Article

A Tale of Two Patient Profiles at Outpatient Surgical Care Facilities

September 12, 2019
Two Patient Profiles Hero
Medicare patients at ambulatory surgery centers (ASCs) typically have better health histories than those at hospital outpatient clinics, according to the American Hospital Association (AHA). It notes that patients at hospital outpatient departments (HOPDs) are more likely to be poor, have severe chronic conditions and to have been previously hospitalized compared to those at ASCs.

The information comes from a report by KNG Health Consulting and released in April by the AHA. The report examines how Medicare fee-for-service beneficiaries who receive surgical care in HOPDs compare to those receiving care in ASCs. It found that patient characteristics in the two settings differ significantly.

This is important because the Centers for Medicare & Medicaid Services (CMS) pays different rates for surgical care provided in each environment. Hospitals receive higher rates than ASCs.

DISTINCTIVE FEE-FOR-SERVICE PATIENT POPULATIONS

Patients typically have two choices for outpatient surgical care: ASCs or HOPDs. Both are very capable of performing successful surgeries. However, according to the report released by AHA, Medicare fee-for-service beneficiaries at HOPDs:

  • Have higher emergency department utilization.
  • Have higher prior acute care hospital use.
  • May require a greater level of care due to higher complexity.
  • Are 1.8 times more likely to be under 65 years of age.
  • Are 1.4 times more likely to be 85 years old or older.

The AHA suggests HOPDs have more comprehensive licensing, accreditation and regulatory requirements than freestanding physician offices and ASCs, and therefore require higher reimbursements.

DIFFERENT MEASURES LEAD TO DIFFERENT CMS REIMBURSEMENT RATES

The AHA says hospitals receive sicker patients by design—doctors send patients with the poorest health to HOPDs.

“America’s hospitals and health systems provide around-the-clock care to all who come to us; this includes the sickest patients and those in the most vulnerable communities,” says AHA President and CEO Rick Pollack in a news release. “Physicians tend to refer more complex patients to hospital outpatient departments for safety reasons, as hospitals are better equipped to handle complications and emergencies. Proposals that treat hospital outpatient departments the same as ambulatory surgical centers and other sites of care are misguided, and ignore the health care needs of the patients and communities we serve.”

ASCs perform more than 7 million procedures for Medicare beneficiaries annually, according to an article in Becker’s ASC Review. The article points out that CMS determines reimbursement rates for HOPDS and ASCs using different measures of inflation, which results in significant cost differences. For example, Medicare reimburses hospitals $1,745 for outpatient cataract surgery procedures, while ASCs receive $976 for the same surgery. 

“In a fee-for-services world, hospitals received an 81% higher reimbursement rate on services performed in the HOPD over those in an ASC,” says Regent CEO Chris Bishop in the Becker article. “But those days are going fast. As health systems move toward deriving greater percentages of revenue from value-based care, the potential for higher reimbursement in an HOPD is outweighed by the advantages of leveraging a broader ambulatory platform.”

IS OUTPATIENT SURGERY A MONEY LOSING PROPOSITION FOR HOSPITALS?

Despite the fact that Medicare reimburses HOPDS at a higher rate than ASCs, the reimbursements are less than the costs hospitals incure to provide the care, according to AHA. This could affect care that’s provided in HOPDs and potentially threaten access to care for some of the most vulnerable patients and communities.  

AHA reports that for HOPDs:

  • Medicare does not cover the full cost of providing care.
  • Medicare margins for outpatient services are at a negative—12.8% in 2017.
  • Overall Medicare margins are at a record-low negative of 9.9%. 

Hospitals may feel even more of a squeeze this year. The CMS reduced payments for off-campus HOPD clinic visits under the outpatient prospective payment system final rule for 2019.  

BOTH TYPES OF SURGERY CENTERS CAN BENEFIT FROM COST EFFICIENCIES

Even though patient populations between ASCs and HOPDs are different and receive different reimbursements, they can both work to lower costs to reduce the burden of low reimbursement rates. One way to do that is by working with a group purchasing organization (GPO).

It’s important for each type of organization to work with a GPO that specializes in its type of business. For instance, a GPO like Vizient focuses on community hospitals, large integrated delivery networks and academic medical centers. Provista, by contrast, specializes in meeting the needs of healthcare organizations serving the non-acute market, including ASCs. 

GPOs help facilities improve efficiencies by automating procurement processes, leverage group purchasing to ensure industry-best pricing and unique savings programs, use custom analytics to inform buying decisions and more. Savings can be substantial. Provista members save an average of 14% on their purchases. As reimbursements become more problematic, every savings opportunity becomes more important for the financial health of organizations.  

It’s important for each type of organization to work with a GPO that specializes in its type of business. For instance, a GPO like Vizient focuses on community hospitals, large integrated delivery networks and academic medical centers. Provista, by contrast, specializes in meeting the needs of healthcare organizations serving the non-acute market, including ASCs.

 

“Patients at ambulatory surgery centers typically have better health histories than those at hospital outpatient clinics. Medicare pays a higher rate to hospitals for the same procedures because of how rates are determined.”

NOW YOU KNOW, WHAT'S NEXT?

ASCs and other non-acute facilities should use the information provided about patient demographics to target their appropriate customer base. They can increase business by marketing directly to the patients most likely to use and benefit from their services.

Clinics can do this through online and digital marketing campaigns that focus on specific demographics. For example, they can let 67 year old men know they can get a hip replacement and still be back out on the golf course shortly afterwards. The more demographic information clinics have about patients and potential patients, the more they can optimize digital marketing by sending personalized, highly relevant messages to the right people—and get them through the clinic doors.

Organizations that are not leveraging demographics and digital capabilities are missing significant opportunities. Patients are oftentimes looking for facilities that specialize in the care they need. That’s why healthcare organizations need to ask themselves, “How are we reaching and connecting with patients who need our services?”

Your source for digital marketing

Provista members can put digital marketing to work for them and modernize their outdated websites through a contract with Scorpion. The company offers full-service marketing and high-tech digital services for today’s healthcare facilities.

You Might Also Like

Ready to Get Started?

Take the next step to start saving.

Become a Member