Payers can reduce surgical costs by 59 percent by shifting eligible members from the hospital outpatient setting to ambulatory surgery centers.
Ambulatory surgery centers are care sites that offer surgical procedures, diagnostics, and preventive care services, according to the Ambulatory Surgery Center Association. These sites are not provider offices, rural healthcare clinics, or urgent or ambulatory care centers. The types of services that they offer include ophthalmology, orthopedics, and pain management.
UnitedHealth Group researchers studied the claims data on regular outpatient procedures for the twelve months ending in February 2020. The researchers filtered out procedures that required a hospital setting and focused on cases that could have been conducted in an ambulatory surgery center.
For patients who had access to an ambulatory surgery center, UnitedHealth Group calculated the difference between the cost of their hospital visit and the cost of an ambulatory surgery center visit. The researchers applied out-of-pocket healthcare spending policies for their fully-insured and self-funded employer clients to determine out-of-pocket consumer cost savings.
The data showed that ambulatory surgery centers can lower costs for hospital outpatient procedures by 59 percent for non-complex individuals under commercial insurance plans.
In 2019, the typical hospital outpatient procedures cost about 144 percent of the cost of the same procedure in an ambulatory surgery center environment. Common hospital outpatient procedures cost, on average, over $7,700. However, the same procedures in an ambulatory surgery center setting cost slightly less than $3,160.
As a result, payers and providers have the opportunity to reduce consumer costs by $684 on average for outpatient procedures by shifting non-complex members and patients over to ambulatory surgery centers for care.
The researchers highlighted two key obstacles to using ambulatory surgery centers for common procedures.
First, UnitedHealth Group acknowledged that some members have more complex conditions. Obesity, end stage renal disease, and other serious conditions can create complications for common surgical procedures, making the hospital the safest site of care for such surgeries.
However, the claims analysis also found that 10 percent of the six million claims that the researchers studied qualified as complex procedures.
The other challenge that might prevent members from being able to utilize a lower-cost ambulatory surgery center for their surgical procedures is access to a facility. Over a third of the six million claims that study analyzed (35 percent) were for members who did not have an ambulatory surgery center near their homes, ruling out this cost-saving option for them.
Nevertheless, most of the claims that the researchers assessed would have been less expensive if the procedures had occurred in an ambulatory surgery center setting, the UnitedHealth Group researchers concluded.
These findings corroborate a previous UnitedHealth Group analysis which uncovered that ambulatory surgery centers could save private payers $2 billion per year on joint surgeries and $1 billion in cost savings for public payers such as Medicare. Members who used ambulatory surgery centers had very low risk of infection and hospital admissions post-discharge.
Outpatient care accounts for six cents of the average member’s premium dollar, part of which goes toward ambulatory surgery centers.
As healthcare costs continue to escalate, payers and employers are looking for ways to cut costs.
Reducing low-value care is a key step to diminishing healthcare spending and promoting value-based care practices.
Researchers estimate that between 10 and 20 percent of healthcare spending can be considered low-value spending, such as sending a patient to an expensive hospital for a procedure that would cost much less at a different site of care. Payers may turn to existing lists of low value care practices in order to eradicate these practices and reduce spending.