The Effects of Free-Standing Ambulatory Surgery Centers on Hospital Surgery Volume
- Presenter:
Chair: Dean Lillard; Discussant: James Marton Wed June 7, 2006 8:00-9:30 Room 121
Rationale: Hospitals traditionally compete among themselves for health services such as surgical procedures. The growing number of free-standing ambulatory surgery centers (ASCs) poses a potential threat to hospital surgery services. However, there has been little empirical evidence on the effect of ASCs on hospital surgery volume.
Objective: This study examined the effect of the growth in ASCs on community hospital outpatient and inpatient surgery volume.
Methods: Using secondary data of the 1992-2001 American Hospital Association Annual Survey files, the 2002 Medicare Online Survey Certification and Reporting System, an HMO penetration file, and the Area Resource Files, we constructed a balanced Metropolitan Statistical Area (MSA) panel dataset including 317 MSAs from 1992-2001. The unit of analysis was a MSA-year. Ordinary least squares regressions with MSA and year fixed effects were used to control for MSA-level heterogeneity and time trends. Three dependent variables were the log-transformed hospital outpatient, inpatient, and total (inpatient and outpatient combined) surgery volumes. The key explanatory variable was the number of ASCs per 100,000 people. Other covariates included health maintenance organization (HMO) penetration, hospital concentration measured by the Herfindahl-Hirschman Index, supplies of surgeons and physicians, and demographic and economic characteristics. The standard errors were adjusted via Huber standard errors correction.
Results: The panel data included a total of 3170 MSA-years. From 1992-2001, average outpatient surgery volume at the MSA-level increased by 23% from 58,783 to 72,111, average inpatient surgery volume decreased by 12% from 50,778 to 44,911, and average total surgery volume only increased by 7% from 109,561 to 117,022. During the same period, the number of ASCs increased by 143% from .66 to 1.69 per 100,000 people, HMO penetration nearly doubled, and hospital markets became more concentrated. In regression analysis, the number of ASCs per 100,000 people was inversely associated with outpatient and total surgery volumes (p<.01) but was not associated with inpatient surgery volume (p>.10). Other thing equal, an increase in 1 ASC per 100,000 people is associated with a decrease of 4.1% in outpatient surgery volume and a decrease of 1.8% in total surgery volume. In addition, our study showed that increased hospital concentration raised hospital outpatient and total surgery volumes. But we found no associations of HMO penetration and hospital surgery volume.
Conclusions: This was the first study using nationally representative MSA-level panel data from 1992-2001 to show that ASCs may lead to a decline in hospital total surgery volume, largely driven by decreased hospital outpatient surgery volume. Additional research needs to focus on the impact of ASCs on hospital provision of charitable care and quality of care.
