Hospital payments for outpatient services rise faster compared to ASCs

Image removed.The prices for procedures at hospital outpatient departments have increased in recent years at a much higher rate than ambulatory surgical centers (ASCs), according to a study published in Health Affairs.

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ASCs have become more common as a cost-effective alternative for some inpatient procedures, although experts continue to question their overall safety.

Kathleen Carey, a professor at the Boston University School of Public Health, crunched claims payment data from Truven Analytics for her study, which compared prices for six common outpatient procedures in 2007 versus 2012.

The mean private insurer payment to an ASC to perform a colonoscopy increased 15.5 percent between 2007 and 2012, from $701 to $810, according to the study. But for hospitals, the mean payment rose from $900 to $1,221, an increase of 35.7 percent. 

The price gap between the two surgical ventures was even starker for a knee arthroscopy with debridement. At an ASC, the mean payment increased 32.3 percent, from $1,695 to $2,142. But for outpatient surgery centers at hospitals, the mean payment rose 76.7 percent, from $1,278 to $2,258.

Medicare rates were significantly lower than those paid by private insurers, but there remained a significant price gap between what ASCs and hospitals were paid. Medicare paid ASCs $1,324 in 2007 to perform that knee arthroscopy with debridement, compared to $2,111 to hospitals. In 2012--after changes in 2008 to the Medicare ASC payment system intended to keep their payments neutral when compared to hospitals--the payment to ASCs increased to $1,515, compared to $2,492 for hospitals.

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The study concluded that hospitals tend to have more bargaining power with insurers than do ASCs, which perform far fewer services for which rates need to be negotiated. And Carey suggested that while many ASCs perform Medicare work, questions remain as to whether some cost-shifting to private payers is occurring for these procedures.

To learn more:
- read the Health Affairs study abstract

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