Are outpatient surgery centers leading the way for pricing transparency? Already these innovative medical facilities also called “ambulatory surgery centers” (ASCs), have made waves in healthcare for offering lower-cost alternatives to hospital procedures in their surgery center prices. We took a look at the trend and saw that Congress is now on board for Medicare and Medicaid reimbursement of surgery center procedures.
“There’s a growing movement in the United States for transparent and fixed pricing for predictable services, and this study suggests that the market rewards such practices,” says Martin Makary, M.D., M.P.H., a professor of surgery at the Johns Hopkins University School of Medicine and leader of the study. — from an article on outpatient surgical centers in Eurek Alert
In a 2016 article in Real Clear Health, an example was given for how one ASC in Oklahoma is bucking the usual situation of unpublished prices with later anesthesia billings, etc., by giving an up-front comprehensive quote on cost. The article makes a comparison with the old Soviet Union that obscured pricing for services and compares that directly with US healthcare pricing. Fast forward to 2018 and at the US National Library of Medicine National Institutes of Health site, a recent study found that “among five centers that reported their patient volume and revenue after adopting pricing transparency, patient volume increased by a median of 50 percent (range 10-200%) at one year.”
But that same study also notes that “the leading barrier reported to making prices transparent was a discouragement from another practice, hospital, or insurance company.” Meanwhile, ASCs likePacific Surgical Institute in Washington State continue to use pricing transparency as a competitive weapon. As their website states, “Pacific Surgical Center in Longview Washington is providing a revolutionary service within the healthcare industry: transparency pricing. Being at the forefront of this movement in the United States is very exciting for us and represents the ability to help our patients with simplified medical care. We serve patients from all across the United States and even from Canada and internationally.”
For its part, the Ambulatory Surgery Association, founded in 2005, has seen the results of lobbying efforts culminate in the Ambulatory Surgical Center (ASC) Payment Transparency Act of 2018. Passed this July, Modern Healthcare is reporting that “Supporters of the bill say it will save Medicare and Medicare beneficiaries money by allowing the lower-cost ambulatory surgery centers to perform a greater array of procedures.”
On its site, the Association CEO states, “data show that ASCs deliver excellent patient outcomes at a lower cost than similar sites of service,” stated ASCA Chief Executive Officer William Prentice. “This legislation will assure better communication between ASCs and government agencies that regulate us, leading to better decisions that will benefitMedicare beneficiaries requiring outpatient surgery. We are grateful that these provisions have bipartisan support in the House and look forward to their consideration in the Senate soon.”
It looks like transparency for ambulatory surgery center prices is here to stay. Becker’s ASC had a recent post detailing how 16 ASCs are embracing this practice, including:
- The physician-owned St. George Surgical Center (Utah) offers online procedure pricing for more than two dozen services. The prices include facility fees, surgeon’s fees, anesthesia fees, standard implants and hardware and up to 23-hour overnight/extended stay for certain procedures.
- Avalon Surgery Center’s (Glendale, Calif.) website displays pricing for more than100 procedures. The costs include fees for the facility, surgeon, and anesthesiologist, as well as the initial consultation and uncomplicated follow-up care.
- Seaside Surgery Center (Naples, Fla.). Seaside Surgery Center posted all-inclusive orthopedic surgery pricing on its website in December 2017. The ASC was designed and built exclusively for same-day joint replacements.
We’ve reported before on how hospitals struggle with pricing transparency and how slow its adoption is, generally, in healthcare. Maybe, in the end, it will be the transparency of surgery center prices that force the change. AMSURG, a large surgery center management company with more than2,000 physician partners at 245+ ambulatory surgery center locations across the United States, state the case like this on their website: “Multiple factors, including health care reform and the rise of high deductible health plans, are transforming patients into consumers and pushing the development of multiple tools and platforms for them to attempt to determine the price of the health care they need to receive.” But on that same page, AMSURG also notes that low price is often associated with low quality and states this caution: “the need for such a strategy varies by market and a clear consensus about the ‘best’ option to choose has yet to emerge.”
What about the price versus quality debate? HealthAffairs.org posted a recent study (PDF) that found that “presenting cost data alongside easy-to-interpret quality information and highlighting high-value options improved the likelihood that consumers would choose those options. Reporting strategies that follow such a format will help consumers understand that a doctor who provides higher-quality care than other doctors does not necessarily cost more.” The researchers looked at both quality signals (i.e. star ratings) and cost reporting for healthcare services in general — not just ASCs. In their summation, they lean toward quality as a deciding factor, writing that “when a quality signal is not strong, cost information is less likely to be interpreted and used in the way it was intended. In reports that present data on both cost and quality, even more, is at stake when the reporting strategies used are ineffective. With quality information alone, the risk of providing information that is hard to understand is that it is less likely to be used. When cost data are added, the risk is that the information will stimulate people to make choices opposite to the ones intended.” For ASCs, this could mean transparency in pricing along with quality reporting will go a long way toward growing their business.