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Technological changes in medicine have created new opportunities to provide surgical care in lower cost, specialized facilities. This paper examines patient outcomes in ambulatory surgery centers (ASCs), which were developed as a low-cost alternative to outpatient surgery in hospitals. Because we are concerned that selection into ASCs may bias estimates of facility quality, we use predicted changes in federally set Medicare facility payment rates as an instrument for ASC utilization to estimate the effect of location of treatment on patient outcomes. We find that patients treated in an ASC are less likely to be admitted to a hospital or visit an emergency room a short time after outpatient surgery. The findings in this paper indicate that factors other than patient and physician heterogeneity contribute to the observed returns to specialization in the ASC market.

Article-at-a-Glance Background As payers, purchasers, and providers, both the public and private sectors have a stake in developing sound methods of measuring health care quality and patient safety. However, the role of the private sector in a national quality monitoring system remains largely underdeveloped. Private sector role in health care quality monitoring There have been some attempts to pool private-sector data through health care industry efforts to measure and monitor the quality of health care services. Yet despite a number of public/private partnerships, no standard method exists for measuring and monitoring health care quality and safety across public and private payers. The AHRQ workshop on private-sector quality monitoring The Agency for Healthcare Research and Quality (AHRQ) sponsored a workshop in fall 2000 to address the private sector's role in monitoring quality in the health care system. National experts developed a conceptual framework and recommendations on the design and scope of a private-sector data monitoring system. Ten key attributes of the monitoring system, such as timeliness of reports, flexibility, efficiency, and linkability, were identified. Barriers and gaps to the development of such a system include the cost of data collection, the diversity of the units of data collection, data privacy, and limitations of administrative data elements. Summary A comprehensive, public/private data collection system would address the multidimensional nature of quality and use data to effectively represent this complexity to the extent possible.