UnitedHealth Group Senior Vice President Protima Advani breaks down new research that reveals patients can save money by using ambulatory surgery centers instead of hospital outpatient departments.
Sometimes health care is all about location, location, location: Patients can save money by using ambulatory surgery centers instead of hospital outpatient departments, according to new UnitedHealth Group research. It's the latest in a series of research findings that show ambulatory surgery centers can provide high quality care at a lower cost. Protima Advani, Senior Vice President with UnitedHealth Group, explain why.
SPEAKERS
Ira Apfel, Protima Advani
Ira Apfel00:05
Hello, and welcome to UnitedHealth Group’s Weekly Dose Podcast, where we'll get you up to speed on the latest trends, shaping the future of healthcare. Don't forget, the podcast is now available on Apple podcast and Spotify. So be sure to subscribe so you never miss an episode. Now on to the show, reducing patient costs is a constant challenge. And one way to do that is to ensure patients receive high quality care in the appropriate setting. Now, according to new research by UnitedHealth Group, patients can save more than $680 on average, per routine procedure by using ambulatory surgery centers instead of hospital outpatient departments. It's the latest in a series of research findings that show ambulatory surgery centers can provide high quality care at a lower cost. In fact, the average price of procedures performed in hospital outpatient departments in 2019 was actually 144% more than those performed in ambulatory surgery centers. So here to explain why this is so and what the findings mean of that all this new UnitedHealth Group research is Protima Advani. She’s senior vice president with UnitedHealth Group, Protima, welcome to the podcast.
Protima Advani01:19
Thank you.
Ira Apfel01:21
So let's start off from the beginning what is a traditional site of care location, and what are the new sites.
Protima Advani01:28
Traditionally, other than physician practices, patients have turned to hospitals for their health care needs. Today However, thanks to medical innovation, a large proportion of health care can be delivered outside the hospital at much lower cost and with the same or better quality. There are many alternatives to hospitals for routine care procedures. For example, patients can get diagnostic tests done at locations that are independent from hospitals, such as labs, imaging centers, or even their physician offices. Similarly, many common surgeries and procedures that do not require an overnight hospital stay can be performed at ambulatory surgery centers with the same or better quality than in the hospital outpatient department.
Ira Apfel02:15
What's the rationale for shifting the site of care?
Protima Advani02:20
shifting side of care can help patients really access high quality care in lower cost settings, and thereby really generate savings for consumers, employers and government programs.
Ira Apfel02:33
And why are the sites less expensive these new sites,
Protima Advani02:38
there are so many reasons underlying the higher prices at hospitals. First and foremost, there's a legacy of high prices in hospital settings driven by their overhead costs. So basically, every time a service is delivered in a hospital, the price of that service, whether it's a test, or an outpatient surgery, it includes a portion of the hospital's overhead costs, making that sort of as much costlier at the hospital than the cost of the same service at a freestanding lab or imaging center or ambulatory surgery center. Another reason hospitals have higher prices, is they typically command market power in the markets. And so, in reality, the freestanding facilities and ambulatory surgery centers are able to provide the same service at a lower price and in essence create competition for the hospital in the markets where they operate. Unfortunately, as the competition from these freestanding facilities is increasing, hospitals are responding by increasing their prices even further to make up for the lost revenue and declining market share.
Ira Apfel03:48
So pretty much what was the rationale for conducting this research
Protima Advani03:52
As you know UHG is committed to optimizing sites of care to drive greater affordability for consumers and the health system. And so in support of this enterprise priority, we conducted research to identify and quantify the savings opportunities from improving the use of high-quality Low, low-cost settings of care.
Ira Apfel04:12
So walk us through the research then what data did you use and what are the big takeaways?
Protima Advani04:20
So in the research, we found that the average price of a common outpatient procedure when performed at a hospital outpatient department, is nearly one and a half times more than the price of the same procedure performed in an ambulatory surgery center. There are more than 6 million of these outpatient procedures performed annually in hospitals, and more than half of them 56% to be exact of these procedures are for relatively healthy patients with access to a lower cost as close to their home. And so shifting these noncomplex patients to lower cost ACS would reduce spending on outpatient procedures by nearly six 60% and save consumers more than $680 per procedure on average.
Ira Apfel05:07
curious what was the data that you used? And what were you working from?
Protima Advani05:13
We analyzed the claims of United Healthcare members, those with employer coverage who had an outpatient procedure in 2019. So basically the last full year before the pandemic, we looked at patients who met two criteria. First, they were relatively healthy, and did not meet the medical requirements for the procedure to be performed in a hospital outpatient department. Second, they have convenient access to an ASE within a reasonable distance from their home. And then we determine savings. by calculating the average cost difference between performing the procedure at a hospital outpatient department and an ASC. We then estimated the consumer share of the cost for the procedure to determine the consumer savings.
Ira Apfel06:01
And of course, as UnitedHealth Group is one of the largest private insurers in the country, this is actually a pretty large sample size. It's not cherry picking 10 people and the ASC down the block, I guess you could say,
Protima Advani06:16
absolutely. It was our entire commercial population for 2019 that had an outpatient procedure.
Ira Apfel06:23
So are there times when it's best not to perform the service in a non-hospital setting?
Protima Advani06:30
Yeah, in our analysis, we determined that some patients are clinically complex. And what I mean by that are patients that are morbidly obese, may have a bleeding disorder, may have other clinical risk factors like diabetes, or COPD, or require surgery lasting more than three hours. For these kinds of patients. we deem them ineligible for a shift to an ambulatory surgery center when we did our research.
Ira Apfel06:56
So it's definitely not something where you say, okay, everything's better at ASC C's, you got to go to ASC. There's actually some, there's some real nuance, to the research in your findings.
Protima Advani07:08
We're not saying everything is not better at ACS. All we're saying is we understand that there are people that have other complexities because of which it might make sense for them to stick in a hospital setting, should they have additional needs that go beyond what ASC is offer.
Ira Apfel07:25
So how does this tie into other research that's been conducted both by UnitedHealth Group and other organizations about the cost benefits of ambulatory surgery centers.
Protima Advani07:34
So in an analysis we did on savings from shifting routine joint replacement procedures, from hospitals to ACS, there also we found significant cost differences. Specifically, we found costs are about 17 to 20% lower when the routine joint replacements are performed in ACS instead of hospital inpatient settings for privately insured individuals. If half of these routine joint replacements performed in hospitals were moved to an ASC. Half a million surgery patients each year would avoid an overnight hospital stay, and the health system would save $3 billion annually.
Ira Apfel08:14
So one of the side of service opportunities beyond ambulatory surgery centers.
Protima Advani08:19
Actually beyond ambulatory surgery centers, there are numerous opportunities to optimize sites of care and generate savings for consumers in the health system. For example, shifting diagnostic imaging tests like MRIs and CTS for relatively healthy patients to lower cost imaging centers of physician offices, would reduce spending on diagnostic imaging by 62% and save consumers more than $300 per test on average. Similarly, two thirds of hospital ED visits have a common conditions like bronchitis sore throat, the common cold conditions that can safely and effectively be treated in high quality, low-cost primary care settings. So if we shift these avoidable, Edy visits, which amount about 18 million annually to primary care settings, it would save the health system $32 billion per year.
Ira Apfel09:15
So what are the challenges behind getting patients and physicians to move the site of care because I imagine for some of them, just the hospital setting, it just feels traditional and normal to them. And this might all be different.
Protima Advani09:28
I think the decision to send patients to expensive sites of care is driven by a lack of understanding. From a patient's perspective, they've trusted physicians and follow their recommendations on where to go for tests or procedures. Unfortunately, most physicians don't know about the wide variation in the price of a service across different settings. And they definitely don't appreciate how much patient out of pocket costs can vary. Based on the site, they select. So they are more likely to refer patients to the hospitals as you said, the traditional sites they have always referred to out of convenience or just habit. Beyond that, with so many physicians being employed by hospitals, their incentive is to refer to the hospital system they work for.
Ira Apfel10:19
Well, thanks so much for being on the podcast today.
Protima Advani10:22
Thank you.
Ira Apfel10:23
That's it for this episode of UnitedHealth Group's Weekly Dose Podcast. And don't forget, please subscribe to the Weekly Dose Podcast on Apple podcast and Spotify. Thanks for listening and have a great rest of your week.