker’s ASC Virtual Event. October 16, 2020.

Lew L, Young D, Romeo A, et al. The best ideas for growth today. Becker’s ASC Virtual Event. October 14, 2020.

Peters J, Cole A. Build a bridge to success: ASC strategies for growth. Becker’s ASC Virtual Event. October 14, 2020.

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