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The Accelerating Trend in Outpatient & ASC Surgery Post-Pandemic

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If someone needs a surgical procedure, providers and patients may have a choice to make about where to do that procedure. A growing number of surgeries are moving away from hospital inpatient procedures to either a hospital outpatient or an ambulatory surgical center (ASC). The trend isn’t necessarily new – it’s been happening since the early 2000s – but several recent shifts have accelerated the trend.

Data experts at Cedar Gate took a look at data on these trends to identify some key lessons that healthcare delivery organizations (HDOs) can glean from what’s happening, and how that might impact operational and care decisions moving forward.

Cedar Gate’s experienced data scientists examined our growing national benchmark database – analyzing data from more than 12 million commercial member lives – to delve deeper and identify some key lessons that healthcare delivery organizations can glean from what’s happening. We spoke with our experts to figure out what makes access to this type of data so valuable to payers, providers, and employers. It can provide insights that can improve care and patient experience, and reduce costs, all while meeting financial goals and objectives.



In the early days of the COVID-19 pandemic, there were a lot of unknowns. We didn’t know how deadly the virus would be, how it spread, how to treat it, or who might be most impacted. What we did know was that a significant number of people were entering emergency departments and hospital ICUs with a severe respiratory illness that appeared to be highly contagious – and far more deadly than a typical cold or flu.

The resulting wave of disease halted much of the regular operations for hospitals, as staff and resources were redirected to treating COVID cases. Additionally, patients who might have otherwise received planned care were delaying procedures to avoid the hospitals.

Not surprisingly, when data scientists from Cedar Gate looked at surgical care trends, they saw a dramatic drop in any type of surgery in April 2020 from around 175,000 per month in the prior months to around 70,000 in April.


Hospitals suffered significant financial losses from the drop in surgery volumes, particularly for “elective” procedures – those that are beneficial but not medically necessary to save a person’s life, such as a total knee replacement. An article published in JAMA Viewpoint shortly after the pandemic hit noted that about 30% of hospital revenue comes from elective surgery, particularly orthopedic and cardiac procedures. Early in the pandemic, the American Hospital Association (AHA) estimated that cancelled hospital services (primarily surgeries) would result in a loss of around $161 billion for U.S. hospitals just in the four-month period between March and June 2020.

Throughout the remainder of the year, much of the attention and expert analysis focused on how long it would take for surgical volumes to return to pre-pandemic levels. An analysis published by the University of Pennsylvania Leonard Davis Institute of Health Economics estimated that it would take an average of 12 to 22 months to clear the backlog of cancelled elective surgeries.

While surgical volumes did rebound within a few months, hospital revenues from these surgeries did not have a similar comeback. So what happened? Getting the whole picture requires diving a little deeper into those numbers.



When our data scientists examined surgical volume comparisons between 2019 and 2021, a clear picture emerged on the shifting locations of care. After the initial drop in April and May 2020, by June the number of procedures was back to its pre-COVID range. But rather than getting hospital inpatient procedures, patients were clearly moving toward other alternatives.


Inpatient surgery utilization levels (measured in claims per 1,000 members) for patients with commercial insurance were down 7.3% from 2019 to 2021. There was a corresponding increase in utilization rates for non-inpatient facilities. Hospital outpatient surgery volume was up 3.1%, but the biggest increase was in ambulatory surgical centers (ASCs), with utilization rates rising by 10.3%.

It’s not a new trend, but COVID likely accelerated it. We’ve seen changes and advances in surgical practice that make it easier to do certain procedures in an outpatient setting, say Cedar Gate’s national benchmarking data scientists. What was a slow movement away from hospital inpatient surgery started moving a lot quicker out of necessity. COVID made people fearful of being around others in a hospital who could infect them, and took away a lot of the beds that otherwise would have been used for non-emergency surgeries.

That trend is particularly evident in the commercial insurance patient population, since patients are younger than Medicare patients, and less likely to experience complications after certain surgeries. As a result of this shift, revenue from inpatient surgeries is probably not going to return to pre-2020 levels.

What does that mean for HDOs? That depends on your patients’ needs. The first step is digging into your data to determine exactly who deferred or cancelled surgery and what happened to those patients – finding the “why” behind the drop in inpatient surgery rates using advanced analytics software.

For example, some patients who deferred a total knee arthroplasty may have pursued less invasive treatment options, such as physical therapy. Our data show an increase in nonsurgical orthopedic care alternatives such as physical therapy (up 2.26%) between 2019 and 2021 that coincides with the reduction in surgery volume. If that provided relief, the patient may just need ongoing monitoring unless and until surgery becomes necessary in the future.

Other patients who deferred may still need surgery, and it’s up to the HDO to figure out where and when to schedule those procedures. Analytics tools can help you stratify patients into risk categories to determine how quickly those procedures should be scheduled, and whether an inpatient or outpatient care setting is most appropriate.




A lasting impact of the post-pandemic acceleration of surgeries moving away from inpatient settings is its ability to reduce costs and improve patient care and satisfaction. The average cost of a surgical procedure performed in an ASC, or in a hospital outpatient facility, is lower than the cost for inpatient surgery.

While not every patient is eligible for an outpatient or ASC procedure, those who are often experience the same or better outcomes when compared with inpatient surgery. All of these are critical factors that boost payers’ and providers’ ability to meet value-based care goals for various models, including MSSP and newer models like ACO REACH.

22In a comparison of costs for a total knee arthroscopy (TKA, or knee replacement) in the time period between July 2020 and June 2021, Cedar Gate’s data revealed that costs at an ASC or hospital outpatient department for patients with commercial insurance coverage were more than 22% lower than inpatient costs – averaging $23,895 and $24,020 (respectively) compared to $30,825.

Another study presented at the 2019 Annual Meeting for the American Academy of Orthopaedic Surgeons identified similarly significant cost savings by moving joint replacement surgeries from hospital inpatient facilities to ASCs.

This is part of a larger trend toward optimizing location of care to lower costs. When providers and patients aren’t able to accurately compare costs or don’t take costs into account for various treatment options, it can lead to increased utilization in high-cost healthcare facilities. For example, patients might remain in the hospital for multiple days following surgery when a long-term acute care hospital (LTAC) or skilled nursing facility (SNF) could provide the same care at a lower cost.

Go deeper: Read more about Kindred Hospitals achieving significant savings when patients utilized their LTAC facilities in the Las Vegas area.


Doctors or nurses walking in hospital hallway, blurred motion


As experts debated how long it would take for inpatient surgeries to return to “normal” after COVID, hospitals faced another daunting challenge: staff shortages. If all the patients who deferred or cancelled surgeries early in the pandemic tried to reschedule those procedures, there would not be enough clinical staff to meet the need.

In the 2022 State of Healthcare Performance Improvement report from Kaufman Hall, two-thirds of hospital executives said staff shortages affected their ability to operate at full capacity over the past year. Shortages – particularly in nursing – have led to significantly higher expenses and compounded the problem of declining revenue from lower inpatient surgery volume. Without enough candidates to fill vacant positions, many facilities resorted to contract labor (traveling nurses, for example), which costs significantly more than hiring healthcare workers as permanent staff.

A 2022 McKinsey report projects a shortage of 200,000 to 450,000 RNs and 50,000 to 80,000 physicians by 2025. This is a significant factor contributing to their projections that clinical labor costs will increase by 6 to 10% over the next two years.

However, ASCs and hospital outpatient departments face similar trends in staff shortages, as well as inflation putting pressure on total operating costs. In a recent survey, ASCs reported that it took an average of 111 days to fill open operating room nursing positions, and 109 days to fill surgical technologist openings. As volumes continue to rise, the pressures of inflation and staff shortages will likely affect revenue for these alternative surgery sites.



Most hospitals today don’t suffer from a lack of data. But they do run into the challenge of being able to translate raw data into meaningful information that can improve operational decision making that optimizes spend while improving patient outcomes and satisfaction.

According to our data scientists, healthcare delivery organizations need an in-depth understanding of:

  • Risk characteristics of their populations
  • Utilization metrics, both positive and negative
  • Quality metrics that impact care and patient satisfaction
  • Benchmarking data to compare these metrics with local and national competitors

Since all hospitals and healthcare facilities have limited resources, it’s impossible to focus on everything. Accurate, broad, and in-depth data analytics capabilities help these organizations find the things they can tackle that will be most meaningful in achieving cost, quality, and patient satisfaction metrics. That ability to narrow down the things that HDOs can impact immediately also reduces the risk of burnout for overworked staff and clinicians.




Another critical factor emerging in value-based care models is the focus on health equity. CMS and commercial payers are asking organizations to collect, report on, and build effective care models that address inequity and access to care for traditionally underserved populations. These changes are welcome (and long overdue) to ensure better overall health within a population. But they’re not easy to achieve. Legacy analytics software generally won’t have the capabilities to pull in critical data from sources like the Area Deprivation Index or social determinants of health surveys, and translate it into meaningful and actionable ways clinical teams can address access to care issues.

As value-based care models progress and these requirements increase, having forward-looking analytics technology will position organizations to achieve higher quality care and improve population health.



VBCA-1-1With the volume of data available today, tens of thousands of clinicians and administrators have turned into de facto data analysts. Some healthcare organizations have tried to build their own analytics tools to make sense of the information they have, but run into the serious problem of not being actual data scientists. The tools are functional to see data, but don’t have the expertise to truly make a meaningful impact on care delivery.

That’s where the benefits of software with a team of data scientists behind it comes in. Data science advances because people stand on the shoulders of those who came before them. Cedar Gate has already invested the time and effort into tools that will pull the relevant information from your data. We’re not starting from scratch.

When it comes to data analysis, easy should be easy, and hard should be possible. Fortunately, Cedar Gate’s analytics tools make both possible.

About Cedar Gate’s National Benchmark Database

Cedar Gate Technologies has access to anonymized data from more than 12 million member lives in our database. It comes from claims information through commercial payers (not Medicare or Medicaid) nationwide that are using Cedar Gate’s composable solutions for analytics, data management, population health and care management, and payment technology. A significant portion of these payers are self-funded employers.

Two things make this information particularly useful for analysis: breadth and depth, according to our team of data experts. It’s a good cross-section of the entire commercial patient population across several geographies and age groups. We don’t just look at local or regional data – for example, if all our information was from the Northeast, it would look very different from what’s happening for patients and payers in California. Additionally, the database spans multiple years and includes in-depth information from any and all billable healthcare services.

Having access to that much information helps Payers, Providers, and Employers improve their risk analysis and forecasting, since they can see beyond just their own patients or members. It reduces the chance of working with skewed information and assumptions based on the area of medicine you practice, your geographic region, or your specific population, according to our analysts.

Cedar Gate clients have access to this type of information to utilize in benchmarking and planning. The insights can provide information on best practices in care pathways, as well as operational decisions that will impact the bottom line.

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