ASC Market Growing Rapidly
Not very long ago, ASCs were concerned about the outmigration of patients to hospitals or hospital outpatient departments. CMS payment schedules routinely favored hospitals, giving weight to the concern. Times have truly changed for ASCs! In 2005, there was a 60-40 split in terms of patient use in favor of hospital outpatient departments, but by next year, ASCs and hospitals will trade places. ASC volumes have been increasing over 20 percent annually the past couple of years. With CMS rule changes and near-term demographics, this growth should sustain. Physician-owned and single-specialty centers continue to do very well, primarily due to their cost-effectiveness.
Growing Role of ASCs in Healthcare
Volume is not the only thing that matters, as important as it is. Due in large part to their relative small size, the value that ASCs bring to the healthcare ecosystem has been undersold. This too is changing! ASCs save $38 billion per year in commercial claims alone and boast high patient and staff satisfaction rates. The smaller size of ASCs is also proving to be an advantage for making strides in technological adaptation. People beyond the industry are starting to take notice. In the last couple of weeks on her August recess from Washington, DC, U.S. Senator Marsha Blackburn (R-TN) made the trek to visit a Cleveland, TN surgery center to get a better idea of the value that ASC is bringing to the southeast region of her state.
Healthcare Industry Trends
Forecast: Cost Transparency with Patches of Fog
Healthcare cost transparency seems like a new subject, but aspects of the subject have been bantered around in scholarly literature for over a decade. Now the national focus on price transparency is clearly on the high side, due to the largely unproven hope that transparency will reduce healthcare cost. Earlier this year, CMS released a requirement that hospitals post their service charges on their websites. Even so, there are problems with price transparency, the most obvious being the lack of transparency that providers, and sometimes patients, experience with what third-party payers will ultimately pay. Harvard Business Review considers another problem with cost transparency in the medical marketplace. What happens when less expensive hospitals see the prices of their pricier competitors?
Out-of-Pocket Healthcare Spending Rises
13.3 million Americans spent more than ten percent of their incomes on healthcare premiums in 2017. 6.2 million spent beyond ten percent of their incomes on out-of-pocket costs beyond their premiums. Patient education on how healthcare insurance works has been and is a real problem. This lack of understanding is adding to the financial misery for many who increasingly pay higher deductibles and then try to avoid using the benefits they are paying for each month. A recent study demonstrated that the average American deeply underestimates the out-of-pocket costs of healthcare services.
Healthcare Digital Transformation Watch
The Status of Inoperability
Data sharing via HIPAA-approved mechanisms is a big issue in healthcare. The first electronic medical record (EMR) system was created in 1972. PPACA passage in 2010 mandated the move to EMR systems and the US Supreme Court supported the constitutionality of the ruling in the middle of 2012. Since then, significant strides have been made, particularly in intra-system interoperability. However, one-third of health systems still deal with interoperability issues, which are particularly acute when sharing data across systems. In 2018, Amazon, Google, IBM, Microsoft, and Salesforce pledged to develop an Application Program Interface (API)-first strategy for healthcare interoperability. The building blocks for wide interoperability are set, but plenty of work remains, in large part because EMR/EHR vendors, healthcare systems, and policy makers are not yet in sync.
CMS to Modify Stark Law
by Sean Laffey, Contego Legal Analyst, from the office Jon Sistare, JD, Contego Attorney
The Stark Law (not to be confused with the Anti-Kickback Statute) is a law enacted in 1989 that prevents physicians from offering certain referrals of Medicare patients to other providers in which the original physician has a financial interest. Unlike the Anti-Kickback Statute, providers that violate this law may be held accountable civilly as opposed to criminally and can also be banned from participating in federally funded programs such as Medicare.
However, the healthcare environment is surely much different than it was in 1989, creating a need for CMS to modernize the law. The Stark Law was enacted to control a “fee-for-service” model; however, governmental leaders are seeking to shift healthcare to a value-based care model. Many physicians today, though, are hesitant to participate in value-based arrangements due to fear of violating the Stark Law.
CMS director Seema Verma explained that the proposed changes to the law “include clarifying the regulatory definitions of volume or value, commercial reasonableness and fair market value; addressing issues such as lack of signature, incorrect dates or other areas of technical noncompliance; and updating the regulation to address a world in which there are cybersecurity and electronic health records requirements.”
The proposed changes may be highly beneficial to providers by facilitating increased innovation and hopefully better care coordination. If anything, the need for an update to the Stark Law is an example of how quickly the healthcare industry can change, as well as the need to update and modernize laws passed decades ago so they can remain relevant.
At a Glance
Podiatric Medical School Applications Are Up
Some Young Adults Not Letting Go of Their Pediatricians
Patients Love the ASC Experience
A Clear Case of Unintended Consequences
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