In spite of financial challenges, the shift of total joint replacement (TJR) procedures from hospitals to ambulatory surgery centers (ASCs) continues to gain momentum as a trend.  While some see the migration of TJR surgeries to ASCs as a threat to hospital revenue, data continues to emerge showing that outpatient TJR patients receive equal or improved outcomes at lower cost, driving new demand.

According to a June 2016 article in Modern Healthcare, TJR procedures are one of the largest and most profitable service lines at many hospitals. The article predicts the financial threat of the shift of these surgeries will be even greater if the CMS (Centers for Medicare and Medicaid Services) changes its rules to allow Medicare and Medicaid payment for outpatient procedures, and also raises questions about its financial impact on Medicare’s new bundled-payment initiative for hospital-based procedures.

And yet, the Ambulatory Surgery Center Association says close to 40 centers around the country are performing outpatient joint replacements and that number is growing weekly. In addition, 23% of 354 hospitals analyzed by the Advisory Board Co. performed at least some outpatient knee replacements in 2014, while 7% performed at least some outpatient hip replacements. Experts say those numbers likely have increased in the past two years as well, as more surgeons gain confidence with new and improved clinical protocols.

“The smart, strategic hospital management teams understand they need to get ahead of this, so that when volume shifts out of their buildings they won’t lose patients,” Brian Tanquilut, a senior healthcare analyst at Jefferies & Co told Modern Healthcare. “That’s why the investor-owned hospital companies are making a big push on surgery centers.”

Based on extensive experience in structuring and managing hospital-physician joint-venture ASCs, Regent Surgical Health has been on the forefront of the trend. “Moving total joint replacement surgeries to the ASC makes sense for many reasons, both clinical and financial,” says Regent CEO Chris Bishop. “The most important decision factor is patient health / choice. Patients are increasingly bearing a higher % of the cost associated with these procedures and recognize the economic value of the ASC.  Additionally, patients are researching the advantages of high quality sites for outpatient service and requesting ASCs for their service. Properly structured hospital-physician joint ventures help hospitals defend market share (possibly increase commercial TJR market share), increase OR capacity, enhance physician loyalty, and improve quality of care – a winning strategy for sustainable growth.”  Additionally, if your hospital is not planning for eventuality, your competitor most likely is and could grow their TJR program via this outpatient TJR strategy.

For more information on the shift of TJR surgeries to ACSs, click here to download Regent’s white paper, “Total Joint Replacement & Two Additional Trends Transforming the Ambulatory Surgery Center Industry.”