How to Transform Your Ambulatory Surgery Strategy for Value-Based Care

Surgery has been transitioning from inpatient to outpatient care for decades. In response, most health systems have invested heavily in ambulatory surgery centers (ASCs), often in partnership with surgeon shareholders. This strategy has helped hospitals retain a share of surgical volume even as the market shifted dramatically.

The rise of value-based care is altering the landscape of outpatient surgery, however, and in the process, it is challenging long-held assumptions about ASC strategy.

Traditionally, a hospital-owned ASC has served as a tool for maintaining volume by improving patient service and leveraging key physician relationships. Although these are still important drivers of ambulatory strategy, hospital leaders today must incorporate ambulatory surgery into a complex system of care that delivers improved outcomes while controlling costs. These outcome, cost, and quality improvement goals are delineated by new value-based payment models that have significant implications for ASC operations and clinical care design. As a result, the ambulatory surgery model that has worked successfully for the last 25 years is rapidly becoming obsolete.

To succeed under value-based care, most hospitals need to transform their ambulatory surgery strategy. Physician leaders can support this strategic shift by helping their colleagues understand the underlying trends, redesign the clinical care model, create an exceptional experience for surgery patients, and develop a balanced approach to facility planning.

Understand the Underlying Trends

In the three decades before 2011, the share of surgical procedures performed on an outpatient basis increased from 19 percent to more than 60 percent.(1) The pace of this transition has accelerated for many procedures. For example, the percentage of hysterectomies performed in an outpatient setting recently increased from 36 percent to 64 percent in just four years.(2)

Several clinical factors are driving this trend, including advances in technology, surgical technique, pain management, and post-surgical rehabilitation. Financially, all payers see ASCs as an important tool for bringing down the cost of care. For instance, the Centers for Medicare & Medicaid Services (CMS) saves 34 percent on unicompartmental knee arthroplasty performed in an ASC as opposed to a hospital.(3)

Looking forward, ambulatory surgery appears to be poised for a new burst of growth. According to one forecast, hospital inpatient surgery volumes will decline 3 percent between 2018 and 2028. During the same period, procedure volumes will increase 19 percent in hospital outpatient settings and 30 percent in ASCs.(4)

While these trends make outpatient strategy a priority for hospital systems, the rise of bundled payments and other value-based models is complicating the transition. Value-based payment models have a significant financial impact on surgical services organizations and they have extensive implications for how ASCs must manage clinic operations and clinical care in the coming years (see Table 1).

By 2022, approximately half of reimbursement for surgical care will be tied to healthcare value. The current strategic challenge is to take advantage of growing demand for ambulatory surgery while creating a delivery model that optimizes surgical outcomes, patient satisfaction, and cost efficiency.

Redesign the Care Model Around Surgical Value

In the emerging ambulatory environment, a general focus on clinical quality is no longer enough. Cost and outcome pressures built into value-based payment demand that ASCs adopt a delivery model that optimizes every aspect of clinical care and operations. Physician leaders can support care model redesign by helping their colleagues focus on three key opportunities:

1. Care coordination and standardization. Poor coordination of care is a factor in poor patient outcomes; it also can drive unnecessary spending. To redesign an ambulatory surgery strategy for value-based care, healthcare leaders must create organizational structures that harmonize providers, patient data, operational processes, clinical protocols, and patient pathways across the entire spectrum of surgical care, from pre-operative prep through intraoperative care and long-term recovery.

Until recently, ambulatory surgery centers have focused on getting patients safely through their procedure while the patient was at the facility. ASCs must now take responsibility, with the surgeon, for supporting the patient post-discharge and ensuring their procedure was successful in terms of resolving the underlying reason for surgery — for example, reduction in knee pain for a knee replacement procedure or reduction in sinus infections for an endoscopic sinus surgery.

One effective approach is the perioperative surgical home (PSH), a surgical care model analogous to the “patient-centered medical home.” Under the “traditional” surgery model, patients receive services from an array of loosely organized providers and units (surgeon, scheduling, pre-admission testing, anesthesia, OR nursing, PACU, floor, rehabilitation, etc.). Poor coordination of these providers can result in suboptimal care, resource inefficiency, and a disjointed care experience for patients.

In contrast, the PSH model focuses on optimizing surgical care through full interdisciplinary coordination, pathway standardization, and team-based decision making.(5) A recent review of more than 150 studies showed that PSH initiatives consistently lead to improvement in surgical quality and patient outcomes.(6)

The surgical home approach can be very effective in the ASC setting. For example, a Los Angeles-area hospital recently reported on efforts to apply the PSH model to ambulatory laparoscopic cholecystectomy. The highly choreographed protocol involves dozens of elements, including multimodal analgesia, procedure batching, instrument standardization, streamlined hand-offs, careful follow-up procedures, and ongoing quality tracking.

Adoption of this model reduced unplanned hospital admissions from 8.5 percent to 1.7 percent and also significantly reduced total time in the hospital.(7) The model also included several protocols that helped reduce post-operative nausea and vomiting (PONV). PONV has a major impact on patient satisfaction, which is an important component of value-based care reimbursement.

The PSH model is especially important for outpatient surgery reimbursed under a bundled-payment program. Since the model encompasses pre-, intra-, and post-operative care, it can help align ASC operations with bundles that cover the entire 90-day episode of care.

2. Predictive analytics. One of the biggest challenges to succeeding under value-based care is operational efficiency. High case-cancellation rates (>1 percent), low on-time start rates (< 90 percent), long turnovers (> 25 minutes), and low overall utilization (< 60 percent) push costs up and erode margins.

Historically, lean staffing and streamlined processes at the typical ASC have helped create more efficient environments. As ASCs face more capped payments, leaders in outpatient surgery must wring additional waste out of scheduling structures and processes.

Leading ASCs are using predictive analytics to gain a highly granular picture of patient volumes per day and per hour. They use this analysis to design schedules that ensure room availability closely matches demand. Appropriate room capacity helps prevent the bottlenecks that can slow down patient throughput. It also helps optimize labor costs by minimizing staffing during times of low demand.

3. Performance measurement. ASCs in general have a good record on quality. Traditionally, however, most outpatient quality programs have focused on acute and near-term measures such as wrong-site surgery, patient falls and burns, and hospital transfers.

To achieve high performance under value-based payment, ASCs need to expand their performance metrics to encompass the entire episode of care. For example, physician leaders can play a key role by helping ASCs develop systems for tracking long-term outcomes.

One good model is measure ASC-11: improvement in patient’s visual function within 90 days following cataract surgery. Data submission for this measure is still voluntary under the Ambulatory Surgical Center Quality Reporting (ASCQR) program,(8) but this metric underscores the fact that CMS intends to focus increasingly on long-term outcomes.

Similar measures could be put in place for other procedures. For example, to monitor its hip arthroplasty program, an ASC might begin tracking not just early mobilization rates but physical mobility 3 and 6 months after surgery. The focus should be not just whether the procedure was “successful” when the patient left the facility, but whether the surgery succeeded in resolving the patient’s original health problem.

Create an Excellent Patient Experience

The patient’s experience of care is an important component of the Value-Based Purchasing (VBP) program and other government and private payer initiatives. As organizations redesign their ASC strategy, physicians can play a key role by supporting a focus on improving the patient experience before surgery, during the ASC stay, and over the recovery period.

There are three priorities:

1. Expand services to provide complete disease support. Traditionally, successful ASCs have focused on a single specialty or a narrow range of procedures, such as ophthalmology or arthroscopic knee surgery. While this approach offers important efficiencies, ASCs today must widen their focus by offering patients complete support in managing their disease. The model is no longer the focused factory, but the full-service surgical health center.

For example, an orthopedics center might expand from its core arthroscopy services to include a full range of minimally invasive and open orthopedic surgeries, including joint replacement. It might also add advanced imaging services, in-house pain management specialists, physical and occupational therapy, and other related services. Under this model, the ASC encompasses both surgical care and the full range of services to support patient health goals.

Comprehensive facilities can also offer non-surgical treatment modalities such as high-intensity focused ultrasound (HIFU), a non-invasive treatment for several kinds of malignant and benign tumors.(9) For patients with prostate cancer, for instance, HIFU can be an important alternative to an open invasive procedure. For ASCs, the strategic opportunity will be to build market share by providing a comprehensive array of complementary services. Physician leaders can play a critical role by helping their organizations evaluate these treatments and understand how they can support ASC strategy.

2. Make patient engagement a priority. Under value-based care, patient engagement must be a key component of delivery model design. More engaged patients are more likely to have a positive patient experience and comply with caregiver directives, which helps prevent poor outcomes.

Successful ASCs secure patient engagement by emphasizing communication. ASC leaders should develop systems for delivering pre-procedure education and communicating expectations, conveying discharge instructions, and following up at 24, 48, and 72 hours post-discharge.

Many leading surgery organizations are exploring opportunities to use smartphone apps to improve surgery outcomes. Uses include delivering pre-operative medication instructions, post-operative symptom tracking and alerts, and the ability to submit wound site photos for specialist review.(10)

3. Create a culture obsessed with patient satisfaction. In 2016, CMS began implementing the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery (OAS CAHPS) Survey.(11) Although voluntary participation has been extended, data from the survey are now publicly available and mandatory participation cannot be far off. In response, leading ASCs are developing an organized approach to patient satisfaction.

An effective patient satisfaction strategy includes consistent monitoring of OAS CAHPS results, use of physician dashboards to track individual performance, structured follow-up on low outliers, and systems for rewarding high performance and performance improvement. Note that provider organizations are permitted to add up to 15 additional questions to the OAS CAHPS. This enables leaders to create a highly customized instrument for measuring patient satisfaction and creating targeted improvements.

Take a Strategic Approach to Facility Planning

Should a health system structure a new surgery center as a hospital outpatient department (HOPD) or a true off-campus ASC? This has always been a complex decision involving state regulation and local market dynamics. In the current environment, however, OR leaders must help their executive colleagues understand several additional issues:

First, what is the sentiment within the physician community? Where surgeons are eager to take more control over care delivery, there is often a strong opportunity to build an off-campus ASC as a joint venture. Conversely, in communities where many physicians have opted for hospital employment, an on-campus HOPD may be more convenient for staff surgeons.

Second, where is the best opportunity to create an excellent patient experience? In many cases, the best option is to start with a clean slate: Build an off-campus ASC that offers state-of-the-art facilities and a consumer-like experience. However, achieving this goal on campus is possible. The key is to make sure the HOPD is entirely separate from the main OR, with a dedicated facility, leadership, and staff.

Third, what payment opportunities are available? Currently, reimbursement is higher for procedures performed at an on-campus HOPD than at an off-campus ASC, but the differential is certain to shrink in the coming years. At the same time, the lower cost structure of an off-campus ASC could help a hospital secure preferred provider status with private payers and contract directly with self-insured employers. It could also help the organization offer lower out-of-pocket costs to patients, which is especially important as patient-pay balances grow.

Case Study: Benefits of Value-Based ASC Strategy

An urban hospital in the Midwest demonstrates that a comprehensive approach to outpatient surgery is critical to achieving the goals of value-based care.

Situation. The hospital is located in a disadvantaged neighborhood within a large metropolitan area. To balance the effects of an unfavorable payer mix, hospital leaders sought to increase penetration in an adjacent geography offering better reimbursement opportunities. The hospital’s existing market share in the target region was only 5 percent.

Challenges. The hospital’s initial strategy was to construct a physician office building in the target market; however, oversaturation in the area led to financial losses with no improvement in market penetration. Returning to the drawing board, hospital leaders shifted their focus to outpatient surgery, yet realized that a traditional freestanding surgery center was unlikely to succeed in the relatively affluent geography. Any new ASC would need to offer comprehensive surgical health services.

Strategy. Hospital leaders began by identifying a core group of entrepreneurial surgeons willing to partner on a new off-campus ASC. Thanks to the market’s growing population, securing a Certificate of Need (CON) was comparatively straightforward. The ASC was structured as a joint venture, with the hospital as the general partner and the surgeon group as minority investors. In addition to surgical suites, the new facility included diagnostic imaging (CT and MRI), a radiation oncology clinic, an emergency room, and office space for both primary care physicians and specialists.

Under the governance of a physician-led Surgical Services Executive Committee (SSEC), the ASC emphasized clinical optimization through evidence-based medicine and operational efficiency. Surgeon scorecards were used to create accountability around key value-based metrics, and anesthesiologist and nursing compensation was carefully aligned with quality and efficiency goals.

Outcomes. The opportunity to build clinical and operational workflows from scratch enabled the ASC to deliver high-quality care and a positive patient experience while also providing exceptional service to surgeons. Surgical volumes grew rapidly through the first 24 months of operation, allowing the facility to quickly achieve profitability without cannibalizing procedure volume from the main hospital OR.

Within a few years, the ASC was consistently delivering annual ROI of 25 percent. Eventually, an academic medical center in the region chose to affiliate with the hospital, citing the hospital’s comprehensive outpatient surgery network as a key rationale for the partnership.

Focus on Core Elements

This case study illustrates several key lessons for hospitals that aim to update their ambulatory surgery strategy for the value-based environment.

1. Any initiatives to standardize and coordinate surgical care must be championed and executed by physician leaders. In the case study above, a surgeon-dominated SSEC led all efforts to create evidence-based care protocols and orchestrate care processes. Physician leadership is essential to creating true healthcare value in terms of better outcomes and lower costs and to meeting the demands of value-based payment models.

2. A strong performance measurement strategy is essential to progress. At the ASC in this case study, provider dashboards helped focus all physicians on specific clinical and cost targets and overall value-based goals.

3. A patient-centered approach to surgical care is an important key to success. In the case discussed above, ASC leaders developed a full-spectrum surgical care strategy designed to secure patient engagement, optimize patient outcomes, and maximize patient satisfaction.

4. The key to an effective facility strategy is finding the right balance among market dynamics, reimbursement, surgeon aspirations and politics. For the healthcare organization discussed above, an off-campus joint venture ASC was the right solution, but the best arrangement will vary for every hospital, surgical staff and community.

Physician leaders can play a key role in ASC strategy redesign by helping their colleagues understand and implement the core elements of a modern approach: clinical optimization, careful facility planning, an emphasis on patient satisfaction, and integration of outpatient surgery into a comprehensive system of care. An ASC strategy built on these elements is positioned to thrive under a payment system that rewards quality of care, cost control and excellent patient outcomes.

References

1. Munnich E, Parente S. Procedures Take Less Time at Ambulatory Surgery Centers, Keeping Costs Down and Ability to Meet Demand Up. Health Affairs. 2014;33(5):764–69. doi:10.1377/hlthaff.2013.1281

2. Blue Cross Blue Shield. How Consumers Are Saving with the Shift to Outpatient Care: Blue Cross Blue Shield. bcbs.com. 2019. https://www.bcbs.com/the-health-of-america/reports/how-consumers-are-saving-the-shift-outpatient-care . Accessed July 19, 2019.

3. U.S. Centers for Medicare & Medicaid Services. Procedure Price Lookup for Outpatient Services. Medicare.gov. https://www.medicare.gov/procedure-price-lookup . Accessed July 19, 2019.

4. Sg2. Utilization Trends Across the Continuum: Transitions in Care Symposium; 2018.

5. American Society of Anesthesiologists. Perioperative Surgical Home. asahq.org . https://www.asahq.org/psh . Accessed July 19, 2019.

6. Kash B, Zhang Y, Cline K, Menser T, Miller T. The Perioperative Surgical Home (PSH): A Comprehensive Review of US and Non-US Studies Shows Predominantly Positive Quality and Cost Outcomes. Milbank Quarterly. 2014;92(4):796–821. doi:10.1111/1468-0009.12093

7. Qiu C, Rinehart J, Nguyen V, et al. An Ambulatory Surgery Perioperative Surgical Home in Kaiser Permanente Settings. Anesthesia & Analgesia. 2017;124(3):768–774. doi:10.1213/ane.0000000000001717

8. ASC Quality Reporting: Centers for Medicare & Medicaid Services. cms.gov. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ASC-Quality-Reporting/index.html . Accessed July 19, 2019.

9. Maloney E, Hwang J. Emerging HIFU Applications in Cancer Therapy. Int J Hyperthermia. 2015;31(3):302–09. doi:10.3109/02656736.2014.969789

10. De La Cruz Monroy M, Mosahebi A. The Use of Smartphone Applications (Apps) for Enhancing Communication with Surgical Patients: A Systematic Review of the Literature. Surg Innov. 2019;26(2):244–259. doi:10.1177/1553350618819517

11. Agency for Healthcare Research & Quality. CAHPS Outpatient and Ambulatory Surgery Survey. ahrq.gov. https://www.ahrq.gov/cahps/surveys-guidance/oas/index.html . Accessed July 19, 2019.