Lower Costs, Better Outcomes: The ASC Advantage

As healthcare costs continue to rise at an unsustainable pace, the need for change has never been more urgent. Patients, employers and payers alike are increasingly seeking high-quality, lower-cost alternatives for outpatient care. Recent research published in The American Journal of Managed Care adds new weight to this conversation, revealing that hospitals charge an average of $3,077 more in facility fees for common outpatient procedures than Ambulatory Surgery Centers (ASCs). In inpatient settings, Medicare reimburses approximately $18,000 for joint replacements, compared to $10,500 in ASCs, a meaningful difference for high-volume procedures like Total Knee Arthroplasty (TKA) and Total Hip Arthroplasty (THA), for which aggregate annual volume approaches 800,000 procedures. Private insurance plans, such as Blue Cross, typically pay a rate higher than Medicare for beneficiaries covered through employer sponsored medical benefits.

That cost disparity, ranging from 101% to 167% higher at hospitals, is more than just a number. It translates into tangible financial burdens for patients, unnecessary expenditures for payers and unsustainable strain on our healthcare system. The solution, in many cases, is already available, but often underutilized.

At Athens Orthopedic Clinic (AOC), we’re proving that there is a better way with three wholly-owned Ambulatory Surgery Centers. By fully leveraging the ASC model, we consistently deliver high-quality surgical care at up to 40% lower cost compared to traditional hospital settings without compromising outcomes. Our focus on orthopedic procedures has put us at the forefront of a national movement that is transforming how and where specialty care is delivered. Our aim is to perform 70% of all surgical cases within our Ambulatory Surgery Centers and save $5 Million annually for patients and the business community.

High Quality Doesn’t Have to Mean High Cost

The myth that lower cost means lower quality has long dominated healthcare, but the data tells a different story. Numerous studies have shown that ASCs meet or exceed quality metrics compared to hospitals for a wide range of procedures. At AOC, our infection rates, patient satisfaction scores and post-op recovery outcomes consistently outperform national averages.

ASCs are uniquely positioned to deliver this value. With streamlined operations, specialized staff and a patient-centric model, ASCs minimize overhead and maximize efficiency. That allows us to focus on what matters most: providing excellent care while lowering the cost burden on patients, the business community and payers.

Real-World Impact on Patients and Systems

The consequences of inflated hospital-based outpatient pricing are real and deeply personal. For many patients, the difference in facility fees could mean the ability to afford a surgery at all, particularly for those with high-deductible health plans. For employers and insurance providers, the financial impact scales quickly. Multiplied across thousands of procedures annually, the savings from choosing ASCs over hospitals are not just significant—they’re transformative.

In an era where 1 in 4 Americans report skipping care due to cost, improving access to affordable surgical options is not just a financial imperative, it’s a moral one.

Removal of the Inpatient Only List (“IPO”)

The Medicare IPO list was formed in 2000 to require a large number of surgical procedures to only be performed in the hospital setting. In 2017, Medicare removed the TKA, and in 2020 the THA was removed from the Inpatient Only list. Since that time, the number of TKA cases in the hospital have declined by 84%, and the number of THA cases has decreased by 66%. The result—a massive reduction in cost of care across the U.S.  

Looking more broadly, the Centers for Medicare & Medicaid Services (CMS) estimates that the phasing out of the Inpatient Only List will lead to $280 Million in total savings for Medicare and its beneficiaries in 2026 alone. Similar to knee and hip replacement surgery, spine surgery will soon be undergoing a significant shift away from hospitals. Athens Orthopedic Clinic recently opened Georgia’s first ‘private’ ASC that specializes in spine and joint replacement surgery and is well positioned to lead the industry in driving down the overall cost of care. This shift in market forces translates to the business community as AOC applies the same care standards for all, regardless of the type of insurance.

The Remaining Roadblock: Certificate-of-Need Laws

Unfortunately, many states are still governed by restrictive certificate-of-need (CON) laws that limit the expansion of ASCs. These outdated regulations, originally intended to control healthcare costs, are now having the opposite effect. By stifling competition and limiting patient choice, CON laws protect incumbent hospital systems at the expense of innovation and affordability.

The study from The American Journal of Managed Care makes a compelling policy argument: expanding ASC access, especially in underserved and rural areas, could dramatically reduce overall healthcare costs while maintaining or even improving quality of care.

At AOC, we’ve seen this firsthand. Our ASC allows us to serve a broader patient population more efficiently and affordably, relieving pressure on local hospitals and improving overall access to timely care. But our ability to replicate and scale that success is limited by regulatory red tape.

A Path Forward

As leaders in healthcare, we must embrace the models that are working and remove the barriers that prevent them from reaching more people. Expanding access to ASCs should be a bipartisan priority. It aligns the goals of patients, employers and payers to make healthcare more affordable. Most importantly, it promotes a healthcare system that is both sustainable and humane.

At AOC, we remain committed to delivering affordable, high-quality orthopedic care, and we urge policymakers, employers and health plan leaders to look closely at the data. When ASCs thrive, patients win. And when patients win, so does the healthcare system.

It’s time to move beyond the outdated assumptions that have driven up costs for decades. The future of outpatient care is already here. Let’s make sure it’s available to everyone.