Revamping surgery in the outpatient area
By Stephen W. Earnhart, MS
Earnhart & Associates
By every standard, outpatient surgery is growing. The recession took a bite out of it, with many patients delaying elective surgery until they obtained new positions and health insurance. However, by and large, most facilities are seeing resurgence in cases again in the hospital outpatient departments (HOPDs) and freestanding centers.
Plastic surgery is booming, helping patients "groom" themselves for new jobs and an older workforce wanting to compete against their younger-appearing competition. It is working.
The split between inpatient and outpatient cases is widening as technology, treatment modalities, advances in anesthetic agents, and patients wanting to be home sooner grows. Most inpatient surgical cases in the acute care setting are patients who are spending only one night in the hospital for pain control or for surgeons insecure about sending them home the same day. It is clearly only a matter of time before these cases will become surgery center procedures only, with no HOPD reimbursement at all.
Many single specialty surgery centers are borderline underperforming. GI, ophthalmic, and pain centers are struggling as their reimbursement has significantly changed over the past several years. Intended as single specialty-only centers from inception, it has been difficult to retool these centers due to smaller operating rooms, lack of expansion space, and hoarding of ownership over the years, which meant not allowing new surgeons into the partnership. Eventually these cases will become office procedures only, with no facility reimbursement at all.
While the freestanding industry is seeing a 1.6% bump in Medicare facility fees and the hospital-based cases are seeing a 1.9% increase, it will not make a material difference to either in the long run. It is folly to expand hospital surgical environments to accommodate surgical cases that will not be profitable. With many underperforming surgery centers closing across the country and inexpensive operating rooms empty in others, it is time to revamp these services in a manner that works for all.
To most surgeons who work in a surgery center environment, the thought of taking cases back into the hospital system of perceived bureaucracy is abhorrent to them. For hospitals, trying to appease surgeons who are accustomed to 10-minute turnaround times and running their centers like a business, it is a "no-win" scenario for most hospital CEOs.
However, there is an obvious solution for the outpatient surgery industry: having hospitals absorb these closed surgery centers and buy out underperforming surgery centers with far less cash than would be needed to build hospital operating rooms.
Involving the surgeons to run these new off-site extensions of acute care hospitals is critical to the success of the ventures. While the surgeons would not be able to be investors in the sites, they still could be profitable by managing the centers in a similar fashion as they were accustomed to in the past.
With the budget changes and with healthcare costs out of control, the time is here to think out the current arrangement. [Earnhart & Associates is a consulting firm specializing in all aspects of outpatient surgery development and management. Contact Earnhart at 13492 Research Blvd., Suite 120-258, Austin, TX 78750-2254. E-mail: email@example.com. Web: www.earnhart.com. Twitter: @SurgeryInc.]