Maximizing Profitability at Ambulatory Surgery Centers (Relatable.com)
ASC Device-Intensive Procedures are Growing
Device-intensive procedures in Ambulatory Surgery Centers (ASC) are growing once again in 2019 with 131 new procedures for Medicare beneficiaries. Payment methodology is modified for certain device-intensive procedures each year which the device offset percentage is higher than 30% of the median cost OPPS, meaning the cost of the device is a significant amount of the cost of providing the service.
As one would expect, third-party payers will follow with coverage and payment significantly driving down the cost of outpatient care compared to inpatient procedures. The result of this shift in site service care will result in more ASC facilities being built to keep up with demand and growing same facility surgeries by adding higher acuity cases like joint replacement and spine procedures.
Higher Revenue Per Case Procedures
Service line expansion of higher acuity procedures may require new strategies including physician requirement, practice development and driving patient access through managed care strategies. Knowing exactly what the implant costs are prior to growing patient volume for high acuity cases is critical for a positive return on investment for ASCs. Achieving best price for high cost implants requires excellent physician communication when bridging optimal clinical treatment and economic choice.
Here are 11 statistics on net revenue per case by ASC specialty based on the VMG Health 2018 Multi-Specialty ASC Benchmarking Survey.
1. Orthopedic surgery: $3,458
2. Gynecology: $2,933
3. Podiatry: $2,688
4. Urology: $2,483
5. Otolaryngology: $2,543
6. General surgery: $2,235
7. Plastic surgery: $2,010
8. Pain Management: $1,245
9. Ophthalmology: $1,221
10. Gastroenterology: $1,027
11. Oral surgery: $950
(Not including the 12 new cardiovascular procedures approved by CMS this year)
Move Toward Regional or Nationally Negotiated ASC Device Supplier Contracts
Historically, ASCs have local or facility price agreements for devices typically negotiated between administrators and local sales representatives to gain the business with physician relationships earned at nearby inpatient hospitals. The challenge with most ASC facilities is that administrators wear many hats to support operations to control costs, increase caseload and supporting quality patient care, not allowing 100% focus on price negotiations.
Additionally, device companies priority is to protect price and potential price erosion at high volume inpatient hospitals or IDNs therefor making it challenging to negotiate best price at lower volume ASC facilities. ASC management companies will need to step in to negotiate regional or national volume or compliance based contracts with device suppliers finding a new common ground for best price aligning with the growing device intensive ASC procedures with lower or managed care reimbursements.
Relatable Healthcare is an enterprise business intelligence platform to address one of healthcare provider’s greatest challenges – effectively reducing implantable medical device spend. Relatable streamlines how medical device product data is sourced and analyzed, providing objective clinical and economic relationships allowing administrators and surgeons to make informed contracting decisions to reduce costs.
For more information contact: Clark Charlton, Chief Strategy Officer at Relatable Healthcare, Email clark@relatable.io