Price increases were much lower in ambulatory surgery centers than hospital outpatient departments in 2007-12

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.