Massachusetts hospitals get a greater share of insurance payments for performing ambulatory surgeries and procedures than ASCs do, according to a recent analysis. While state hospitals have experienced an increase in such outpatient spending, freestanding surgery centers have in comparison seen a decline.
In its first annual report on healthcare costs and payment trends, issued last month, the Massachusetts Office of Health and Human Services examines the spectrum of healthcare spending to seek out the roots of the state's high medical costs. Among its findings are the following statistics:
2% of spending went to ASCs.
Between 2006 and 2008, the amount spent on ASCs declined 14%.
23% of spending went to hospital outpatient departments.
Between 2006 and 2008, the amount spent on hospital outpatient departments increased 26.4%.
The report's analysts attribute the decline in ASC reimbursements to closings or hospital acquisitions and affiliations, and they speculate that the performance of outpatient procedures and services in hospitals has in part driven the increase in healthcare costs.
In a published report, state HHS Secretary JudyAnn Bigby, MD, says that the data showing hospital outpatient expenses on the rise surprised her. "That is different from what I'd been hearing from hospitals, saying that these services have been leaving them and going to freestanding outpatient facilities competing with them," she said.
In a letter to Dr. Bigby, Massachusetts Association of Ambulatory Surgery Centers President Linda K. Rahm says she was "pleased, but not surprised" by the report's findings.
"Frankly, this is the message the MAASC has been delivering to state policy-makers for over 20 years," writes Ms. Rahm, administrator of the Pioneer Valley Surgicenter in Springfield, Mass. "Outpatient care provided in hospital-based or -affiliated facilities is expensive because it carries the hospital overhead. These exact same procedures can be safely and effectively delivered at freestanding ambulatory surgery centers... for a fraction of the cost."
Ms. Rahm argues that the lower cost may be a result of Medicare's paying ASCs 59% of what it pays hospitals for the same services. She also points out that state regulations effectively barring the development and growth of freestanding surgery centers (of which the state has 65) to protect hospitals' outpatient revenues limits the benefits they offer.
"For outpatient services, a little competition will go a long way toward reducing cost without compromising on quality," she writes.
The state HHS has scheduled a series of public hearings for March 16, 18 and 19 to interview healthcare players, including ASC administrators, and propose solutions on the subject of healthcare costs.
David Bernard
