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Sg2 2024 Annual Report Projects High Growth in ASC Volume

Three specialties will migrate to surgery centers more than others

BY SAHELY MUKERJI | JULY 8, 2024

Between 2024 and 2034, ASC volume will go up 21 percent to 44 million, according to Sg2’s 2024 Impact of Change report. “The aging population, epidemiological drivers and improved diagnostic capabilities will drive increased demand for surgical services over the coming decade,” says Tori Richie, senior consulting director of intelligence at Sg2 and Impact of Change lead. “The shift to ASCs will be highly variable based on local market dynamics.”

Overall outpatient (OP) volume will jump 17 percent to 5.82 billion over the next 10 years, while hospital outpatient department (HOPD) volume will go up 13 percent to 723 million, according to the report.

“Surgical volumes are expected to shift to lower-cost care sites, such as the ASC, for a variety of reasons, including clinical innovation, competition, payer pressures, physician alignment dynamics and consumer preferences,” Richie says.

“Changes in clinical care pathways and financial incentives make the procedural shift to ASCs increasingly attractive for physicians providing select surgical services,” Richie adds. “Reduction in cost of care and increased access to surgical services are enticing to payers and patients alike.”

Three specialties with significant ASC opportunity are orthopedics, spine and gastroenterology. “Surgical services for these service lines are largely performed as outpatient today,” Richie says. “Private equity firms are heavily invested in these service lines, contributing to their movement from the HOPD to the ASC. Physicians are increasingly participating in equity models that make it financially beneficial to perform these surgical services in the ASC. Because these services cost less to provide in the ASC, payers and consumers benefit financially from the cost savings, putting increased pressure on this shift.”

“Successful ASC providers will focus on timely access, high-quality and cost-effective care,” Richie advises.

Bill Prentice, chief executive officer of ASCA, points out, “As this report highlights, the incentive for more patients to seek safe and effective care in surgery centers continues. However, Medicare’s inadequate reimbursement rates must be addressed for this anticipated migration and related cost savings to occur.”

In addition to ASC growth, hospital capacity also will be challenged. The 2024 Impact of Change report projects inpatient (IP) utilization to rise 3 percent to 31 million annual discharges, while IP days to increase 9 percent to 170 million over the next decade, impacting healthcare organizations’ ability to manage the flow of patients. Growth in medical discharges will outpace surgical as patients age and are increasingly comorbid, exacerbating bottlenecks in the emergency department while patients are forced to wait for beds in the IP setting.

Other notable findings in the report include:

Behavioral Health—IP discharges and OP volumes are expected to grow 8 percent and 26 percent, respectively, over the coming decade. This increased demand will place further pressure on already constrained access points, such as primary care or psychotherapy services.

Bariatric—IP bariatric surgery volumes will see a 15 percent decline in the next decade, fueled in part by scaled adoption of pharmaceuticals coming to market, but also by a shift in commercial and self-paid bariatric surgical volumes to the OP setting, which is projected to see a 13 percent increase.

Virtual—Enabled by greater adoption of technological advances, 23 percent of evaluation and management visits will be delivered in a virtual setting by 2034. “You’ll see more uptake in virtual services that are consultative in nature, think chronic disease,” Richie said in a release. “Anything that leans surgical, such as orthopedics or spine, will have less virtual uptake.”

Care at Home—Further enabled by virtual capabilities, home health is expected to grow 22 percent. As the aging, high-acuity patient population continues to require longer stays in the hospital (9 percent IP growth), organizations must be intentional about how they plan their IP and OP service line strategies. “How many bed days could care at home save? What other capacity constraints could be relieved by a robust care at home offering? These are questions organizations should be asking to ensure resources are effectively deployed in a manner that achieves high quality outcomes for patients,” Richie said in the release.

Vizient Inc. released its annual Impact of Change Forecast from Sg2, part of the Vizient family of companies, on June 10. The report projects healthcare demand across service lines and sites of care for more than 27,000 unique disease and procedure combinations, helping organizations understand care delivery opportunities in the decade ahead, according to the release.