Impact of Expansion of Ambulatory Surgery Centers on Rural Hospitals and Communities

Research center:
Lead researcher:
Project funded:
September 2007
Project completed:
September 2009
Many procedures traditionally provided in inpatient environments have been shifting to outpatient settings and into freestanding ambulatory surgery centers (ASCs). Hospitals warn that a continuing reduction in the volume of procedures threatens their financial viability and quality of care and diminishes their ability to provide uncompensated care and needed services that are not self-supporting. While some hospitals respond vigorously to such market challenges, smaller rural hospitals are less likely to respond effectively due to differences in purchasing power, capital, workforce resources, and market expandability.

This project will examine the extent of freestanding ASC expansion into rural communities between 1998 and 2005, the market factors driving that expansion, and the impact of ASCs on the operational and financial viability of rural hospitals located in the same communities.

The study sample includes all non-federal, general medical-surgical rural hospitals operating in a county or Health Service Area (HSA) where a freestanding ASC is located. Analyses will be conducted using data on hospital characteristics from the American Hospital Association annual survey, hospital financial measures from CMS Medicare Cost Reports, market measures from the Area Resource File, and ASC characteristics from the Medicare Provider of Services (POS) files. POS data will be used to identify rural communities with ASCs and AHA data will be used to identify community hospitals located in the same counties and HSAs. Cost report information will be used to assess the financial impact of ASC operations on neighboring rural hospitals. A control group of rural hospitals serving communities that do not have ASCs will be identified for a pre/post ASC impact analysis.

The products of this project will include a working paper, a policy brief, and an article that will be submitted to a peer-reviewed journal.


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