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A Comprehensive Look at ASC Data from 2024
6 Plays24 minutes ago
HST CEO David Thawley recently joined ASCA’s podcast to discuss key ASC trends in 2024—from rising specializations and OR efficiencies to new RCM data from our State of the Industry Report. We’re excited to share that conversation here with permission from ASCA.
Quick reminder: if you’re listening on Tuesday, April 29, the ASCA conference is officially underway! Come visit us at Booth #303 to say hi, grab your copy of the report, and win a prize.
Check out ASCA’s podcast, Advancing Surgical Care: https://www.ascassociation.org/asca/news-and-publications/podcast
Download HST’s State of the Industry Report: https://www.hstpathways.com/resources/surgery-center-industry-report/
Brought to you by HST Pathways.
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Transcript
Introduction to Podcast
00:00:01
Speaker
Welcome to This Week in Surgery Centers. If you're in the ASC industry, then you're in the right place. Every week, we'll start the episode off by sharing an interesting conversation we had with our featured guest.
00:00:12
Speaker
And then we'll close the episode by recapping the latest news impacting surgery centers. We're excited to share with you what we have. So let's get started and see what the industry's been up to.
00:00:27
Speaker
Hi everyone, here's what you can expect on today's episode.
ASC Trends in 2024
00:00:31
Speaker
David Thawley, HSC CEO, was a featured guest a few weeks ago on ASCA's podcast, Advancing Surgical Care.
00:00:38
Speaker
David sat down with Bill Prentice, ASCA's CEO, to cover some of the key trends in ASC care in 2024, including specializations on the rise, ah OR efficiencies, and revenue cycle management data that came from HSC's State of the Industry report.
00:00:54
Speaker
I was so impressed with how the conversation went between David and Bill that I asked Aska if it would be okay if we share the episode on our podcast platform as well. And thankfully they agreed.
00:01:05
Speaker
So after this recap is complete, this will transition right into David and Bill's conversation. Just an FYI that there is no video. So if you're watching on YouTube, you'll just see a lovely photo of their faces.
00:01:16
Speaker
And if you're listening as a podcast, there won't be any changes for you.
ASCA Conference Highlights
00:01:21
Speaker
but really quick before we switch to their conversation the ask a conference is this week this episode comes out on tuesday april 29th which means if you're listening today hst team is officially on site in colorado and we can't wait to see you all when the exhibit hall opens on wednesday night hst will be at booth number 303 all week right up front in the exhibit hall So stop by to say hello, grab a copy of the State of the Industry Report, take a quiz for a chance to win a prize, and check out all of our latest solutions.
00:01:54
Speaker
This is always one of my favorite weeks in our industry. So if you are here in Colorado for the ASCA Conference, I hope you get the most of your time here and please come by booth number 303.
HSC's Industry Report Methodology
00:02:04
Speaker
And with that, I hope everyone enjoys the episode and here's what's going on this week in Surgery Centers.
00:02:14
Speaker
David, welcome to the podcast. Thank you for having me, Bill. Good to be here. So David, before we jump into some of the findings, could you take a couple of minutes to tell us about your methodology and the extent of the data you gathered for the report?
00:02:26
Speaker
I'm a happy to, you Bill. And I guess before I get started, I just wanted to provide a shout out to two HST Pathways team members, Will Evans and Eric Palmer, who led these efforts for HST. And really the intention of this report is to take a wealth of data that we luckily have at HST and help share some insights to ultimately shine lights in areas that ASCs can potentially improve their performance and optimization.
00:02:53
Speaker
And just as a reference point, Currently today, HST touches roughly 11% of the surgical population in the United States. We're in over 1700 ASCs and all the way from the point of scheduling through post-service revenue cycle management, we've got a wealth of data that ultimately led to our ability to create some of this industry report and the benchmarking work.
00:03:16
Speaker
But specifically, what we used in the industry report came from 590 surgery centers across 47 states and north of 3 million cases that were managed out of HST pathways.
00:03:30
Speaker
And these are data points that we had explicit permission from our clients to use their de-identified data in order to to help create this report. And the report itself is 50 chapters, more than 130 KPIs and over 35 charts with a lot of year-over-year trends to help give some insights as to how the AESC industry has evolved it. It expansive. And I think it's just a tremendous resource and something that I think everyone in the AESC community will find some really interesting information about.
Five Key Trends from HSC Report
00:04:02
Speaker
As head of the report, you highlight five ASC-related trends that emerged from your data in 2024. Can you briefly touch on each of those? ah Sure. So the first major trend that we've noticed is cardiology, and this is a specialty that is on the rise in the ASC space.
00:04:20
Speaker
And the cardiology trends in surgery centers between 2023 and 2024 ultimately reveal shifts that the average duration of operating time needed for these procedures decreased by an impressive 28%. And I share that because of One of the things that obviously makes the ASC environment very attractive vis-a-vis the hospital environment is the efficiency which physicians can perform their procedures. and cardio being a new specialty in the ASC space, we're just seeing these impressive efficiency gains as cardio increases penetration in the ASC market.
00:04:58
Speaker
And so you you combine this improving efficiency but with high net revenue per case, which we see data as $4,600 on average per case.
00:05:09
Speaker
And those two combined mean that we're seeing very impressive improvements in overall revenue per minute of operating time in the ASC setting, where in 2024, that was north $132 per minute.
00:05:23
Speaker
dollars per minute which was about a 30% year-over-year increase vis-a-vis 2023. And so this being one of the newest specialties in the ASC space, higher acuity, higher dollar procedures, and great level of efficiency for these physicians, we just think that this is going to be a specialty that's going to do great things in the ASC space.
00:05:45
Speaker
David, that that's fascinating information. And as you may know, cardiology is very much on our mind on the on the advocacy front. And one of the things that we're really looking to do with but Medicare is obviously convince CMS that we can be safely performing many more of these procedures on Medicare beneficiaries as well.
Deep Dive into ASC Trends
00:06:01
Speaker
Great. Second major insight that we have and share in the report is that orthopedics achieved almost a 5% growth in net revenue per case. And Bill, as you're aware, orthopedics continues to generate some of the highest net revenue per case within the ASC environment.
00:06:17
Speaker
And in 2024, This increased to $6,400 per case versus $6,100 per case in 2023. And we really see this growth reflecting the demand for orthopedic procedures and potentially higher reimbursement rates of a greater mix of complex cases.
00:06:36
Speaker
and And this consistent rise in revenue underscores how important orthopedics is from a surgical specialty perspective in the ASC market. And so yet again, this is another specialty alongside cardio that we expect to so continue to see a high level of growth.
00:06:53
Speaker
Yeah, and I think important for our listeners, particularly outside of the AASC community, to understand is we're still providing tremendous efficiencies and savings by having those procedures being performed in the surgery center versus the hospital. So even though revenue might be going up, still when a case goes to the surgery center, the patient, the payer is saving an enormous amount of money almost all the time.
00:07:15
Speaker
Absolutely. The third key insight, and this this one surprised me in the data, was a really impressive improvement in claim denial rates across ASCs.
00:07:27
Speaker
And it dropped from first submission denials of 8% to 4% in the ASC setting. And to us, this trend really reflects more effective revenue cycle management, possibly due to better documentation and improved coding practices.
00:07:43
Speaker
and also the use of more technology and AI to to help ensure clean submission of claims. And obviously reducing denial rates by half in this case allows surgery centers to capture more revenue and reduce the administrative burden of resubmitting claims.
00:08:01
Speaker
So I think another key positive indicator of ASC understanding how to operate, in this case, as a business more effectively, submit claims more effectively, and drive more positive differentiation by a revenue cycle.
00:08:17
Speaker
That's a powerful data point. And to your point, I guess the more effort that's put in on the front end of that claims process is paying off on the back end, and that's where your data is showing. Absolutely.
00:08:28
Speaker
i'm On our insight number four, it was that ASCs with two ORs saw the highest level of year-over-year growth. And I'm sure all of our listeners know in this case that we'll see ASCs from one to 20 operating rooms, but we typically see ASCs grow in the number of operating rooms that they have over time.
00:08:50
Speaker
And as they have more utilization of the existing operating rooms, or they may bring in additional specialties into the ASC. That's where you see a lot of that same ASC growth over time. But in the in the case of two OR facilities, they saw the highest level of revenue growth at 22% year And so we we think that this surge may indicate that these are becoming more efficient or a better positioned to adapt to market demands.
00:09:20
Speaker
And in contrast, larger ASCs with 15 plus ORs experienced an 8% decline. So there seems to be this level of sweet spot that I think at the end of the day comes down to how are you balancing your operating room utilization in a way that can drive greatest case volume, but efficiency of that case volume with a high level of utilization.
00:09:43
Speaker
Again, just an amazingly interesting data point that I think ASCs around the country are going to really look to and think hard about. Agreed. So the the last insight, and I'll try to be quite brief with this, is that partial payments increased while total payments decreased.
00:09:58
Speaker
And between 2023 and 2024, ASC's experienced a shift in payment patterns and partial payments increased from 41.2% to 56.2%, indicating some patients are paying in installments and payers are reimbursing incomplete amounts.
00:10:16
Speaker
Meanwhile, total payments decreased from 25.8% to 17%, suggesting that fewer patients are settling their bills in full. And this trend overall emphasizes the need for improved payment plans and financial assistance options and strategies to boost collections are really important facets for our ESC partners and facilities to get their hands around.
00:10:42
Speaker
That's also very fascinating. and And for the listener, we asked David to limit himself to five trends. You probably could have done 500 based upon just the immense amount of data that you have in your system and in this report. So thank you for those highlights.
00:10:54
Speaker
I want know your report also covers best practices for revenue cycle management and a lot of detailed billing and payment information like you were just discussing. Can take a moment and focus on the effects we're seeing from the increased demands for prior authorization?
Revenue Cycle Management Challenges
00:11:09
Speaker
Sure. and So and I'm going to go into a few different areas here, but on the, yeah I guess as as you think about some of the revenue cycle benchmarks broadly, preauthorization is such a critical component when required in order to to optimize the revenue cycle reimbursement rates and and denial minimization.
00:11:33
Speaker
But we saw that in 2024, only 24% of cases completed pre-authorization when it was required, meaning that three quarters of the time, even though we know a pre-authorization is required, the facility was not submitting or completing that pre-authorization.
00:11:49
Speaker
That is up slightly from 2023 when only of cases completed preauthorization when it was required Obviously, the impact of that are delays in patient care, scheduling issues, claims denials, and they also impact speed to revenue as well as patient satisfaction and administrative headaches.
00:12:10
Speaker
And so these are this is something very easy to improve. And ah we feel in this case, big use of technology that integrates with your clearinghouse and payers to automate pre-authorization checks.
00:12:23
Speaker
is really an intuitive way to help improve those statistics. And a good practice management system or EHR can streamline these processes as well and reduce manual errors and alert your team of potential issues before they arise.
00:12:39
Speaker
And that's on the pre-authorization side. I'm not going to go into like the full details across the the rest of the board on those benchmarks, but we see some similar trends with patient deposit collections where in 2024, ASCs collected 51% of expected patient deposits at the time of service.
00:12:57
Speaker
This was actually a decrease from 55% of patient deposits at the time of service. And patient bad debt is a challenge in the ASC environment and bill is it can be confusing for patients who get a bill from the physician, and from the ASC and the anesthesiologist.
00:13:15
Speaker
And that billing process and some of the lack of visibility into patient responsibility can ultimately impact patient deposit collections. And then there's some blocking and tackling aspects of revenue cycle management, a big piece of that being days to bill.
00:13:31
Speaker
And in 2024, ASCs took 4.4 days to bill following the procedure. This was an increase in amount of time versus the average of 3.6 days in 2023. I think some of that's a reflection of ASCs high level of growth and being busy, but the longer billing cycles obviously impact cash flows. And so being very maniacal about the billing process is really important for the financial health of the business.
00:14:00
Speaker
and And then lastly, um on the claim denial rate, I already mentioned that there was a positive improvement of 4% denials versus 8% in 2023. and twenty twenty three And this obviously is a big tailwind for the ASC clients, but really systematically breaking down the revenue cycle process, understanding how you perform versus some of these benchmarks, which is in the 150-page report.
00:14:25
Speaker
It's available for free on our website. I think it can help really give ASCs and listeners this podcast an understanding of really how they're doing versus a broad audience in the ASC space.
00:14:36
Speaker
I think you're exactly right. And and the the last few things you touched on, thinking like pre-authorization, there's some really low-hanging fruit for a lot of surgery centers to both improve their bottom lines in terms of their cash flow and also prevent some patient frustration in terms of having to delay care because of not paying attention to those pre-authorization requirements. So As I said, i think anyone would benefit from reading this report.
00:15:01
Speaker
There's so much more insightful information in the report than we have time to talk about. So again, i like you just did, I encourage our listeners to download a copy for themselves from the HST Pathways website.
00:15:12
Speaker
Any final thoughts you'd like to share before we wrap this up? Briefly, want to share an observation more broadly, participating in the ASC space for a period of time and also having access to some of the data that we share today.
00:15:26
Speaker
and Bill, that's the, think five to 10 years ago, it was much easier to profitably operate an ASC, but with the really impressive growth of the ASC market and increasing competition and consolidation within the ASC space,
00:15:44
Speaker
We're seeing that the game is changing a bit and the world is really turning into the world of haves and have-nots in terms of overall performance of ambulatory surgery centers.
00:15:56
Speaker
And something as simple as increasing utilization of OR time by 10 to 20%, we see can have between a half a million dollars and two and a quarter million dollars in annual net revenue impact depending on specialty mix.
00:16:12
Speaker
And so really having a high level of of focus on proactive operations is what's allowing the best ASCs to perform at the highest level.
00:16:25
Speaker
and it And broadly, what we're seeing that the ASCs that are being surgical with OR utilization and case mix, and they're analyzing their case profitability alongside trying to automate manual processes, including revenue cycle management.
00:16:41
Speaker
It's those centers that also benchmark everything to understand where they sit but vis-a-vis the market and their competition and even within their own facilities. And then lastly, really forecasting the hiring needs and supply chain needs.
00:16:55
Speaker
alongside optimizing the physician experience. it's It's these different components that are allowing some of the top decile ASCs to perform really at an elite level.
00:17:07
Speaker
And so part of the intention of releasing the state of the industry report and sharing some of this rich data with the market is to help guide ASCs as well as our partners into some of these best practices.
Conclusion and Market Growth
00:17:22
Speaker
And so we are all lucky to participate in such a beneficial and rapidly growing market as to the ASC space. And I think through focusing on some of these business operations and best practices, we can continue to see this higher level of performance and optimization of ASCs as more and more higher acuity procedures get approved so into these facilities.
00:17:44
Speaker
I couldn't agree more. One of the things that we always trumpet about the AAC model is its efficiency. And I think, as you've rightly pointed out, it is harder and harder to be efficient because of all the challenges and headwinds that have come up over the last 10, 15 years.
00:18:00
Speaker
And this report, I think, highlights that just the many different ways and many different elements that you have to be pay close attention to if we want to remain efficient. And if we want to remain that one little rational place in health care,
00:18:14
Speaker
that that kind of works right, provides great care at a lower cost to to to the patients that need that care. So I want to thank you once again for we're producing this amazing report and for your team and for spending some time with me today and for HST Pathways' continued support of ASCA and our members.
00:18:34
Speaker
And I look forward to seeing you and your colleagues at ASCA 2025 in Denver at the end of April. Thank you, Bill, and appreciate the opportunity to to be on the podcast today. And we equally thank you for all of the efforts and evangelism and support that ASCA provides to the ASC space.
00:18:50
Speaker
Thank you David.