Anesthesiologists and Ambulatory Surgical Centers in an Affordable Care Act Era

Most anesthesiology practices provide services in ambulatory surgical centers (ASCs), and quite a few anesthesiologists have investment interests in ASCs.  With more than 5,400 Medicare-certified ASCs in the United States, 1.8 percent more than in 2012, a look at the characteristics of successful facilities and at the challenges they face should be worthwhile.

Meeting the marketplace challenges is the foundation of success.  Topping the list of challenges for ASCs today, now that the implementation of the Affordable Care Act is underway, are the following:

1. Attracting and retaining surgeons and other physicians who will contribute to the facility’s bottom line.  Securing coverage, high quality and a referral base have always been key, but as more and more physicians opt for hospital employment, the pool of unaffiliated physicians is shrinking.  More than half of new physicians are taking jobs with hospitals rather than entering private practice.  Twenty-nine percent of physicians were working directly for a hospital or a practice partially owned by a hospital in 2012, according to an AMA survey.
2. Hospital dominance in environments already saturated with ASCs.  Hospitals are vying to create integrated networks while simultaneously growing horizontally through mergers.  Integrated networks not only lock up physicians who might otherwise refer to the ASCs; they may also limit the number of payers who will enter into contracts with the ASCs.
3. Payment.  Annual managed care plan increases are becoming rare, and contracting is more difficult than it once was (see item #2 above).  Larger patient deductibles and co-payments can present collection issues—and they also provide an incentive for patients to seek lower-cost facilities.

The parallels to the challenges confronted by anesthesiologists are obvious.  As one expert stated in an interview published in the October 2013 issue of Becker’s ASC Review (“Can ASCs Survive Healthcare Reform? Q&A With Kim White,” pp. 14-15):  “Going forward, ASCs are going to need to do three things to really survive: demonstrate economic and clinical value, demonstrate efficiencies and meet quality standards.” The point is just as valid if we substitute the word “anesthesiologists” for “ASCs.”

Demonstrating value and efficiencies is a comparative exercise.  The comparison can be longitudinal (one facility, over time) or latitudinal (across multiple facilities during the same time period).   Recognizing that longitudinal measurement tends to be the most accurate, readers might nevertheless consider the benchmarks listed below, which come from Laura Miller’s article “100 ASC Benchmarks & Statistics to Know” in the same issue of Becker’s ASC Review.  The values are generally from a national database and may not be plausible for your own ASC, but at a minimum they suggest performance metrics to be developed.

• Average room turnover time goal is 7-10 minutes, depending on case mix.
• Average number of cases performed annually per operating room is 765, with 4.6 cases per day (ASCs with 1-2 ORs reported 782 cases; those with more than 4 had 744 cases).
• Median operating room time per patient encounter:  50.2 minutes.
• Median rate of unscheduled direct transfers: 0.6 transfers per 1000 patient encounters.
• Nearly 80% of claims are paid/collected within 30 days, depending on the payer mix.
• The rate of unexpected claims denials is 12% (commercial) and 6% (Medicare) for the top ten CPT codes.  In order, the most common reasons for denials are:
• Lack of required information
• Duplicate claim or service
• Experimental procedure or treatment
• Average pain management revenue per case for ASCs with 3-4 operating rooms is $890.
• Procedure time (wheels in to wheels out) is 28 minutes for knee arthroscopy; 7 minutes for low back injections.
• 89-93% of patients are able to schedule their knee arthroscopies or low back injections within an acceptable time.
• 80% of patients say they experienced less pain following low back injections; 50% reduced pain medications after the procedure.
• 88% of ASC management companies consider pain management a desirable specialty.

What strategies enhance the advantages offered by ASCs over hospitals, principally speed and cost—i.e., their value proposition (assuming high quality)?  There are far more than we can address in this Alert, but “10 Tips to Make Efficient ASCs Even Better” (Becker’s ASC Review May/June 2013) lists a number of activities that anesthesiologists can lead or support:

1. Figure out whether any of the surgeons usually over- or under-estimate surgical times by wide margins, and add or subtract time to or from their cases accordingly to prevent gaps in the daily schedule.
2. Call patients the day before surgery to remind them of the appointment and any pre-procedure requirements.
3. For a given set of operating rooms, allow surgeons to add on cases at the start of the day instead of at the end to keep clinical time moving smoothly.
4. Coordinate ORs so that similar cases (e.g., shoulder surgeries, knee surgeries) follow each other to minimize the rearrangement of equipment.  In a larger facility, it may be possible to group all left side surgeries together before switching to the right side.
5. Maintain a stable and adequate staff, and use float staff to prepare rooms for turnover rather than requiring the OR staff to return from transporting the patient to recovery to clean their own rooms. 
6. Standardize equipment trays, of which there should be a sufficient number to avoid delays while the sterilization process is completed.
7. Promote teamwork and leadership: team leaders are expected to make sure each evening that surgical equipment and trays are ready for the next morning’s cases.  Constant communication reduces the incidence and severity of disruptions.

The activities noted above can be helpful in securing surgeon satisfaction and loyalty.  Anesthesiologists can also play a part in the type of direct marketing to patients that will become increasingly important as incentives to patients to select cost-effective care take hold in the healthcare marketplace.  As Kim White said,

We also have to look at trends in high-deductible health plans.  Since consumers will think more and more about the services they seek, consider the expenses they have to pay and the value they’ll get in return.  ASCs should develop a good relationship with consumers and communicate with them so they understand the value of care.  Tell them what type of services they’ll receive at the ASC and the types of outcomes they can bank on.

ASCs need more than good relationships with surgeons and patients, of course.  They may need to form strategic alliances with other providers or with entire health systems, and they need the leadership that will be able to form and capitalize on those alliances.  Anesthesiology practices, in our experience, are potentially at least as good a source of such leadership as other incubators.