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Health Affairs, 22, no. 6 (2003):
55
doi: 10.1377/hlthaff.22.6.55 © 2003 by Project HOPE |
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Outpatient Surgery |
PROLOGUE
The Outpatient Surgery Controversy
PROLOGUE: Is opening a boutique an example of elitism or entrepreneurial spirit? For the hospital industry, this question is more than academic. Specialized hospitals and ambulatory surgical centers (ASCs) are perceived either as unfair competition or exemplary innovators, depending on your point of view. To the hospital administrator who must staff and operate a full-service hospital and provide care to any and all comers, specialized hospitals and ASCs appear to be cherry picking the "best" and healthiest patients. Not only that, but in the population under age sixty-five, such facilities can limit their patients to those with health insurance coverage. This cuts deeply into hospitals’ incomes—and profits. Others would argue that specialized hospitals and ASCs provide patient-centered, high-quality care in the most efficient setting; any rewards that accrue to the investors are the result of increased efficiency, not patient selection or referrals from physician-owners. Congress, responding to pressures from all sides, has threatened to ban physician referrals to hospitals in which they have ownership interests. This could put specialized hospitals out of business and set back possible quality innovations, or, on the other hand, it could finally "level the playing field."
The two papers that follow frame this debate in measurable terms. Larry Casalino and colleagues take a close look at where and why specialized hospitals are emerging and who owns them. This market segment is growing rapidly, especially in states with limited certificate-of-need legislation. How is this growth affecting existing hospitals? Do competing facilities increase access to care, or does the carving out of more lucrative services by specialized hospitals reduce hospitals’ ability to provide care to the indigent? With input from administrators of large medical groups, hospitals, and health plans around the country, Casalino and colleagues lay out the risks associated with a market that might be more regulated in the future but now provides opportunities to the intrepid.
Ariel Winter, an analyst with the Medicare Payment Advisory Commission (MedPAC), presents "the numbers" in his paper that focuses on outpatient surgery settings. He offers a first cut at the cost and risk comparisons, analyzing the health status of patients receiving services at ASCs and hospital outpatient departments. Are hospitals "stuck" with the higher-risk, more medically complex cases but reimbursed at the same rate as the ASCs? Then Winter documents some of the effects of the Medicare reimbursement rates for each setting and proposes alternative ways of evaluating and assigning payment rates. This is just the kind of information members of Congress are asking for as they confer on Medicare legislation. It’s also what investors, be they individuals or federal fiscal regulators, look for as they target their investments.
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