Cost Savings

Not only are ASCs focused on ensuring that patients have the best surgical experience possible, they also provide cost-effective care that save the government, third party payors and patients money. Because ASCs are highly specialized and function on a much smaller scale, they are able to provide services at a lower price than a full-service hospital.

Since 1982, when Medicare began reimbursing ASCs, the industry has saved the program billions of dollars. With approximately 5,300 Medicare-certified facilities across all 50 states, ASCs perform more than 25 million procedures each year. On average, Medicare saves $2.3 billion annually when surgical procedures are performed at ASCs instead of hospital outpatient departments (HOPDs). Click here to understand why. Likewise, Medicaid and other insurers benefit from lower prices for services performed in the ASC setting.

In addition, patients typically pay less coinsurance for procedures performed in the ASC than for comparable procedures in the hospital setting. For example, a Medicare beneficiary could pay as much as $353 in coinsurance for a cataract extraction procedure performed in a hospital outpatient department, whereas that same beneficiary's copayment in the ASC would be only $195.

Without the emergence of ASCs as an option for care, health care expenditures would have been tens of billions of dollars higher over the past four decades. Private insurance companies tend to save similarly, which means employers also incur lower health care costs when employees utilize ASC services. For this reason, both employers and insurers have recently been exploring ways to incentivize the movement of patients and procedures to the ASC setting.

What the Experts are Saying

An analysis by researchers at the prominent University of California-Berkeley Nicholas C. Petris Center on Health Care Markets and Consumer Welfare finds that ASCs provide billions of dollars in savings to the Medicare program and its beneficiaries. Specifically, Berkeley’s researchers found that ASCs saved Medicare $7.5 billion over the four-year period from 2008 to 2011. Going forward, ASCs have the potential to save the Medicare system an additional $57.6 billion over the next decade. Click here to read the entire study.

A report by the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) found that outpatient surgical procedures performed in ASCs have saved Medicare more than $1 billion in each of the last several years—and have the potential for even greater savings in the future. As a result of the cost-savings that ASCs offer, the report concludes, “…Medicare saved almost $7 billion and beneficiaries saved an additional $2 billion during CYs 2007 through 2011. Also, Medicare and beneficiaries could save an additional $12 billion and $3 billion, respectively, during CYs 2012 through 2017.” Click here to read the full report.

A study published in Health Affairs finds that ASCs save money and increase efficiency for Medicare, insurers and patients alike, while providing the same high quality care as HOPDs. The study, conducted by health economists Elizabeth Munnich of the University of Louisville and Stephen Parente of the University of Minnesota, concludes that “ASCs are a high-quality, lower-cost substitute for hospitals as venues for outpatient surgery.” The full study can be read in the May 2014 issue of Health Affairs.