Same-Day Surgery Manager

Changes I have seen over three decades

By Stephen W. Earnhart, MS
Earnhart & Associates
Austin, TX

Thirty years ago, Same-Day Surgery was launched. Such a long time ago. I was only . . . well, younger then. But lots of other things were happening in January 1977.

Gasoline was only $0.64 per gallon. The movie Star Wars (yes, the original) opened. Jimmy Carter was president. CNN still was three years away from beginning its new station. Minimum wage was $2.30 per hour.

A 1977 study conducted by Blue Cross Blue Shield revealed that, on average, procedures performed at ambulatory surgery centers (ASCs) cost 47% less than those same procedures performed on hospital inpatients. This study showed that facility fees for removal of tonsils, for example, cost an average of $464 in an ASC, compared with $998 if the procedure was performed in a hospital. Another example includes cataract surgery, which cost an average $835 in an ASC, compared with $2,012 in a hospital. Repair of inguinal hernia cost $601 in an ASC, compared to facility fees of $1,271 if this procedure were performed in a hospital.

The first ASC was opened in 1970 by a group of anesthesiologists in Phoenix. After that ASC opened, most of the early ambulatory facilities were plastic surgery centers. Only 12% of all surgeries were outpatient in 1977. ASCs more or less languished until about 1982, when safer anesthetic agents and accreditation of centers became the standard. Also, in 1982 Medicare would recognize and begin reimbursing ASCs.

Hospitals were going through changes as well. Back in 1977, management-owned hospital (corporately) accounted for only 6% of all hospitals verses about 40% today. Hospital diagnoses related groups (DRGs) still were six years away. Most reimbursement to hospitals was "cost plus," which meant it was pretty difficult to lose money when you were paid a percentage of what it cost you to provide a service.

The environment in hospitals is less bureaucratic than it used to be — a refreshing change for all of us. There is a greater emphasis on profitability, the physical environment, and efficiency. Unfortunately the efficiency is focused more on the hospital's needs and not on the surgeons, but that focus is improving as well. We just have a way to go.

Members of the nursing staff of hospital surgery departments are becoming more relaxed. It seems to me that the nurses and techs are more comfortable in their roles; there is a higher degree of confidence. I really enjoy working with them at all levels now. A couple of decades ago, many members of the nursing staff resented the top-down autocratic decision making in hospitals. Now, the nurses are the ones that are teaching administration.

Much of the staff in surgery centers, ironically, seem to have become very businesslike — almost too much so. It's hard to put into words, but we might be focusing too much efficiency and profits and losing sight of our other goals.

Probably the biggest change I've observed is in the area of anesthesia staff. They have dramatically changed the way they contract with hospitals and ASCs. They have become lean and very business-like in their dealings. I attribute much of this to consolidation of their industry from small individual groups to large corporately operated machines. Many of the large groups have professional business people running their operations. I have always maintained that a good anesthesia group can make or break a surgical facility. I still believe that statement; it's just that it might cost you more now.

I have seen changes in the surgeons in the hospital and ASC. It really is not the change I would have predicted 30 years ago. Many of the surgeons seem more passive than they were before. This might be that many of the more enterprising surgeons have built their own centers or have retired, but I don't see that strong drive to separate from the hospitals that was so prevalent even 10 years ago. Many of the surgeons are looking at become employees of large health systems. The younger ones (although there are radical exceptions) seem more focused on time off with family, a stable paycheck, and a slower pace than their older partners. The line between the surgeon and the rest of the operating room team is blurring as opposed to the sharp lines of delineation between the two groups in the past. I am not sure if this is because the nursing staff is more business-like or the surgeons are more passive or we are just finally reaching homeostasis. I think there is a greater respect for the job the surgeons do, but they are treated less like royalty and more like a member of the team.

What about the next 30 years? I definitely will be around to give my reflections in 2037. But I think we will see the end of the independent surgeon and corporately owned surgery centers. I do believe that hospitals, once they understand the business of business, will come back and acquire and assimilate the existing surgery centers under their umbrella. All surgeons and anesthesia will be employees of large health care systems. Much of how health systems (vs. "hospitals") operate will be converted into large urban centers where patients will be forced to come to them, versus small community hospitals in every town. There will be suburban surgical facilities, but they will focus more on nuts-and-bolts surgery and the more complex procedures such as brain transplants and spinal cord replacements will be sent to the larger, urbanized centers.

What about consultants? I do see a continued need to pay someone a fee to essentially tell you what you already know or don't need to know in the first place. Thank heavens for that!

[Earnhart & Associates is an ambulatory surgery consulting firm specializing in all aspects of surgery center development and management. Contact Earnhart at 1000 Westbank Drive, Suite 5B, Austin, TX 78746. E-mail: Web:]