Hospital competition and financial performance: the effects of ambulatory surgery centers

Outcomes and Cost-Effectiveness of Hospital Outpatient Versus Ambulatory Surgery Center Lumbar Decompression Surgery

STUDY DESIGN

Retrospective Chart Review.

OBJECTIVES

Outpatient spinal surgeries in Ambulatory Surgery Centers (ASCs) have gained traction due to their potential cost efficiencies and improved perioperative processes. This study aims to compare the cost-effectiveness and patient outcomes of lumbar laminectomies performed in hospital settings vs ASCs.

METHODS

A retrospective analysis was conducted on 771 patients who underwent 1 or 2-level outpatient laminectomy between 2019 and 2023. Patient demographics, 90-day and one-year clinical and patient-reported outcomes (PROs), and one-year episode of care costs were evaluated. A one-year cost-effectiveness analysis was performed using the EQ-5D to measure quality-adjusted life years (QALYs).

RESULTS

ASC patients demonstrated lower body mass index and American Society of Anesthesiologists (ASA) scores, with a higher prevalence of 1-level laminectomies compared to hospital patients. ASC-based laminectomy was associated with lower initial surgery cost and one-year episode of care costs ($5662 ± 4748 vs $10229 ± 9202, P < 0.001), with similar rates of complications and postoperative resource utilization. These trends remained after controlling for patient demographics, comorbidities, and number of levels treated. In patients completing baseline and 1-year EQ-5D scores, ASC-based laminectomy was over twice as cost-effective as hospital procedures ($64873/QALY gained vs $152630).

CONCLUSIONS

The findings support the safety and one-year cost effectiveness of ASCs for appropriately selected patient populations undergoing lumbar laminectomy. Additional studies are needed to replicate these findings across institutions, and to assess the cost effectiveness of ASC-based laminectomy beyond one-year postoperatively.

Cerebral angiography in outpatient endovascular centers: roadmap and lessons learned from interventional radiology, cardiology, and vascular surgery

A growing proportion of percutaneous procedures are performed in outpatient centers. The shift from hospitals to ambulatory surgery centers and office-based laboratories has been driven by a number of factors, including declining reimbursements, increased patient demand, and competition for hospital resources. This transition has been dominated by the interventional radiology, cardiology, and vascular surgery fields. Cerebral angiography, in contrast, is still performed almost exclusively in a hospital-based setting, despite sharing many features with other endovascular procedures commonly performed in outpatient centers. As interest grows in performing cerebral angiography in outpatient endovascular centers, much can be learned from the decades of experience that our interventional colleagues have in the outpatient setting. In this article we examine the outpatient experience of other interventional fields and apply key principles to evaluate the prospect of outpatient neurointervention. The literature suggests that cerebral angiography can feasibly be performed in an outpatient center in both private and academic settings, as some groups have begun to do. Outpatient endovascular centers have helped to improve the patient experience, liberate inpatient resources, and control costs in other interventional fields, and might offer neurointerventionalists an opportunity to do the same.

Does hospital competition improve the quality of outpatient care? - empirical evidence from a quasi-experiment in a Chinese city

BACKGROUND

Although countries worldwide have launched a series of pro-competition reforms, the literature on the impacts of hospital competition has produced a complex and contradictory picture. This study examined whether hospital competition contributed to an increase in the quality of outpatient care.

METHODS

The dataset comprises encounter data on 406,664 outpatients with influenza between 2015 and 2019 in China. Competition was measured using the Herfindahl-Hirschman index (HHI). Whether patients had 14-day follow-up encounter for influenza at any healthcare facility, outpatient facility, and hospital outpatient department were the three quality outcomes assessed. Binary regression models with crossed random intercepts were constructed to estimate the impacts of the HHI on the quality of outpatient care. The intensity of nighttime lights was employed as an instrumental variable to address the endogenous relationship between the HHI and the quality of outpatient care.

RESULTS

We demonstrated that an increase in the degree of hospital competition was associated with improved quality of outpatient care. For each 1% increase in the degree of hospital competition, an individual's risk of having a 14-day follow-up encounter for influenza at any healthcare facility, outpatient facility, and hospital outpatient department fell by 34.9%, 18.3%, and 20.8%, respectively. The impacts of hospital competition on improving the quality of outpatient care were more substantial among females, individuals who used the Urban and Rural Residents Basic Medical Insurance to pay for their medical costs, individuals who visited accredited hospitals, and adults aged 25 to 64 years when compared with their counterparts.

CONCLUSION

This study demonstrated that hospital competition contributed to better quality of outpatient care under a regime with a regulated ceiling price. Competition is suggested to be promoted in the outpatient care market where hospitals have control over quality and government sets a limit on the prices that hospitals may charge.

Private equity and healthcare firm behavior: Evidence from ambulatory surgery centers

Healthcare firms regularly seek outside capital; yet, we have an incomplete understanding of external investor influence on provider behavior. We investigate the effects of private equity investment, divestment, and an initial public offering (IPO) on ambulatory surgery centers (ASCs). Throughput is unchanged while charges grow by up to 50% for the same service mix. Affected ASCs witness declines in privately insured cases and rely more on Medicare business. Private equity increases physician ASC ownership stakes, and both simultaneously divest when the ASC is sold. Our findings appear more consistent with private equity influencing the financing of ASCs, rather than treatment approaches.

Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients

Medicare pricing is known to indirectly influence provider prices and care provision for non-Medicare patients; however, Medicare's regulatory externalities beyond fee-setting are less well understood. We study how physicians' outpatient surgery choices for non-Medicare patients responded to Medicare removing a ban on ambulatory surgery center (ASC) use for a specific procedure. Following the rule change, surgeons began reallocating both Medicare and commercially insured patients to ASCs. Specifically, physicians became 70% more likely to use ASCs for the policy-targeted procedure among their non-Medicare patients. These novel findings demonstrate that Medicare rulemaking affects physician behavior beyond the program's statutory scope.

Long-run growth of ambulatory surgery centers 1990-2015 and Medicare payment policy

OBJECTIVE

To examine long-run growth in the ambulatory surgery center (ASC) industry and potential factors influencing its trajectory.

DATA SOURCES

National data for all Medicare-certified ASCs (1990-2015) and outpatient discharge records from the state of Florida in 2007.

STUDY DESIGN

We documented the number of ASCs in the United States over time and decomposed the trend into underlying ASC market entry and exit behavior. We then examined the plausibility of 2008 Medicare payment reforms to influence the trend changes.

DATA EXTRACTION METHODS

Data on ASC openings and closures are obtained from the Centers for Medicare and Medicaid Services Provider of Service files. Secondary data on ASC volume in Florida are obtained from the Florida Agency for Health Care Administration.

PRINCIPAL FINDINGS

The number of ASCs in the United States grew 5%-10% annually between 1990 and 2007 but by 1% or less beginning in 2008. This change coincided with substantive reductions in Medicare payments for key ASC services. The annual number of new ASCs was as much as 50% lower following the payment change.

CONCLUSIONS

ASCs are an important competitor for outpatient services, but growth has slowed dramatically. Sharp changes in new ASC entry align with less generous Medicare fees.

Treatment consolidation after vertical integration: Evidence from outpatient procedure markets

Hospital ownership of physician practices has grown across the US, and these strategic decisions seem to drive higher prices and spending. Using detailed physician ownership information and a universe of Florida discharge records, we show novel evidence of hospital-physician integration foreclosure effects within outpatient procedure markets. Following hospital acquisition, physicians shift nearly 10% of their Medicare and commercially insured cases away from ambulatory surgery centers (ASCs) to hospitals and are up to 18% less likely to use an ASC at all. Altering physician choices over treatment setting can be in conflict with patient and payer cost, convenience, and quality preferences.

Recent Trends in Medicare Utilization and Reimbursement for Orthopaedic Procedures Performed at Ambulatory Surgery Centers

BACKGROUND

As part of a market-driven response to the increasing costs of hospital-based surgical care, an increasing volume of orthopaedic procedures are being performed in ambulatory surgery centers (ASCs). The purpose of the present study was to identify recent trends in orthopaedic ASC procedure volume, utilization, and reimbursements in the Medicare system between 2012 and 2017.

METHODS

This cross-sectional, national study tracked annual Medicare claims and payments and aggregated data at the county level. Descriptive statistics and multivariate regression models were used to evaluate trends in procedure volume, utilization rates, and reimbursement rates, and to identify demographic predictors of ASC utilization.

RESULTS

A total of 1,914,905 orthopaedic procedures were performed at ASCs in the Medicare population between 2012 and 2017, with an 8.8% increase in annual procedure volume and a 10.5% increase in average reimbursements per case. ASC orthopaedic procedure utilization, including utilization across all subspecialties, is strongly associated with metropolitan areas compared with rural areas. In addition, orthopaedic procedure utilization, including for sports and hand procedures, was found to be significantly higher in wealthier counties (measured by average household income) and in counties located in the South.

CONCLUSIONS

This study demonstrated increasing orthopaedic ASC procedure volume in recent years, driven by increases in hand procedure volume. Medicare reimbursements per case have steadily risen and outpaced the rate of inflation over the study period. However, as orthopaedic practice overhead continues to increase, other Medicare expenditures such as hospital payments and operational and implant costs also must be evaluated. These findings may provide a source of information that can be used by orthopaedic surgeons, policy makers, investors, and other stakeholders to make informed decisions regarding the costs and benefits of the use of ASCs for orthopaedic procedures.

Cost-effectiveness and cost-benefit analysis of oliceridine in the treatment of acute pain

Aim: Oliceridine, a new class of μ-opioid receptor agonist, is selective for G-protein signaling (analgesia) with limited recruitment of β-arrestin (associated with adverse outcomes) and may provide a cost-effective alternative versus conventional opioid morphine for postoperative pain. Patients & methods: Using a decision tree with a 24-h time horizon, we calculated costs for medication and management of three most common adverse events (AEs; oxygen saturation <90%, vomiting and somnolence) following postoperative oliceridine or morphine use. Results: Using oliceridine, the cost for managing AEs was US$528,424 versus $852,429 for morphine, with a net cost savings of $324,005. Conclusion: Oliceridine has a favorable overall impact on the total cost of postoperative care compared with the use of the conventional opioid morphine.

Decreased costs with maintained patient satisfaction after total joint arthroplasty in a physician-owned hospital

Objective

Comparing total joint arthroplasty (TJA) costs and patient-reported outcomes between a physician-owned hospital (POH) and a non-POH.

Methods

Costs for each 90-day TJA episode at both facilities were determined, and patients were asked to complete a patient satisfaction questionnaire.

Results

Average TJA episode cost was $19,039 at the POH, compared to $21,302 at the non-POH, a difference of $2,263 (p = 0.03), largely driven by decreased skilled nursing facility utilization in the POH group. There were no differences between groups for patient satisfaction.

Conclusion

TJA can be performed at reduced cost with comparable patient satisfaction at POHs, compared to non-POH facilities.

The impact of Maryland's payment reforms on hospital community benefit efforts

BACKGROUND

In 2014, Maryland established a global budget policy for all hospitals in the state. Under this policy, hospitals are incentivized to not only provide clinical care services to individual patients but also address the health needs of their broader patient population through prevention efforts and investment in the upstream social and economic factors that determine health.

PURPOSE

To better understand the incentives created for hospitals under this policy, our study assessed whether the implementation of global budgets changed the levels and patterns of Maryland hospitals' investments in community benefits.

APPROACH

Data on hospital community benefit spending from the Internal Revenue Service Form 990 Schedule H for the years 2010-2016 were utilized for this study.

RESULTS

We found that Maryland hospitals' total spending on community benefits decreased under the global budget policy. Unlike hospitals in similar states without a global budget policy, Maryland hospitals did not experience any increases in Medicaid shortfalls between 2014 and 2016. Although Maryland hospitals provided more subsidized health services, their investment in broader community health improvement activities remained unchanged.

CONCLUSION

Our analysis suggests that Maryland hospitals have shifted strategies because of the implementation of the global budget policy. The ability to report community benefit in a way that accurately considers the context and constraints of a state's policies would provide hospitals better means of communicating these efforts to stakeholders.

PRACTICE IMPLICATIONS

Our results suggest that global budgets impact the levels and patterns of hospitals' community benefit investments.

Editor's Choice - A Cost Effectiveness Analysis of Outpatient versus Inpatient Hospitalisation for Lower Extremity Arterial Disease Endovascular Revascularisation in France: A Randomised Controlled Trial

OBJECTIVE

The AMBUVASC trial evaluated the cost effectiveness of outpatient vs. inpatient hospitalisation for endovascular repair of lower extremity arterial disease (LEAD).

METHODS

AMBUVASC was a national multicentre, prospective, randomised controlled trial conducted in nine public and two private French centres. The primary endpoint was the incremental cost effectiveness ratio (ICER), defined by cost per quality adjusted life year (QALY). Analysis was conducted from a societal perspective, excluding indirect costs, and considering a one month time horizon.

RESULTS

From 16 February 2016 to 29 May 2017, 160 patients were randomised (80 per group). A modified intention to treat analysis was performed with 153 patients (outpatient hospitalisation: n = 76; inpatient hospitalisation: n = 77). The patients mainly presented intermittent claudication (outpatient arm: 97%; inpatient arm: 92%). Rates of peri-operative complications were 20% (15 events) and 18% (14 events) for the outpatient and inpatient arms respectively (p = .81). Overall costs (difference: €187.83; 95% confidence interval [CI] -275.68-651.34) and QALYs (difference: 0.00277; 95% CI -0.00237 - 0.00791) were higher for outpatients due to more re-admissions than the inpatient arm. The mean ICER was €67 741 per QALY gained for the base case analysis with missing data imputed using multiple imputation by predictive mean matching. The outpatient procedure was not cost effective for a willingness to pay of €50 000 per QALY and the probability of being cost effective was only 59% for a €100 000/QALY threshold.

CONCLUSION

Outpatient hospitalisation is not cost effective compared with inpatient hospitalisation for endovascular repair of patients with claudication at a €50 000/QALY threshold.

Safety of vascular interventions performed in an office-based laboratory in patients with low/moderate procedural risk

OBJECTIVE

An exponential increase in number of office-based laboratories (OBLs) has occurred in the United States, since the Center for Medicare and Medicaid Services increased reimbursement for outpatient vascular interventions in 2008. This dramatic shift to office-based procedures directed to the objective to assess safety of vascular procedures in OBLs.

METHODS

A retrospective analysis was performed to include all procedures performed over a 4-year period at an accredited OBL. The procedures were categorized into groups for analysis; group I, venous procedures; group II, arterial; group III, arteriovenous; and group IV, inferior vena cava filter placement procedures. Local anesthesia, analgesics, and conscious sedation were used in all interventions, individualized to the patient and procedure performed. Arterial closures devices were used in all arterial interventions. Patient selection for procedure at OBL was highly selective to include only patients with low/moderate procedural risk.

RESULTS

Nearly 6201 procedures were performed in 2779 patients from 2011 to 2015. The mean age of the study population was 66.5 ± 13.31 years. There were 1852 females (67%) and 928 males (33%). In group I, 5783 venous procedures were performed (3491 vein ablation, 2292 iliac vein stenting); with group II, 238 arterial procedures (125 femoral/popliteal, 71 infrapopliteal, iliac 42); group III, 129 arteriovenous accesses; and group IV, 51 inferior vena cava filter placements. The majority of procedures belonged to American Society of Anesthesiology class II with venous (61%) and arterial (74%) disease. A total of 5% patients were deemed American Society of Anesthesiology class IV (all on hemodialysis). There was no OBL mortality, major bleed, acute limb ischemia, myocardial infarction, stroke, or hospital transfer within 72 hours. Minor complications occurred in 14 patients (0.5%). Thirty-day mortality, unrelated to the procedure, was noted in 9 patients (0.32%). No statistically significant differences were noted in outcomes between the four groups.

CONCLUSIONS

Our data suggest that it is safe to use OBL for minimally invasive, noncomplex vascular interventions in patients with a low to moderate cardiovascular procedural risk.

Disruptive life event or reflexive instrument? On the regulation of hospital mergers from a quality of care perspective

PURPOSE

Despite the continuation of hospital mergers in many western countries, it is uncertain if and how hospital mergers impact the quality of care. This poses challenges for the regulation of mergers. The purpose of this paper is to understand: how regulators and hospitals frame the impact of merging on the quality and safety of care and how hospital mergers might be regulated, given their uncertain impact on quality and safety of care.

DESIGN/METHODOLOGY/APPROACH

This paper studies the regulation of hospital mergers in The Netherlands. In a qualitative study design, it draws on 30 semi-structured interviews with inspectors from the Dutch Health and Youth Care Inspectorate (Inspectorate) and respondents from three hospitals that merged between 2013 and 2015. This paper draws from literature on process-based regulation to understand how regulators can monitor hospital mergers.

FINDINGS

This paper finds that inspectors and hospital respondents frame the process of merging as potentially disruptive to daily care practices. While inspectors emphasise the dangers of merging, hospital respondents report how merging stimulated them to reflect on their care practices and how it afforded learning between hospitals. Although the Inspectorate considers mergers a risk to quality of care, their regulatory practices are hesitant.

ORIGINALITY/VALUE

This qualitative study sheds light on how merging might affect key hospital processes and daily care practices. It offers opportunities for the regulation of hospital mergers that acknowledges rather than aims to dispel the uncertain and potentially ambiguous impact of mergers on quality and safety of care.

Outpatient Total Hip Arthroplasty Performed at an Ambulatory Surgery Center vs Hospital Outpatient Setting: Complications, Revisions, and Readmissions

BACKGROUND

Outpatient total hip arthroplasty (THA) utilization continues to grow. Literature suggests outpatient THA may result in low rates of complications and readmission. There are no studies comparing safety profiles of THA performed at ambulatory surgery centers (ASC) vs hospital outpatient (HOP) settings.

METHODS

Prospectively collected data were reviewed on all patients who underwent THA from 2013 to 2018. ASC and HOP subgroups were compared, investigating difference in demographics, comorbidities, American Society of Anesthesiologists subgroups, all complications, revisions, emergency department (ED) visits, and readmissions within the first 90 days of surgery. An additional subgroup analysis of patients younger than 65 years was performed.

RESULTS

Two surgeons performed 3063 THAs during the study period, including 965 outpatient cases (ASC = 335; HOP = 630). Thirty-seven (3.8%) complications occurred within 90 days. No differences were found between groups for 90-day complication rates (ASC = 13, 3.9%; HOP = 24, 3.8%; P = .48), revision rates (ASC = 0, 0%; HOP = 2, .3%; P = .30), all-cause reoperation rates (ASC = 1, 0.3%; HOP = 5, 0.8%; P = .35), ED visits (ASC = 3, 0.9%; HOP = 2, 0.3%; P = .23), or readmission rates (ASC = 2, 0.6%; HOP = 9, 1.4%; P = .25).

CONCLUSION

THA can be safely performed in both ASC and HOP settings with low 90-day postoperative complication, revision, reoperation, ED visit, and readmission rates. Based on the populations studied, we identified no statistically significant differences in rates of complications between ASC and HOP groups.

Comparing methods of grouping hospitals

OBJECTIVE

To compare the performance of widely used approaches for defining groups of hospitals and a new approach based on network analysis of shared patient volume.

STUDY SETTING

Non-federal acute care hospitals in the United States.

STUDY DESIGN

We assessed the measurement properties of four methods of grouping hospitals: hospital referral regions (HRRs), metropolitan statistical areas (MSAs), core-based statistical areas (CBSAs), and community detection algorithms (CDAs).

DATA EXTRACTION METHODS

We combined data from the 2014 American Hospital Association Annual Survey, the Census Bureau, the Dartmouth Atlas, and Medicare data on interhospital patient travel patterns. We then evaluated the distinctiveness of each grouping, reliability over time, and generalizability across populations.

PRINCIPLE FINDINGS

Hospital groups defined by CDAs were the most distinctive (modularity = 0.86 compared to 0.75 for HRRs and 0.83 for MSAs; 0.72 for CBSA), were reliable to alternative specifications, and had greater generalizability than HRRs, MSAs, or CBSAs. CDAs had lower reliability over time than MSAs or CBSAs (normalized mutual information between 2012 and 2014 CDAs = 0.93).

CONCLUSIONS

Community detection algorithm-defined hospital groups offer high validity, reliability to different specifications, and generalizability to many uses when compared to approaches in widespread use today. They may, therefore, offer a better choice for efforts seeking to analyze the behaviors and dynamics of groups of hospitals. Measures of modularity, shared information, inclusivity, and shared behavior can be used to evaluate different approaches to grouping providers.

Firm responses to targeted consumer incentives: Evidence from reference pricing for surgical services

This paper examines how health care providers respond to a reference pricing insurance program that increases consumer cost sharing when consumers choose high-priced surgical providers. We use geographic variation in the population covered by the program to estimate supply-side responses. We find limited evidence of market segmentation and price reductions for providers with baseline prices above the reference price. Finally, approximately 75% of the reduction in provider prices is in the form of a positive externality that benefits a population not subject to the program.

Is Outpatient Unicompartmental Knee Arthroplasty Safe to Perform at an Ambulatory Surgery Center? A Comparative Study of Early Post-Operative Complications

BACKGROUND

Unicompartmental knee arthroplasty (UKA) lends itself to the outpatient surgical setting. Prior literature has established a low rate of readmission and post-operative complications when performed in a hospital outpatient setting (HOP). To our knowledge, there have been no studies comparing complications of UKA performed at an ambulatory surgery center (ASC) and those in a HOP.

METHODS

We retrospectively reviewed all patients who underwent outpatient UKA by a single surgeon from 2012 to 2016. In all 569 outpatient UKAs were performed: 288 in the ASC group and 281 in the HOP group. We compared the groups with regard to all complications within the first 90 days after surgery.

RESULTS

Thirty minor and major complications occurred within 90 days (5.3%). There was no difference in the overall complication rate between groups (ASC 12, 4.2%; HOP 18, 6.4%) (P = .26). Day of surgery admission occurred once in the HOP group (0.4%) and did not occur in the ASC group (P = .49). There was 1 visit to the emergency department (ED) <24 hours from surgery in each group (ASC 0.3%, HOP 0.4%) (P = 1.0). ED visits occurred within 7 days in 3 ASC cases (1.0%) and 4 HOP cases (1.4%) (P = .72). Re-admissions in the first 90 days occurred in 5 ASC cases (1.7%) and 8 HOP cases (2.8%) (P = .41).

CONCLUSION

UKA at an ASC has a low early postoperative complication rate without increased risk of re-admission or ED evaluation when compared to UKAs performed at a HOP.

Returns to specialization: Evidence from the outpatient surgery market

Technological changes in medicine have created new opportunities to provide surgical care in lower cost, specialized facilities. This paper examines patient outcomes in ambulatory surgery centers (ASCs), which were developed as a low-cost alternative to outpatient surgery in hospitals. Because we are concerned that selection into ASCs may bias estimates of facility quality, we use predicted changes in federally set Medicare facility payment rates as an instrument for ASC utilization to estimate the effect of location of treatment on patient outcomes. We find that patients treated in an ASC are less likely to be admitted to a hospital or visit an emergency room a short time after outpatient surgery. The findings in this paper indicate that factors other than patient and physician heterogeneity contribute to the observed returns to specialization in the ASC market.

Specialization as an Organizing Principle: The Case of Ambulatory Surgery Centers

Ambulatory surgery centers (ASCs) recently have grown to become the dominant provider of specific surgical procedures in the United States. While the majority of ASCs focus primarily on a single specialty, many have diversified to offer a wide range of surgical specialties. We exploited a unique data set from Pennsylvania for the years 2004 to 2014 to conduct an empirical investigation of the relative cost of production in ASCs over varying degrees of specialization. We found that for the majority of ASCs, focus on a specialty was associated with lower facility costs. In addition, ASCs appeared to be capturing economies of scale over a broad range of service volume. In contrast to studies of cost efficiency in specialty hospitals, our results provide evidence that supports the focused factory model of production in the ASC sector.

Reconsidering the Affordable Care Act's Restrictions on Physician-Owned Hospitals: Analysis of CMS Data on Total Hip and Knee Arthroplasty

BACKGROUND

Concerns about financial incentives and increased costs prompted legislation limiting the expansion of physician-owned hospitals in 2010. Supporters of physician-owned hospitals argue that they improve the value of care by improving quality and reducing costs. The purpose of the present study was to determine whether physician-owned and non-physician-owned hospitals differ in terms of costs, outcomes, and patient satisfaction in the setting of total hip arthroplasty (THA) and total knee arthroplasty (TKA).

METHODS

With use of the U.S. Centers for Medicare & Medicaid Services (CMS) Inpatient Charge Data, we identified 45 physician-owned and 2,657 non-physician-owned hospitals that performed ≥11 primary TKA and THA procedures in 2014. Cost data, patient-satisfaction scores, and risk-adjusted complication and 30-day readmission scores for knee and hip arthroplasty patients were obtained from the multiyear CMS Hospital Compare database.

RESULTS

Physician-owned hospitals received lower mean Medicare payments than did non-physician-owned hospitals for THA and TKA procedures ($11,106 compared with $12,699; p = 0.002). While the 30-day readmission score did not differ significantly between the 2 types of hospitals (4.48 compared with 4.62 for physician-owned and non-physician-owned, respectively; p = 0.104), physician-owned hospitals had a lower risk-adjusted complication score (2.83 compared with 3.04; p = 0.015). Physician-owned hospitals outperformed non-physician-owned hospitals in all patient-satisfaction categories, including mean linear scores for recommending the hospital (93.9 compared with 87.9; p < 0.001) and overall hospital rating (93.4 compared with 88.4; p < 0.001). When controlling for hospital demographic variables, status as a non-physician-owned hospital was an independent risk factor for being in the upper quartile of all inpatient payments for Medicare Severity-Diagnosis Related Group (MS-DRG) 470 (odds ratio, 3.317; 95% confidence interval, 1.174 to 9.371; p = 0.024), which may be because of a difference in CMS payment methodology.

CONCLUSIONS

Our findings suggest that physician-owned hospitals are associated with lower mean Medicare costs, fewer complications, and higher patient satisfaction following THA and TKA than non-physician-owned hospitals. Policymakers should consider these data when debating the current moratorium on physician-owned hospital expansion.

LEVEL OF EVIDENCE

Therapeutic Level III. See Instructions for Authors for a complete description of levels of evidence.

Association of Hospital Market Concentration With Costs of Complex Hepatopancreaticobiliary Surgery

IMPORTANCE

Trade-offs involved with market competition, overall costs to payers and consumers, and quality of care have not been well defined. Less competition within any given market may enable provider-driven increases in charges.

OBJECTIVE

To examine the association between regional hospital market concentration and hospital charges for hepatopancreaticobiliary surgical procedures.

DESIGN, SETTING, AND PARTICIPANTS

This study included all patients undergoing hepatic or pancreatic resection in the Nationwide Inpatient Sample from January 1, 2003, through December 31, 2011. Hospital market concentration was assessed using a variable-radius Herfindahl-Hirschman Index (HHI) in the 2003, 2006, and 2009 Hospital Market Structure files. Data were analyzed from November 19, 2016, through March 2, 2017.

INTERVENTIONS

Hepatic or pancreatic resection.

MAIN OUTCOMES AND MEASURES

Multivariable mixed-effects log-linear models were constructed to determine the association between HHI and total costs and charges for hepatic or pancreatic resection.

RESULTS

Weighted totals of 38 711 patients undergoing pancreatic resection (50.8% men and 49.2% women; median age, 65 years [interquartile range, 55-73 years]) and 52 284 patients undergoing hepatic resection (46.8% men and 53.2% women; median age, 59 years [interquartile range, 49-69 years]) were identified. Higher institutional volume was associated with lower cost of pancreatic resection (-5.4%; 95% CI, -10.0% to -0.5%; P = .03) and higher cost of hepatic resection (13.4%; 95% CI, 8.2% to 18.8%; P < .001). For pancreatic resections, costs were 5.5% higher (95% CI, 0.1% to 11.1%; P = .047) in unconcentrated hospital markets relative to moderately concentrated markets, although overall charges were 8.3% lower (95% CI, -14.0% to -2.3%; P = .008) in highly concentrated markets. For hepatic resections, hospitals in highly concentrated markets had 8.4% lower costs (95% CI, -13.0% to -3.6%; P = .001) compared with those in unconcentrated markets and charges that were 13.4% lower (95% CI, -19.3% to -7.1%; P < .001) compared with moderately concentrated markets and 10.5% lower (95% CI, -16.2% to -4.4%; P = .001) compared with unconcentrated markets.

CONCLUSIONS AND RELEVANCE

Higher market concentration was associated with lower overall charges and lower costs of pancreatic and hepatic surgery. For complex, highly specialized procedures, hospital market consolidation may represent the best value proposition: better quality of care with lower costs.

Are the Affordable Care Act Restrictions Warranted? A Contemporary Statewide Analysis of Physician-Owned Hospitals

BACKGROUND

The Affordable Care Act placed a moratorium on physician-owned hospital (POH) expansion. Concern exists that POHs increase costs and target healthier patients. However, limited historical data support these claims and are not weighed against contemporary measures of quality and patient satisfaction. The purpose of this study was to investigate the quality, costs, and efficiency across hospital types.

METHODS

One hundred forty-five hospitals in a single state were analyzed: 8 POHs; 16 proprietary hospitals (PHs); and 121 general, full-service acute care hospitals (ACHs). Multiyear data from the Centers for Medicare and Medicaid Services Medicare Cost Report and the statewide Health Care Cost Containment Council were analyzed.

RESULTS

ACHs had a higher percentage of Medicare patients as a share of net patient revenue, with similar Medicare volume. POHs garnered significantly higher patient satisfaction: mean Hospital Consumer Assessment of Healthcare Providers and Systems summary rating was 4.86 (vs PHs: 2.88, ACHs: 3.10; P = .002). POHs had higher average total episode spending ($22,799 vs PHs: $18,284, ACHs: $18,856), with only $1435 of total spending on post-acute care (vs PHs: $3867, ACHs: $3378). Medicare spending per beneficiary and Medicare spending per beneficiary performance rates were similar across all hospital types, as were complication and readmission rates related to hip or knee surgery.

CONCLUSION

POHs had better patient satisfaction, with higher total costs compared to PHs and ACHs. A focus on efficiency, patient satisfaction, and ratio of inpatient-to-post-acute care spending should be weighted carefully in policy decisions that might impact access to quality health care.

Ambulatory Surgery Centers and Prices in Hospital Outpatient Departments

Specialty providers claim to offer a new competitive benchmark for efficient delivery of health care. This article explores this view by examining evidence for price competition between ambulatory surgery centers (ASCs) and hospital outpatient departments (HOPDs). I studied the impact of ASC market presence on actual prices paid to HOPDs during 2007-2010 for four common surgical procedures that were performed in both provider types. For the procedures examined, HOPDs received payments from commercial insurers in the range of 3.25% to 5.15% lower for each additional ASC per 100,000 persons in a market. HOPDs may have less negotiating leverage with commercial insurers on price in markets with high ASC market penetration, resulting in relatively lower prices.

Treatment outcomes and lessons learned from 5134 cases of outpatient office-based endovascular procedures in a vascular surgical practice

Introduction The office-based endovascular facility has increased in number recently due in part to expedient patient experience. This study analyzed treatment outcomes of procedures performed in our office-based endovascular suite. Methods Treatment outcomes of 5134 consecutive procedures performed in our office-based endovascular suites from 2006 to 2013 were analyzed. Five sequential groups (group I-V) of 1000 consecutive interventions were compared with regard to technical success and treatment outcomes. Results Our patients included 2856 (56%) females and 2267 (44%) males. Procedures performed included diagnostic arteriogram, arterial interventions, venous interventions, dialysis access interventions, and venous catheter management, which were 1024 (19.9%), 1568 (30.6%), and 3073 (60.0%), 621(12.1%), and 354 (6.9%), respectively. The complication rates for group I, II, III, IV, and V were 3%, 1.5%, 1%, 1.1%, and 0.7%, respectively. The complication rate was higher in group I when compared to each of the remaining four groups ( p < 0.05). Nine patients (0.18%) died within the 30-day period following their procedures, and none were procedure related. Conclusions Endovascular procedure can be performed safely in an office-based facility with excellent outcomes. Lessons learned in establishing office-based endovascular suites with efforts to reduce procedural complications and optimize quality patient care are discussed.

[Outpatient thoracic surgery: Evolution of the indications, current applications and limits]

The objectives of outpatient surgery are to reduce the risks connected to hospitalization, to improve postoperative recovery and to decrease the health costs. Few studies have been performed in the field of thoracic surgery and there remains great scope for progress in outpatient lung surgery. The purpose of this article is to present a revue of the current situation and the prospects for the development of out patient thoracic surgery.

Why healthcare providers merge

In many OECD countries, healthcare sectors have become increasingly concentrated as a result of mergers. However, detailed empirical insight into why healthcare providers merge is lacking. Also, we know little about the influence of national healthcare policies on mergers. We fill this gap in the literature by conducting a survey study on mergers among 848 Dutch healthcare executives, of which 35% responded (resulting in a study sample of 239 executives). A total of 65% of the respondents was involved in at least one merger between 2005 and 2012. During this period, Dutch healthcare providers faced a number of policy changes, including increasing competition, more pressure from purchasers, growing financial risks, de-institutionalisation of long-term care and decentralisation of healthcare services to municipalities. Our empirical study shows that healthcare providers predominantly merge to improve the provision of healthcare services and to strengthen their market position. Also efficiency and financial reasons are important drivers of merger activity in healthcare. We find that motives for merger are related to changes in health policies, in particular to the increasing pressure from competitors, insurers and municipalities.

Effects of physician-owned specialized facilities in health care: a systematic review

BACKGROUND

Multiple studies have investigated physician-owned specialized facilities (specialized hospitals and ambulatory surgery centres). However, the evidence is fragmented and the literature lacks cohesion.

OBJECTIVES

To provide a comprehensive overview of the effects of physician-owned specialized facilities by synthesizing the findings of published empirical studies.

METHODS

Two reviewers independently researched relevant studies using a standardized search strategy. The Institute of Medicine's quality framework (safe, effective, equitable, efficient, patient-centred, and accessible care) was applied in order to evaluate the performance of such facilities. In addition, the impact on the performance of full-service general hospitals was assessed.

RESULTS

Forty-six studies were included in the systematic review. Overall, the quality of the included studies was satisfactory. Our results show that little evidence exists to confirm the advantages attributed to physician-owned specialized facilities, and their impact on full-service general hospitals remains limited.

CONCLUSION

Although data is available on a wide variety of effects, the evidence base is surprisingly thin. There is no compelling evidence available demonstrating the added value of physician-owned specialized facilities in terms of quality or cost of the delivered care. More research is necessary on the relative merits of physician-owned specialized facilities. In addition, their corresponding impact on full-service general hospitals remains unclear. The development of physician-owned specialized facilities should thus be monitored carefully.

Hospital-based, acute care after ambulatory surgery center discharge

BACKGROUND

As a measure of quality, ambulatory surgery centers have begun reporting rates of hospital transfer at discharge. This process, however, may underestimate the acute care needs of patients after care. We conducted this study to determine rates and evaluate variation in hospital transfer and hospital-based, acute care within 7 days among patients discharged from ambulatory surgery centers.

METHODS

Using data from the Healthcare Cost and Utilization Project, we identified adult patients who underwent a medical or operative procedure between July 2008 and September 2009 at ambulatory surgery centers in California, Florida, and Nebraska. The primary outcomes were hospital transfer at the time of discharge and hospital-based, acute care (emergency department visits or hospital admissions) within 7-days expressed as the rate per 1,000 discharges. At the ambulatory surgery center level, rates were adjusted for age, sex, and procedure-mix.

RESULTS

We studied 3,821,670 patients treated at 1,295 ambulatory surgery centers. At discharge, the hospital transfer rate was 1.1 per 1,000 discharges (95% confidence interval 1.1-1.1). Among patients discharged home, the hospital-based, acute care rate was 31.8 per 1,000 discharges (95% confidence interval 31.6-32.0). Across ambulatory surgery centers, there was little variation in adjusted hospital transfer rates (median = 1.0/1,000 discharges [25th-75th percentile = 1.0-2.0]), whereas substantial variation existed in adjusted, hospital-based, acute care rates (28.0/1,000 [21.0-39.0]).

CONCLUSION

Among adult patients undergoing ambulatory care at surgery centers, hospital transfer at time of discharge from the ambulatory care center is a rare event. In contrast, the rate of need for hospital-based, acute care in the first week afterwards is nearly 30-fold greater, varies across centers, and may be a more meaningful measure for discriminating quality.

Patterns of care in testicular torsion: influence of hospital transfer on testicular outcomes

OBJECTIVE

To investigate patterns of care for testicular torsion and influence of hospital transfers on testicular outcomes. Hospital transfer may be a source of treatment delay in a condition where delays increase likelihood of orchiectomy.

METHODS

We used a retrospective cohort of Californian males with ICD-9/CPT-defined torsion from inpatient, emergency department (ED), and ambulatory surgery center (ASC) data. Logistic regression assessed predictors of orchiectomy.

RESULTS

Predictors of orchiectomy were ages <1 year (OR 19.2, 95% CI 6.3-58.9), 1-9 years (OR 2.7, 95% CI 1.4-5.2), and ≥40 years (OR 6.6, 95% CI 3.1-13.9) (vs. masked age). Treatment at mid-volume (vs. high-volume) facilities was associated with lower odds of orchiectomy (OR 0.5, 95% CI 0.3-0.7). Rural location, non-private insurance, and hospital transfer were associated with orchiectomy on univariate but not multivariate analysis. During 2008-2010, 2794 subjects experienced torsion (average incidence 5.08 per 100,000 males yearly). Encounters occurred in ASCs (55%), inpatient facilities (36%), and EDs (9%). 60% of subjects were privately insured, 2% experienced hospital transfer, and 31% underwent orchiectomy.

CONCLUSION

Our census found that most cases of testicular torsion were treated in outpatient settings. Hospital transfer was not associated with orchiectomy.

The effects of nurse staffing on hospital financial performance: competitive versus less competitive markets

BACKGROUND

Hospitals facing financial uncertainty have sought to reduce nurse staffing as a way to increase profitability. However, nurse staffing has been found to be important in terms of quality of patient care and nursing-related outcomes. Nurse staffing can provide a competitive advantage to hospitals and as a result of better financial performance, particularly in more competitive markets.

PURPOSE

In this study, we build on the Resource-Based View of the Firm to determine the effect of nurse staffing on total profit margin in more competitive and less competitive hospital markets in Florida.

METHODOLOGY/APPROACH

By combining a Florida statewide nursing survey with the American Hospital Association Annual Survey and the Area Resource File, three separate multivariate linear regression models were conducted to determine the effect of nurse staffing on financial performance while accounting for market competitiveness. The analysis was limited to acute care hospitals.

FINDINGS

Nurse staffing levels had a positive association with financial performance (β = 3.3, p = .02) in competitive hospital markets, but no significant association was found in less competitive hospital markets.

PRACTICE IMPLICATIONS

Hospitals in more competitive hospital markets should reconsider reducing nursing staff, as these cost-cutting measures may be inefficient and negatively affect financial performance.

The great recession of 2007 and California nurses: a descriptive analysis

This study investigates the effect of the Recession of 2007 on nurses' wages, demographics, human capital, and work environment characteristics using data from the California Board of Registered Nursing Surveys of 2006, 2008 and 2010. Findings suggest that the labor force is maximized, with nurses working as much as they can on their primary nursing positions (51 weeks a year). As the economy recovers, the nurse shortage will resurge. Intense focus in three policy areas is recommended: education, faculty training, and recruitment and retention of African Americans, Hispanics, and older nurses.