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Ambulatory Surgery Centers. Econ 737.01 3/16/11. Outline. I. What are they? II. Potential benefits III. Potential drawbacks IV. Evidence. I. What are they?. F ree-standing facilities that provide relatively uncomplicated outpatient medical procedures

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ambulatory surgery centers

Ambulatory Surgery Centers

Econ 737.01


  • I. What are they?
  • II. Potential benefits
  • III. Potential drawbacks
  • IV. Evidence
i what are they
I. What are they?
  • Free-standing facilities that provide relatively uncomplicated outpatient medical procedures
  • Typically small and specialized, most often in ophthalmology, gastroenterology, or orthopedics
  • Typically privately-owned, either entirely or party by the physicians who practice there
  • The number of Medicare-certified ASCs in US has risen from 400 in 1983 to 4,700 in 2006.
  • ASCs provided 43% of all outpatient surgeries in US in 2006
ii potential benefits
II. Potential benefits
  • Lower cost of care
  • Greater convenience
  • More flexibility in scheduling
  • Potentially nicer settings
  • Allows for more efficient sorting of patients (most risky to HOPD, less risky to ASC)
  • Better quality of care? (specialization)
  • Competitive effects on hospitals: lower prices, better quality?
iii potential drawbacks
III. Potential drawbacks
  • The elephant in the room is physician ownership (“self referral”)
    • Not unique to ASCs – there are also physician-owned specialty hospitals and imaging centers
  • Wasteful services?
    • Cream skimming/cherry picking
    • Physicians may sendprofitable (better insurance or procedure with higher margin) to ASCs, less profitable to HOPDs
  • Might hurt hospital profitability (through either lower volume or lower margins) and limit their ability to cross-subsidize unprofitable procedures like charity care
  • Worse quality of care? (not as well equipped to deal with complications)
iv evidence
IV. Evidence
  • Greater convenience
    • Weber (2008)
      • Structural model; strong spatial component to demand for patients
  • More efficient sorting of patients
    • Wynn et al. (2004)
      • Patients treated at HOPDs had more risk factors than those treated at ASCs
    • Plotzke and Courtemanche (2010)
      • More diagnosis codes and general anesthesia associated with lower probability of treatment at ASCs
iv evidence8
IV. Evidence
  • Quality
    • Chukmaitov et al. (2008)
      • Tested for risk-adjusted differences in 7- and 30-day mortality and hospitalizations for patients obtaining outpatient surgery at ASCs versus HOPDs
      • ASCs seem to do better for upper GI endoscopies and cataracts, HOPDs seem to do better for some other procedures that ASCs don’t perform as frequently
iv evidence9
IV. Evidence
  • Wasteful services
    • Hollingsworth et al. (2010)
      • In physician fixed effects models, found positive association between ASC ownership and surgical volume
    • Courtemanche and Plotzke (2010)
      • Reduction in hospital volume when an ASC enters is way less than the volume of the average ASC
        • Are the new services welfare-enhancing or wasteful?
iv evidence10
IV. Evidence
  • Cream skimming/cherry picking
    • Gabel et al. (2008)
      • Physicians who were leading referrers to physician-owned ASCs were more likely to refer Medicaid patients to HOPDs than leading referrers to non-physician-owned ASCs
    • Plotzke and Courtemanche (2010)
      • National sample of Medicare patients from the National Survey of Ambulatory Surgery
      • 10% increase in procedure profit margin was associated with a1.2-1.4 percentage point increase in the probability the procedure was performed in an ASC instead of a hospital.
iv evidence11
IV. Evidence
  • Hospital volume
    • Lynk and Longley (2002)
      • Two case studies where rural hospitals slashed their provision of outpatient surgery after ASCs entered
    • Bian and Morrisey (2007)
      • MSA-level panel analysis
      • An additional ASC per 100,000 residents reduced hospital outpatient surgery volume by 4.3% while not affecting inpatient volume
    • Courtemanche and Plotzke (2010)
      • Hospital-level panel analysis
      • ASCs only affect a hospital’s volume if they’re within a few miles of each other.
      • Even then, the average ASC reduces the average hospital’s volume by only 2-4%.
      • The effects of large ASCs and early entrants are more substantial.