By Anne Kirby, Chief Compliance Officer & VP of Medical Review Services, Rising Medical Solutions
Purchasing medical care isn’t like any other buying decision. With our most expensive purchases, we shop various merchants, compare quality and price, look at guarantees, and determine reliability. When it comes to healthcare decisions, such a comprehensive assessment can be difficult, but it shouldn’t be. In the workers’ compensation arena, surgeries make-up approximately 60 to 70 percent of all outpatient costs according to a 2012 WCRI study. That’s why it’s vital to expand the existing arsenal and provide payers with additional choices in their healthcare decision making process.
A Third Dimension in Your Medical Decision Tree
When a workers’ comp payer is making decisions about a surgery, of course the first healthcare decision is if the procedure is a medical necessity and related to a compensable injury. The next, and equally important decision, is the selection of a qualified physician who is willing to accept the case and provide services on a timely basis. Finally, to be a truly astute payer, I’d argue there’s a third dimension to the decision process: where will the surgery occur?
Today various surgical procedures can be safely performed in a Freestanding Surgical Outpatient Facility (FSOS), or an Ambulatory Surgical Center (ASC). Payers should weigh the pros and cons of this additional choice and consider all options.
Reducing Your Medical Spend & Adding Predictability
Looking nationwide, Medicare data indicates that ASCs are 41 percent less expensive than hospital outpatient rates and between 45 percent to 61 percent lower for the top five procedures. The reason for such a substantial cost difference? Hospitals have a much higher mix of Medicare, Medicaid and self-pay patients. Additionally, they have a much higher cost structure because hospitals must offer capital-intensive services such as inpatient care and emergency departments. But not only do ASCs provide the opportunity for lower cost surgical procedures, they also present more predictable costs, as payers can potentially take advantage of bundled case rates. Take for instance a knee arthroscopy, even in an aggressive fee schedule state like California, a hospital inpatient surgery cost would be roughly $15,000; the hospital outpatient cost would be approximately $4,600; and the ASC cost comes in at around $3,400.
Creating Greater Worker Satisfaction & Better Outcomes
There’s something to be said about the injured worker’s experience. Beyond simply looking at the hard financial costs, studies show that freestanding facilities tend to foster a more positive patient setting – reflecting a 90+ percent patient satisfaction rating. In freestanding facilities, scheduling tends to be much more predictable, easier to navigate, and less intimidating.
Evidence also indicates that post-surgical infection rates at freestanding environments are lower. In a hospital setting, one out of every 20 hospital patients (or 5%) will contract an infection while receiving treatment for another condition, according to the Center for Disease Control. Sick people and open surgical incisions are a bad combination. To contrast, in an ASC environment, 1.3 out of every 1000 patients (or 0.13%) contracts a post-surgical wound infection.
An additional factor to consider is that freestanding ASCs focus on a much more narrow range of services, which may contribute to better outcomes.
Still Evolving to Expand Care & Minimize Shortcomings
That’s the upside on ASCs, now for the downside. First, it’s more difficult to benchmark the quality of freestanding ASCs against the results achieved in hospital outpatient settings. Yet strides are being made in this area with the Medicare certification process and the Accreditation Association for Ambulatory Health Care (AAAHC) accreditation process being applied to a high percentage of the more than 5,000 freestanding facilities nationwide.
Second, not all work-injured patients can safely receive surgical services in a freestanding environment due to co-morbidities. Similarly, not all procedures can be safely performed in freestanding centers. In many parts of the country freestanding facilities are simply not available.
Last, ASCs have been put under scrutiny for a number of issues, including: inflated billing in non-fee schedule states or those where fee schedule “loopholes” exist, and potential conflicts of interest with physician-owned ASCs that may influence treatment decisions. However, the variation in ASC cost and quality can be mitigated by tactics such as credentialing and establishment of predetermined reimbursement rates.
But one thing is clear, cost savings, no matter how good they may be, should never outweigh poor outcomes. In years to come, the shortcomings of ASCs may lessen or be resolved. In the meantime there are opportunities where both cost savings and quality outcomes can be achieved at freestanding facilities. Under the right, discerning set of circumstances, ASCs can present a very straightforward choice and the shrewd payer considers the advantages ASCs can afford today.
About Anne Kirby
With 30-plus years of industry expertise, Anne Kirby heads Rising Medical Solutions’ Compliance and Medical Review units – overseeing quality management and legal compliance initiatives, as well as the delivery of Utilization Management and Care Management services. Under Kirby’s leadership, Rising has received its URAC accreditation, obtained numerous state certifications, passed mandatory state audits of Rising’s services and developed innovative technologies to enhance service delivery.
Prior to Rising, Kirby co-founded BlueMat Solutions, a consulting firm servicing the healthcare and workers’ comp markets. She has been instrumental in developing multiple case management platforms and technology tools for case managers and utilization review nurses. Earlier in her career, Kirby worked for 22 years with Concentra Managed Care in a variety of roles, including: Regional Vice President, Vice President of Product Development and Vice President of Marketing and Sales.
Throughout her career, Kirby has advised employers, insurers, managed care companies and regulatory bodies in various states on topics related to managed care. She has developed a national database of rules for utilization review and case management service delivery. At numerous industry events throughout the country, she has served as an expert speaker and has participated on several boards, including: Workers’ Compensation Research Institute (WCRI) Core Funders, Risk and Insurance Customer Advisory, and the Walpole Area Visiting Nurse Association.
Kirby holds a Bachelor of Science in Nursing from St. Louis University and a Bachelor of Arts from Boston College.
About Rising Medical Solutions
Rising Medical Solutions (Rising) is a national medical-financial solutions organization that provides medical cost containment, care management and financial management services to the workers’ compensation, auto, liability and group health markets.
Based in Chicago, Illinois, Rising started as a two-person team and is now one of the fastest growing private enterprises in America, as ranked by Inc. magazine and the Private Company Index (PCI). To learn more, visit: www.risingms.com.