A day in the ASC was not only shorter and more profitable, but there was no overnight call to worry about. Inevitably, more cases were migrated to outpatient venues such that, today, most anesthesia cases are performed in such venues. As a result, anesthesia practices face a new and increasingly complex set of challenges in managing the diversity of venues they must cover.
Historical Distinctions
Historically, ambulatory facilities were distinguished in several ways. The cases were shorter. The patients were healthier and tended to be covered by good commercial (non-governmental) insurance, which made the work more productive from a financial perspective.
In most cases, the net yield per unit billed was considerably higher in the outpatient setting than the yield for inpatient cases. The days were shorter, although sometimes case volume was unpredictable. There was no after hours or weekend coverage required, and it was very rare that the facility had to pay a subsidy to the anesthesia practice. Getting contracts at ambulatory facilities enhanced the overall value of the practice.
A Change in the Wind
So, what has changed with the migration of so many cases to ambulatory facilities? One key factor has been the growth of endoscopic activity. While these are short cases for relatively healthy patients, a growing percentage are covered by Medicare, which impacts the payer mix. A number of intense orthopedic procedures, such as total joints, are now being done on an ambulatory basis, as well.
As the percentage of all cases done on an ambulatory basis grows, the ambulatory payer mix starts to match that of the hospital, as does the net yield per unit.
The more locations an anesthesia practice must cover, the more bodies it must have to meet the demand. The basic rule of staffing is that, for every 7:30 am start, there must be a dedicated provider (or provider team, if it is a care team practice). Ideally, each anesthetizing location should generate enough revenue to cover the cost of providing the service. The more locations the practice must cover, the more of a challenge this can be. Many anesthesia practices have had to set up their own scheduling offices to manage these logistical requirements.
Despite these challenges, outpatient facilities can still deliver meaningful strategic value when evaluated appropriately. The key metric in determining that value is profitability by clinical location—not revenue alone.
Specifically, the most critical measure is:
Net Revenue per Clinical Day MINUS Provider Cost per Day
and Allocated Overhead per Day
For this metric to be favorable, the ASC must maintain consistent and efficient utilization for each anesthetizing location. Without optimized scheduling and throughput, even strong revenue performance may not translate into sustainable profitability.