Leaving the Hospital Walls: The ASC Race Tightens

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The migration of surgical procedures from inpatient to outpatient settings, particularly to Ambulatory Surgery Centers (ASCs), has been a significant trend in healthcare in recent years. This shift is driven by several factors: advancements in technology and anesthesia, cost efficiency, patient convenience, and improved quality of care.

Surgical procedures that were traditionally performed in a hospital setting are now increasingly being conducted in outpatient environments. This shift was accelerated by the COVID-19 pandemic, which led to an increase in the number of surgeries performed in outpatient settings, especially common general surgeries.

Enter ambulatory surgery centers (ASCs) – one of the fastest-growing segments of the healthcare sector. The rise of ASCs has contributed to a decline in outpatient surgery in hospitals and is reshaping the surgical landscape.

Why? Mainly because these centers offer patients the convenience of having surgeries and procedures performed safely outside the hospital, often at a lower cost.

Orthopedic and cardiovascular procedures are among those seeing a significant shift towards ASC settings. Total hip and knee arthroplasty (TKA and THA), for instance, have seen a noticeable migration from hospital to ambulatory facilities, with perioperative outcomes being assessed for safety and effectiveness.

The migration trend is not without its challenges. For example, the successful transition of procedures like total joint arthroplasty to an outpatient setting requires proof of safety and the establishment of standardized protocol. Moreover, as larger practices and facilities cover more outpatient cases, managing this shift becomes a critical aspect.

More Surgical Codes Now Approved for ASCs

As ASC administrators know full well, surgical codes (or CPT codes) play a crucial role in healthcare reimbursement. Their correct application is essential for ensuring accurate reimbursement from insurance companies and Medicare.

The shift of surgical codes from inpatient-only to Hospital Outpatient Departments (HOPD) and ASC Covered Procedures List (ASC-CPL) has been significant.

The Centers for Medicare & Medicaid Services (CMS) regularly updates the list of procedures that Medicare will reimburse in HOPD and those included in the ASC-CPL. These changes not only align with the broader trend towards outpatient care but also impacts the financial sustainability of ASCs.

As more codes are moved onto the ASC-CPL, it provides ASC administrators with more opportunities to offer a wider range of services, thereby expanding the eligible population to be treated in their facility.

Recent Trends in Surgical Procedure Migration

Orthopedic procedures, such as hip replacements, are among the specific operations that have seen a significant shift. In 2019, research and consulting firm Bain & Company projected the percentage of hip procedures in ASCs to grow from just over 9%. The migration of these complex procedures to outpatient settings is a testament to the advancements in surgical techniques and post-operative care protocols, enabling quicker recovery times and reduced hospital stays.

Additionally, cardiovascular procedures are being increasingly performed in ASCs. Advances in technology and minimally invasive techniques have made it possible to safely perform them outside of traditional hospital settings. Not only does this reduce strain on hospital resources, but it can also provide patients with a more convenient, less stressful experience.

It should also be noted that ASCs owned entirely by physician groups have decreased by 9% in the last five years according to the Ambulatory Surgery Center Association (ASCA), indicating a shift in ownership patterns. Hospitals have begun to turn their attention to the ASC market, in part to not lose procedures to independent ASCs. But, with many ASCs wishing to remain independent, the market has become more and more competitive in recent years.

Last year, the US ambulatory surgery centers market size was valued at USD 36.8 billion and is anticipated to grow at a compound annual growth rate (CAGR) of 6.00% from 2023 to 2030 (Grand View Research). This growth underscores the increasing demand for outpatient procedures and will continue to fuel the race for ASCs we are witnessing today.