The Acceleration of ASCs

ASCs are gaining both more patients and importance in the marketplace, but they have their share of unique challenges.

There are several traditional care shift drivers that have been present for years in the Ambulatory Surgery Center (ASC) space – things like payment incentives across sites, and minimally invasive surgical techniques that permit surgeries to occur on an outpatient basis.

But there are also new drivers impacting the shift of care from the acute space to ASCs, said Amber Lewis, director of strategic marketing at Henry Schein Medical. “Many of these are a response to the impact of COVID-19,” she said.

For example, CMS’s Hospital Without Walls waiver program provided regulatory flexibilities to ASCs and the home setting. This was an attempt to relieve capacity constraints that hospitals had been experiencing at that time, Lewis said. The capacity constraints had been largely cited as a factor driving shifts to the outpatient space with physicians looking to clear their backlog or expedite their ability to serve patients by performing more surgeries at ASCs.

“Beyond COVID, there are forces that we’ve seen propelling siteof-care shifts for the first time, such as the expansion of covered procedures and freestanding surgery settings, and the adoption and utilization of management tactics for those higher complexity, higher cost procedures,” Lewis said. “There’s also greater standardization and specialization of care models, which should enable sameday discharges. And finally, we’ve seen rapid expansion of outpatient access points, particularly for ASCs, which is arguably the top benefactor of the shifts-in-care momentum that we’re currently experiencing in the industry as a whole.”

Lewis, along with Scott Jackson, vice president of surgical solutions, and Erica Smith, surgical solutions manager, were panelists of a recent Henry Schein Medical Webinar on ASC trends. The three Henry Schein Medical leaders provided insights into several topics affecting ASCs.

Growth opportunities abound

While CMS pulled back a bit in 2021 by reinstating the inpatient-only list and removing some 250 procedures from the ASC payable list, there are still a notable number of procedures that remain on the ASC covered list, Lewis said. The continued migration from inpatient to outpatient is primarily driven by ortho, spine and cardiac service lines. Notable orthopedic procedures, such as total knee and total hip procedures, remain on the ASC payable list and represent meaningful revenue and margin implications for hospitals.

Spine surgeries are one of the largest growth opportunities for ASCs. Lewis cited data from HIDA that 88% of spinal pain relief surgeries may be performed in outpatient settings by 2028. “And this growth is fueled by shorter recovery times, increasing payer willingness to reimburse, and less invasive surgical technologies.”

Cardiology was the fastest growing ASC specialty in 2022. “In fact, ASCs are likely to be completing half of all cardiovascular procedures by the mid to late 2020s,” Lewis said.

Consistent with historical shifts, the care shift migration of ortho, spine, and cardiac procedures from the inpatient to outpatient setting is a trend that should continue for at least the next three to five years. “This is driven by the reimbursement gaps between inpatient and outpatient, the evidence of favorable patient outcomes in the outpatient setting, and the convenience factor for patients,” she said.

Costs are going up

ASCs spent on average in aggregate over $6.5 billion every year on medical supplies and equipment, said Jackson. “To put that in perspective, if you look at the typical ASC, they’ll spend roughly 28 cents of every revenue dollar on supplies,” he said. “And when you think about their total expenses to run their facility, that runs just second to labor. We all know that labor costs have risen significantly as well. When running an ASC, the cost of supplies matters a lot, as well as the cost of labor.”

If you put the cost of supplies in comparison to other areas of care, such as hospitals and physician offices, a hospital will spend about 14% of their total budget on supplies, and a physician office will spend about 4%.

“An ASC spending 28 cents of every revenue dollar, certainly it makes the cost portion of the supply chain very relevant to an ASC,” Jackson said. “And then when you think about the device-intensive procedures for spine and orthopedic and cardiac, these are very expensive to perform. Now, yes, they do bring a much higher level of revenue and reimbursement for the typical ASC, but the cost of performing those procedures is significantly higher than what ASCs have been accustomed to with other procedures that they have historically performed within the single and multi-specialty center. The cost of these procedures is going to increase significantly with the types of procedures.”

Inflation’s effect

The other variable that’s impacting the cost equation is inflation. “We all know the pressures that inflation has brought, especially to all of us as consumers, but for ASCs, it has hit them in many impactful ways,” Jackson said.

recoup some of the losses that ASCs have felt from inflationary pressures. One is case costing. “There’s probably not a more singular, more important area for an ASC to manage than their case costing. It gets to the root of what they need to understand to manage their costs.” Being able to understand their cost – not only supply cost, but the cost of labor, overhead, and equipment, will be key.

OR time is also important, because if properly managed, “it allows the ASC to set goals around each one of those procedures and manage to those goals in order to, in some cases, reduce the cost, or in other cases to contain the cost,” Jackson said.

Another other area of opportunity is standardization. “Think about procedure doesn’t get performed. ASCs learned the importance of backup suppliers, contacts and relationships with those suppliers, credit limits and other things that they would need in order to conduct business with someone aside from their primary supplier.

The ASC industry has gone through a lot over the past few years, but one of the biggest challenges was just sourcing products. “I think that was probably one of the biggest takeaways going forward, is the need for a backup plan,” Jackson said.

Tackling burnout and staff shortages

Even before the pandemic, staff shortages and burnout were already on the radar of ASCs. When COVID hit, it was all hands on deck with healthcare staff working 12- to 36-hour shifts to help save lives. “We are definitely seeing staffing shortages from burnout,” Smith said.

A study recently published by the American Hospital Association calculated that the cost of supplies has increased over 20% through the end of 2021 versus pre-COVID. “And that was just through 2021,” he said, “so if you factor in 2022, we have ushered in a whole new round of cost increases for medical products and supplies.”

At the end of 2022, the cost of supplies has risen exponentially for all points of care, hospitals, ASCs, and all cares to service.

Jackson provided several examples of things that can be done to some of these device intensive procedures, and the physician preference items that come into play,” Jackson said. These could be implants, devices, biologics, and some of the specialty equipment. “It’s important that ASCs work to standardize to limit the number of manufacturers they’re working with in order to better negotiate on some of those expensive devices and implants.”

Product availability a consideration

If an ASC doesn’t have the products to perform a procedure, then the

She referenced an OR manager report from 2021 showing open positions for RNs at 40%, and it’s closer to 50% in 2022. For surgical techs, open positions jumped from 28% to 42%. “This is all over ASCs as well as any other healthcare facilities,” Smith said. “We’re seeing these increases of procedures that are able to be performed in the ASC space, which is great, but we don’t have the staff to be able to do it.”

Smith listed several best practices to keep staff, including increased pay, more input on decision making and heightened infection prevention in the facility.

Automation is another key to helping staff track drug expiration dates and follow up with patients. “Where can we automate things where we don’t have to manually do things?” Smith asked.

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Excellent content & amazing subject matter experts.

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All sessions were high quality content and the networking opportunities offered made it easy to engage.

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Enjoyed the purposeful times to network.

WHAT LEADERS EXPERIENCE AT THE SUMMIT:

EMPOWERING critical networking & leadership skills

LEARNING how to be a more confident leader

CONNECTING with others to have a more positive approach

DEVELOPING skills to be better positioned for future career opportunities

ACQUIRING strategies to get a seat at the table

EMBRACING new connections and a new sense of purpose & ambition

GAINING practical takeaways on leadership and success in our industry.