Health Affairs Of Surgeries Physician - Ownership Of Ambulatory Surgery Centers Linked To Higher Volume

Many physicians confronting declining reimbursement from insurers have invested in ambulatory surgery centers, where they perform outpatient surgical and diagnostic procedures. An ownership stake entitles physicians to a share of the facility’s profits from self-referrals. This arrangement can create a potential conflict of interest between physicians’ financial incentives and patients’ clinical needs. Our analysis of Florida data for five common procedures revealed a significant association between physician-ownership and higher surgical volume. Possible remedies include revising federal law to require disclosure of investment arrangements; reducing facility payments to dilute ownership incentives; and reforms (such as accountable care organizations) that discourage an excessive rate of procedures. T he past decade represented an era of expansion for ambulatory surgery centers. Commonly referred to as surgicenters, these are nonhospital-based facilities that exclusively furnish ambulatory surgical services (that is, procedures not requiring hospitalization, such as cataract removals, certain knee and ear surgeries, and colonoscopies). Between 2000 and 2007, the number of Medicare-certified surgicenters increased by nearly 50 percent to 5,349. This growth was largely underwritten by the investment of physicians, who had a stake in83percent of these facilities andowned43percent outright. Increasing investment in these centers may reflect an attempt by providers to assert greater control over their professional lives, such as by having greater authority in scheduling surgeries and in purchasing equipment. They may also be enabled to deliver care more efficiently. Alternatively, this investment trendmay be explained by declining reimbursements for physician services and rising practice costs. These economic pressures have intensified providers’ interest in nontraditional revenue sources, such as surgicenter investment, as a means of generating extra income. Regardless of the reason for increasing investment in them, it is important to note that surgicenter ownership creates a potential conflict of interest for physicians.Ownership entitles physicians to collect a share of the facility’s profits from referrals in addition to their professional fees. Insofar as physicians feel pressure to see their investment succeed, physicianowners may lower their thresholds for intervention, exposing the health care system to the harms and additional costs associated with unnecessary treatment. Prior Studies The study of physician investment in surgicenters is hampered by the fact that direct ownerdoi: 10.1377/hlthaff.2008.0567