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New Study Shows ASCs Could Play Pivotal Role in Health Care Reforms

ASC Study - Executive Summary


ASC Study - Full Report  


ASCs play a pivotal role in moving services into less expensive, yet clinically appropriate settings according to a recent report by KNG Health Consulting.


The national study findings highlight the role ASCs have played in meeting growing needs for essential surgical and cancer screening services.  The use of ASCs has likely slowed the growth of total Medicare spending for outpatient surgical services because they offer a low-cost alternative to hospital outpatient departments (HOPDs), a goal the ASC industry suggests is consistent with national health reform priorities.


Promoting the use of ASCs for Medicare beneficiaries' outpatient surgical needs would obviously correlate to the health reform objectives articulated by Congress and the Administration. Those objectives include promoting efficient use of services in the health care system and improving the value of Medicare's spending.



The results of this research demonstrate that ASCs have already been a beneficial partner to the Medicare program and its beneficiaries in constraining Medicare spending growth by providing a lower-priced option for outpatient surgical needs.


The research was conducted at the request of the National ASC Coalition, an organization of ASC associations including the OAASC and companies, to identify the factors that have contributed to the growth of ASCs.


Beyond demonstrating the role ASCs have played in moving surgical services into less expensive settings, this study disproves two factors critics of the ASC industry have suggested may offset the cost-reducing effects of the relatively low Medicare payment rates for ASCs.


1.   Physicians who own ASCs have a financial incentive to perform more surgical services than they would if they could only provide outpatient surgical services in a HOPD; and


2.   The expansion of outpatient surgical capacity in ASCs may lead to a higher overall volume of outpatient surgery.


This study found no statistical evidence that ASCs cause an increase in utilization of common Medicare procedures like colonoscopies and cataract surgery.


In fact it shows that 70% of the growth in ambulatory surgery centers from 2000 to 2007 is the result of moving procedures from HOPDs into the less expensive ASC setting.



The report also finds that

  • Growth in factors completely external to the ASC industry, such as the number of Medicare beneficiaries and disease prevalence help explain the total trend and demonstrate the role of ASCs in meeting demographic challenges for Medicare.
  • Much of the growth in ASC spending has been in procedures whose volume increases are relatively slow.


Taken as a whole, the research suggests that public policies promoting the expansion of ASC capacity have helped ensure access to essential surgical and cancer screening services at a savings to the Medicare program and its beneficiaries and should be an important contribution to achieving health care reform goals.



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