Toward a prospective payment system for ambulatory surgery

In this article, ambulatory surgery among the aged Medicare population in 1985 is examined. Total hospital facility charges for ambulatory surgery in that year were estimated at $1.8 billion, with about one-half of that amount involving cataract surgery. The possibility of using diagnosis-related groups for a prospective payment system for ambulatory surgery was examined and was rejected for two reasons: (1) about 20 percent of the dollar volume of hospital-based ambulatory surgery fell into medical diagnosis-related groups and (2) the ratio of inpatient diagnosis-related group weight to outpatient billed charges for the ambulatory procedures falling into a given diagnosis-related group varied more than tenfold, making diagnosis-related group weights impossible to use in a consistent manner. A newly developed version of ambulatory visit groups and the even newer ambulatory patient groups were then considered as an alternative for a prospective payment system. These are briefly described.