Cost, Quality, and Growth in the Ambulatory Surgery Center Market
Technological changes in medicine have created new opportunities to provide surgical care in lower cost, specialized facilities. As one example of specialization in health care, the share of procedures performed in ambulatory surgery centers (ASCs)—freestanding facilities that exclusively provide outpatient procedures—has grown tremendously over the past 30 years. The papers in this session examine the rapid growth of the ASC market and the potential cost advantages and quality gains due to specialization in these facilities. The first paper in this session, “Physician and Patient Migration to Ambulatory Surgery Centers as a Response to Poor Safety at Hospitals ” by Nitin Dua and Gary Fournier, examines the impact of hospital quality measures on physician migration to ASCs. They find that physicians— in particular, high quality physicians and those who have an ownership stake in an ASC–respond to poor safety ratings in hospitals by increasing the share of work done at ASCs. In the second paper, “Do Single Specialty Ambulatory Surgery Centers Reap the Cost Advantages Presumed to Accompany Specialization,” Kathleen Carey and Jean Mitchell consider the potential cost advantages of single specialty ASCs over multispecialty ASCs and find evidence of greater economies of scale and scope in multispecialty ASCs. A third paper, by Elizabeth Munnich and Stephen Parente, estimates the effect of ASC treatment on patient outcomes using variation in Medicare physician payments and finds that patients treated in ASCs have better outcomes than those treated in hospitals, even after controlling for patient risk and physician fixed effects.