Pennsylvania Ambulatory Surgery Association Responds to Criticism of ASC Business Model

The Pennsylvania Ambulatory Surgery Association responded on Tuesday to recent arguments that the growth of ambulatory surgery centers jeopardizes patient access to Medicare and Medicaid services, according to a release.

The Hospital and Healthsystem Association of Pennsylvania recently criticized the ASC business model by comparing hospital and ASC profit margin rates and highlighting the fact that hospitals serve a higher percentage of Medicaid patients than surgery centers. The HAP drew data from the Pennsylvania Health Care Cost Containment Council's annual report.

Pam Ertel, president of the Pennsylvania Ambulatory Surgery Association and executive director of Reading Hospital SurgiCenter in Spring Ridge, Pa., issued the following comment on the response from HAP:

"We believe that the information that the PHC4 report contains must be examined carefully to begin to provide an accurate reflection of the true value that Pennsylvania ASCs provide.

First, the PHC4 report clearly states that the ASC and hospital profit margin rates provided in the report cannot be compared directly because of the different methods used to calculate those statistics. For ASCs, for example, the disbursements (or salaries) that are paid to the physician owners are not counted as overhead. This would be similar to removing all staff salaries from the operating costs of the hospitals before calculating their margins, which would increase significantly using that methodology.  

Also, the total margin for most for-profit ASCs does not reflect income tax expenses. By comparison, total margins for Pennsylvania's for-profit general acute care hospitals are calculated after the tax expense is deducted.

Additionally, while it is true that hospitals service a higher percentage of Medicaid patients — 11.8 percent vs. 4.5 percent for ASCs — one must consider how a patient is referred for surgery in an ASC. Historically, many Medicaid patients enter a hospital through the emergency room or clinic and end up being referred to the hospital outpatient department for a procedure.  Most patients who have a procedure performed in an ASC are referred by a treating physician.

Consider also that ASCs are — by design — a convenient, personalized, lower-priced alternative to hospitals. Built-in efficiencies reduce overheard. For example, ASCs allow better control over scheduling, so procedures are not often delayed or rescheduled due to staffing issues or competing demands for operating room space from emergency cases."

Learn more about the Pennsylvania Ambulatory Surgery Association.

Related Articles on ASC Association Issues:
Comment Period on New Jersey PIP Benefits Proposal Extended
NJ Surgery Center Leadership Proposed Regulations Will Force Outpatient Procedures to Become Inpatient
Preparing for an ACO-Like Model: Thoughts From OASCA Board Member David Schlactus

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