Which spine surgeries belong in the ambulatory surgical center? Determining economic viability using time-driven activity-based costing

OBJECTIVE: To identify which spine procedures are suitable for transition from the outpatient hospital setting to the ambulatory surgical center (ASC), it is essential to know their true costs. Using time-driven activity-based costing (TDABC), the authors sought to 1) determine the true costs of various spine surgeries performed in an outpatient hospital setting, and 2) compare these costs with Medicare ASC reimbursement to identify which procedures are most economically suitable for transition from the hospital to the ASC. METHODS: A retrospective cohort study (2020-2024) was conducted of spine procedures performed in an outpatient hospital setting (length of stay ≤ 1 day). Cervical procedures included disc arthroplasty and anterior cervical discectomy and fusion (ACDF), and lumbar procedures included laminectomy/decompression, microdiscectomy, endoscopic discectomy, and fusion. The true cost of each procedure was calculated using TDABC. Procedure-specific Medicare ASC reimbursement (including both facility and physician fees) was obtained. The primary exposure was procedure, while the primary outcomes were costs and the proportion of cases in which the total cost was below corresponding Medicare reimbursement. Multivariable logistic regression controlled for age, sex, BMI, and number of levels. RESULTS: A total of 2148 procedures (1274 lumbar, 59.3%; 874 cervical, 40.7%) were analyzed. The mean total episode cost for cervical procedures was $11,118 ± $5210. Most ACDFs (n = 574, 71.8%) were less expensive than their corresponding ASC reimbursement, compared with only 30 (40.0%) disc arthroplasties (p < 0.001). On multivariable analysis, ACDFs were significantly more likely than disc arthroplasties to cost less than reimbursement (OR 5.3, 95% CI 3.0-9.4; p < 0.001). The mean total episode cost for lumbar procedures was $4640 ± $6475. Fusion had the highest total cost ($25,042 ± $15,645), while microdiscectomy had the lowest ($3233 ± $2142) (p < 0.001). Microdiscectomy (n = 451, 95.3%) and laminectomy/decompression (n = 581, 94.5%) had the highest proportion of cases in which total cost was below the corresponding reimbursement. On multivariable analysis, endoscopic discectomy (OR 0.01, 95% CI 0.0-0.0; p < 0.001) and posterior lumbar fusion (OR 0.02, 95% CI 0.0-0.1; p < 0.001) were significantly less likely to keep costs below reimbursement, whereas laminectomy/decompression (OR 6.0, 95% CI 3.8-9.5; p < 0.001) and microdiscectomy (OR 4.7, 95% CI 2.8-7.9; p < 0.001) were significantly more likely. CONCLUSIONS: In existing payment structures, microdiscectomy, lumbar laminectomy/decompression, and ACDF might be most suitable for transitioning from the hospital to the ASC. However, to broaden the scope of procedures that can be feasibly performed in the ASC, there is a need for reimbursement reform.