Optum’s recent acquisition of SCA has the potential to alter the outpatient surgery landscape more than any other transaction or piece of legislation in recent history.
Upon the closure of this $2.3 billion deal, Optum can combine its wealth of data (180 million lives of claims and 85 million lives of clinical data) and contracting intelligence (revenue enhancement, coding improvement, and charge optimization) with the payer contracts held by SCA, including contracts with Aetna, Anthem, individual Blue Cross and Blue Shield state health plans, Cigna, Humana, and dozens of smaller payers across the country. Assuming that information and data gained from the SCA deal would be accessible to UHC to inform their business decisions, there are many likely impacts to the way outpatient surgery is delivered and reimbursed.
Optum will be aligning its existing OptumCare division, consisting of 20,000 affiliated physicians and hundreds of urgent and advanced care facilities, with SCA’s surgical facilities, creating a vast integrated network of healthcare services focused on value-based care. These resources could then be paired with benefit design changes by UHC to offer low, or no, cost sharing for patients receiving care at an SCA facility. These together could change consumer behavior and, if physicians are similarly incentivized, referral patterns. This would result in shifting greater volumes out of the inpatient setting and away from competing outpatient surgery facilities, particularly in markets with a strong SCA footprint.
The unprecedented level of access to contracting terms and rates could do more than just enable Optum to optimize SCA’s contracts and maximize its reimbursement from other payers. The insight into a vast array of surgical cost data and advanced analytics could also allow UHC to place downward pressure on surgery reimbursement in many markets. This could be realized as rate decreases for current outpatient services, or, more likely, focus on pushing a greater percentage of cases out of the more expensive inpatient setting by altering contract terms or policies to increase the number of surgical procedures allowed in the outpatient setting.
This transaction will impact both ASC operators and health systems going forward and could change the strategies that these organizations pursue.
What ASCs Need to Do
ASC operators will want to differentiate themselves and increase their contracting capabilities to ensure continued financial stability. This can be accomplished by evaluating existing contract structures and preparing to negotiate contracts that allow their ASC to provide more value through service line, procedure, or specialty expansion, which would likely require rate negotiation with their payer partners.
ASC operators should also discuss the ever-changing landscape with their physician partners to ensure that all clinically appropriate surgeries are being performed in the ASC, which has the dual benefit of lowering the cost for payers and patients and resulting in greater incentive payments (to the extent that the ASC has value-based contracts, such as shared savings arrangements).
What Health Systems Need to Do
Health system and hospital leadership that have not already begun doing so will want to develop and implement a robust outpatient surgery strategy. Although the cost differential that UHC could offer to patients for seeking care at an SCA facility may influence patient decision making, patients are also likely to follow the recommendations of their physician. For this reason, the goal of an outpatient surgery strategy would be to maintain surgical volumes by offering cost-competitive outpatient surgical procedures and minimizing service leakage through its employed physician network. This will involve collaborating with key physician stakeholders, assessing community and market needs, defining value creation opportunities, and establishing an organizational structure that supports the transition to value- and quality-based surgical care.