By Mark Taylor, Post-Tribune correspondent
It's a perfect storm for ambulatory surgery centers nationwide. The economy is taking its toll, particularly on elective surgeries. But the centers also are being hit by changes in reimbursement and agreements between hospitals and insurers. The changes have been drastic enough so that some centers have closed.
Leaders of ambulatory surgery center associations said the model for delivering surgical care to patients in outpatient settings is generally healthy, but they are starting to the see the effects of the economic turndown.
"Medicare introduced a new reimbursement system in 2008 that affected many ASCs quite dramatically. Gastroenterology procedures account for a great deal of ASC volume and Medicare cut payments for screening colonoscopies by 5 percent in 2008 and will reduce payments by 7 percent in 2009," she said. "And when Medicare acts, private insurers usually follow."
Bryant said another issue impacting ASCs is exclusive contracting by hospitals with health plans. This occurs when a hospital or health system agrees to lower prices for a health insurer in exchange for demands that it be the preferred in-network provider, meaning patients pay higher out of pocket and co-pay costs to use surgery centers and other non-hospital provider services. Surgery centers, which typically have less clout and fewer financial resources than hospitals in their markets, sometimes get shut out or close when faced with such hardball contracting tactics.
"It's hard for a small provider to compete with these big health systems and rebound from that," she said. "Insurance contracting and cuts in reimbursement in certain areas are the top problems facing ASCs."
She did point out that in some regions of the country heavily dependent upon manufacturing, big local layoffs have cut demand for elective surgeries.
"Health insurance is tied to work and people without insurance aren't usually getting surgery performed unless it's urgent," she said. "We're starting to see patients postponing elective surgeries. This will affect ASCs in the long run, but depending on the region, it hasn't been too tough lately. But in areas with many auto and farm equipment plants, along with steel and suppliers, ASCs could be affected."
She said ASCs are already efficient operations with minimal staffing and little fat to trim.
"Part of the problem is we're already pretty lean, so it will be harder for us to cut costs," she said.
Carol Blanar, a nurse who serves as the administrator and director of nursing for Sagamore Surgical Services in Lafayette, is the executive director of the Indiana Federation of Ambulatory Surgical Centers, a state trade and lobbying group for surgery centers. Blanar said the greatest challenge facing Indiana surgery centers is low reimbursement.
"Medicare restricts our reimbursement," she said. "We're getting closer to what hospitals receive for procedures, but it's still less. They (CMS, the federal agency that administers Medicare) don't think we have the expenses, even though we have supply and personnel costs. But we adapt to all these reductions and we're very efficient."
Blanar said that surgery centers are examining their expenses, trying to secure better pricing from suppliers and control their labor and overhead costs.
Blanar said one trend she's seeing is physician-owned surgery centers selling out to hospitals. "Hospitals used to come at us legislatively and try to close us down, but they wised up and instead of fighting us in state legislatures, they're buying us up," she said. "Some hospitals are doing joint ventures ASCs with physicians."