Future Prospects for the Ambulatory Surgery Center Industry

by Teresa Eckton

There are at present nearly six thousand ambulatory surgery centers (ASCs) in the United States. They are a vibrant and necessary link in the healthcare delivery chain. More than 22 million surgeries are performed in ASCs every year. Procedures range from orthopedic operations and pain management treatments to GI and ophthalmology. The typical ASC business models are joint venture relationships between surgeons and ASC management companies; however, they increasingly include hospital partners as well.

There are industry dynamics which have been leading people involved with ASCs to believe that the need for operating room capacity may grow dramatically in the coming decade. Demographics, coupled with financial considerations, should drive this growth.

Recent statistics indicate that by the beginning of next year, 10,000 people per month will turn 65 years of age. When you consider that older patients utilize healthcare services at a considerably higher rate than younger patients do (approximately six times as many medical visits per year), you can see that the demand for services will strain our existing medical/surgical infrastructure. Additionally, baby boomers are staying more active and engaging in athletic activities at ever-increasing rates. As many of us know, this does unfortunately lead to a higher number of "weekend warrior" injuries. These injuries can include anything from back pain to sundry knee, hip and shoulder problems. Older Americans are increasingly demanding surgical and pain management procedures that will allow them to continue their athletic pursuits.

Runners, golfers and tennis players want to continue these activities well into their senior years. This is not your father's retirement anymore! To illustrate this trend further, consider that orthopedic procedures currently account for approximately 30% of all outpatient surgeries, but that this number is going to rise substantially in the next decade for the reasons mentioned above. ASCs will need to be there to provide the services.

Technological advances will also have a major effect on the volume of outpatient surgeries. As an example, outpatient spine surgeries are rapidly expanding due to new surgical devices and enhanced techniques that minimize blood loss and better control of post-operative pain. Procedures that were once considered the exclusive province of an in-patient hospital are now being performed routinely in an ambulatory surgical setting.

Another interesting development in the baby boom demographic segment is the growth in cosmetic procedures. Besides wanting to maintain their youth and health by exercising regularly, people want to undo some of the more obvious signs of aging and project an appearance that matches their active lifestyles. Plastic surgeons who once performed many of these services in either a hospital or an office-based operating room are now opting for ASCs.

There are many factors driving this trend. First, it is much safer for a patient to have this type of surgery in an ASC instead of in an office. An ASC is equipped to provide general anesthesia administered by a board-certified anesthesiologist and is better equipped to handle emergencies than a smaller, office-based OR is. Further, due to advances in surgical technique and anesthesia, most longer cosmetic procedures can now be safely performed in an ASC instead of in a hospital OR. In addition, enhanced affordability is increasing the number of cosmetic procedures being performed. This increased demand (which has recovered from the dip seen during the recent recession) will put further strain on the existing hospital infrastructure, driving some procedures to ASCs.

Yet another factor driving ASC growth is the number of people who will need to have routine screening endoscopies and colonoscopies. This is another by-product of our aging population. In fact, this growth is tracking very closely to the aging baby boomer population segment. While some of these procedures are still being done in an office-based setting or a hospital outpatient unit, many GI physicians have opted for owning ASCs instead. For a busy practice, far more procedures can be done in an ASC during any given time period compared to either a hospital or office-based setting. Well-run ASCs offer efficiencies and space that the other options just don't provide.

From a financial perspective, ASCs have proven to be very beneficial for the healthcare system. Since the same procedures performed in ASCs traditionally cost less than those performed at in-patient hospitals, the overall system benefits. Further, ASCs have nearly negligible infection rates as compared to hospitals, which also bring down costs. From a provider perspective, an ASC is one of the few medical businesses that a surgeon can own. This is an additional financial benefit to the surgeon-

Lastly, the following basic advantages that ASCs have always provided are still true today, and will be in the future:

- ASCs provide a clean and safe environment for patients - "we take care of mechanical problems, not sick people"
- ASCs are efficient for both patients and surgeons - cases run on time and patients are treated as valued customers
- Well-run ASCs are both profitable and efficient - at a lower cost to the overall healthcare system