Does procedure profitability impact whether an outpatient surgery is performed at an ambulatory surgery center or hospital?

Abstract

Ambulatory surgery centers (ASCs) are small (typically physician owned) healthcare facilities that specialize in performing outpatient surgeries and therefore compete against hospitals for patients. Physicians who own ASCs could treat their most profitable patients at their ASCs and less profitable patients at hospitals. This paper asks if the profitability of an outpatient surgery impacts where a physician performs the surgery. Using a sample of Medicare patients from the National Survey of Ambulatory Surgery, we find that higher profit surgeries do have a higher probability of being performed at an ASC compared to a hospital. After controlling for surgery type, a 10% increase in a surgery's profitability is associated with a 1.2 to 1.4 percentage point increase in the probability the surgery is performed at an ASC.

Patient Mix in Outpatient Surgery Settings and Implications for Medicare Payment Policy

“…4 However, prior research has suggested that this exemption to self-referral laws may contribute to positive selection at ASCs, whereby physician-owners of ASCs practice "cream skimming" and "dumping" (Ellis, 1998;Plotzke & Courtemanche, 2010;Strope et al, 2009). The latter occurs when physicians refer potentially more complex and costly cases to HOPDs, while the former occurs when they refer or treat patients with lower cost risk at ASCs.…”

Do independent treatment centers offer more value than general hospitals? The case of cataract care

“…In contrast, the independent sector in the UK charged higher prices than NHS hospitals (unclear whether this disparity still exists), and evidence points to the fact that ITCs in the UK are not always more efficient—only patients with hip or knee replacements had a shorter length of stay when treated in an ITC . At the same time, findings from both the UK and the US suggest that ITCs might be cherry‐picking and treat less‐complex patients compared with hospitals …”

Ambulatory Surgery Centers and Their Intended Effects on Outpatient Surgery

“…Third, physician owners preferentially manage well‐insured patients (Gabel et al. ) and perform well‐reimbursed procedures (Plotzke and Courtemanche ) at ASCs. Finally, the opening of an ASC in a health care market has been associated with significantly higher rates of outpatient surgery relative to markets without them (Hollingsworth et al.…”

“…Second, physician owners of ASCs uniformly perform higher volumes of outpatient procedures (Hollingsworth et al , 2010Strope et al 2009) and patients who see these physicians are much more likely to have surgery compared to those of nonowners (Mitchell 2010). Third, physician owners preferentially manage well-insured patients (Gabel et al 2008) and perform well-reimbursed procedures (Plotzke and Courtemanche 2011) at ASCs. Finally, the opening of an ASC in a health care market has been associated with significantly higher rates of outpatient surgery relative to markets without them (Hollingsworth et al 2011;Hollenbeck et al 2014).…”