Serving as the president of Massachusetts Association of Ambulatory Surgery Centers and administrator of Boston Out-Patient Surgical Suites, Gregory DeConciliis says Massachusetts can very well be defined as a hospital-driven town.
"We have some powerful hospitals here, many of which are big teaching hospitals," says Mr. DeConciliis. "I believe hospitals have a very strong [presence] in the eyes of patients, insurers, politicians and the Department of Health. As president of our state ASC association, I have a tough time lobbying for our needs because we don't have a ton of ASCs."
There are currently around 60 surgery centers in the state and the relationship between the state's hospitals and surgery centers has been adversarial at times, especially with many of the leading health systems employing a significant chunk of physicians. Mr. DeConciliis has noticed a major increase in hospital employment since Boston Out-Patient Surgical Suites opened its doors in 2004.
"Hospital employment is extremely limiting to ASCs, and could threaten their long-term survival if it's a geographic issue," Mr. DeConciliis says.
When hospital-employed physicians refer a patient to an ASC or another practice outside of that hospital, the hospital may take away referrals from that physician. Those physicians therefore often refer patients to hospitals so they do not face any monetary punishment, Mr. DeConciliis explains. However, the industry is demanding physicians lower the cost of care, leading some hospitals and health systems to consider moving cases to surgery centers. One such example is Auburndale, Mass.-based Atrius Health. The health system recently purchased a stake in Boston Out-Patient Surgical Suites, with the surgery center successfully performing the state's first total joint replacement in a freestanding surgery center. A knee replacement in the Boston area typically costs $25,000 to $35,000 in inpatient facilities, whereas freestanding outpatient surgery centers typically provide these procedures at an expected 40 to 50 percent reduction of that cost.
While this partnership is promising for surgery centers in the state, Mr. DeConciliis says Atrius Health's model is a "rarity" at this point in time as many organizations and accountable care organizations have a hospital within their system that drive cases back to their facility.
"Hospitals are more apt to have employed physicians direct referrals back to the hospital to maintain the business [despite] it making make sense to have employment drive value-based care and patient referrals back to cost-effective facilities," Mr. DeConciliis says.
The tides for surgery centers may be turning, though, with state officials taking a few leaps forward in allowing ASCs to successfully operate in the state. Following years of advocacy by the MAASC,on Jan. 11, 2017, the Massachusetts Department of Public Health updated its regulations to allow existing freestanding ASCs to apply for a Determination of Need without an acute care hospital affiliation. The DPH will continue to mandate applicants submitting plans to build a new ASC to affiliate with either a Health Policy Commission-certified ACO or existing independent community hospital.
While the regulatory changes did not go as far as the MAASC requested, and some language in the regulations may be limiting for surgery centers, Mr. DeConciliis considers the updates a win. Prior to the new regulations, surgery centers had to be affiliated with an acute care hospital to make basic changes such as a transfer of ownership, a capital expenditure or to add a DON-required service, among other changes.
"With the recent DON regulations overall, ASCs were placed on more of a level playing field with hospitals. There are limitations in terms of cost and scale, but generally speaking, they were given the ability to now grow and expand as needed and that’s very positive," Mr. DeConciliis says.