Report: Cost of surgeries in ASCs vs. hospitals

As the number of ambulatory surgery centers (ASCs) substantially expands nationwide, a new study from the Workers Compensation Research Institute (WCRI) examines how the payments for common workers’ compensation surgeries conducted at ASCs compare with the payments for similar surgeries performed at hospital outpatient settings.

“Advocates for free-standing ASCs argue they may be more efficient than hospital outpatient departments and, therefore, should be less costly to payors and patients,” said Dr. Bogdan Savych, the study’s author. “The goal of this report is to inform the debate about how the costs of ASC surgeries compare to the costs of similar hospital outpatient surgeries.”

In many states, the study, Comparing Payments to Ambulatory Surgery Centers and Hospital Outpatient Departments, finds support for the conventional wisdom that ASC surgeries are less expensive than hospital outpatient surgeries, although there are exceptions. For example, in Connecticut, ASC surgeries were more expensive than hospital outpatient surgeries for all surgery types examined. In Georgia, New Jersey, North Carolina, and Tennessee, ASC surgeries were also more expensive than hospital outpatient surgeries for some of the surgery types examined in the study.

The study found differences or similarities in payments for ASC and hospital outpatient surgeries often reflected underlying fee schedule regulations. When the ASC fee schedules were lower than hospital outpatient fee schedules, the payments were also lower. Differences in fee schedule rates were an important factor in Illinois, South Carolina, and Texas. When ASC fee schedules were similar to the hospital outpatient fee schedules, the payments were mostly similar.

According to the study, ASC surgeries were less expensive than hospital outpatient surgeries in states that used different approaches for regulating prices paid for surgery. In four states (Florida, Maryland, Michigan, and Pennsylvania), payments for ASC surgeries used a fixed-amount fee schedule, while payments for hospital outpatient surgeries were tied to charges, which led to large differences in payments for ASC and for hospital outpatient surgeries.

The study analyzed ASC and hospital outpatient facility payments for common knee and shoulder surgeries performed in calendar year 2011 in 23 large states representing over two-thirds of the workers’ compensation benefits paid in the United States. The 23 states included in this study are Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

Click on the following link to purchase this study: http://www.wcrinet.org/studies/public/books/asc_hosp_book.html.

The Cambridge-based WCRI is recognized as a leader in providing high-quality, objective information about public policy issues involving workers’ compensation systems.

ABOUT WCRI

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI’s diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia and New Zealand.