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Opportunities to Improve the Value of Outpatient Surgical Care
Feryal Erhun, PhD; Elizabeth Malcolm, MD, MSHS; Maziyar Kalani, MD; Kimberly Brayton, MD, JD, MS; Christine Nguyen, MD, MS; Steven M. Asch, MD, MPH; Terry Platchek, MD; and Arnold Milstein, MD, MPH

Opportunities to Improve the Value of Outpatient Surgical Care

Feryal Erhun, PhD; Elizabeth Malcolm, MD, MSHS; Maziyar Kalani, MD; Kimberly Brayton, MD, JD, MS; Christine Nguyen, MD, MS; Steven M. Asch, MD, MPH; Terry Platchek, MD; and Arnold Milstein, MD, MPH
Outpatient surgeries in the United States account for roughly 7% of annual healthcare expenditures. To exploit substantial opportunities to improve the value of outpatient surgical care, the authors composed an evidence-based care delivery composite for national discussion and pilot testing.
Standard workflows and nonlabor inputs. Clinical algorithms yield to standardized workflows that, in turn, allow lower-cost clinical team members to perform work that is currently performed by more costly health professionals. Standard workflows extend outside the procedure to encompass tasks such as discharge planning58,59 and turnovers to reduce operating room down time.60 Standardizing nonlabor inputs, such as surgical supplies, based on comparative effectiveness and price, reduces the cost of surgery and allows for volume-based price discounts from suppliers. It also simplifies purchasing and reduces the time and effort needed to tailor supplies to surgical team preferences. Such standardization may lead to cost savings of roughly 20%61 and improve quality of care by reducing variation in equipment and supplies that support staff members must master, thus reducing errors attributed to unfamiliarity. 

Continuous monitoring and adjustment of clinical algorithms and workflows. Additional reduction in variation can further boost the yield from algorithms and standard workflows by continuously analyzing deviations and making further refinements. As clinician confidence builds in algorithms, information technology tools, such as patient dashboards, automated check-in,62 and preadmission assessment,63 can ease care pathway implementation and improve the clinician and patient experience of care.

We estimate that net annual US savings associated with the REPLICATE element could approach $6.3 billion, or 3% of annual spending on outpatient surgeries after a 5-year implementation and refinement period.


Major opportunities remain to improve the value of US outpatient surgical care (Figure 2). To capitalize on these opportunities, we gathered evidence from diverse sources. The validity of our forecast for lowering the cost of better surgical care hinges on the quality and transferability of the evidence that we sourced. Pilot-testing of the Triple-R will reveal synergies and friction points among component parts.

Some elements of the composite, such as the expanded hours of operation, extend beyond directly relevant evidence and rely instead on successes in plausibly similar circumstances. When operationalizing such elements, it is important to consider context-dependent implementation hurdles; for example, expanding hours in the ASC context may present implementation challenges in incorporating provider and staff preferences for certain work hours. Furthermore, some of the reported efficiency in ASCs8,42,43 may be due to incentives to finish cases quickly because staffing is not performed in shifts. Thus, adding shifts may paradoxically lengthen case and turnaround times. Incentives, such as bonus payments for off-hour shifts may mitigate this issue. Expanded hours may also pose challenges to incorporating patient preferences. In previous studies of other procedures, patients have opted for inconvenient hours if the wait time for therapy was shorter.64 However, understanding patient preferences and trade-offs in elective surgery would be valuable; additionally, discounted pricing for unfavorable times may be considered.

We estimate that the potential for annual nationwide savings is roughly $40 billion net of implementation costs, or 19% of current annual spending on outpatient surgeries and more than 1% of total annual US healthcare spending. To achieve such savings, the Triple-R uses disruptive elements that would require structural and cultural shifts in the healthcare system. One such element is shifting procedures to ASCs despite current economic incentives to keep them in HOPDs. Our composite is designed with value-based payment, tiered networks, and reference pricing in mind, where such a tradeoff is indeed financially encouraged. However, even in other types of systems, market competition may ultimately work in favor of ASCs due to the low price, better convenience, and better quality. In addition, shifting higher turnover cases to ASCs will open up capacity at HOPDs, and allow them to streamline inputs and specialize their labor and care. Even with the shift, HOPDs will continue to produce a significant percentage of outpatient procedures (eg, complex procedures or procedures on medically complex patients).

The Triple-R focuses broadly on all outpatient procedures, but not all procedures will generate the same value. Future pilot studies will most likely focus on a smaller group of specialties. Although this choice will be site-dependent, there may be specialties and procedures that are likely to generate relatively more value from the application of our composite, due to, for example, a high volume of outpatient surgeries that can safely be moved to ASCs within the specialty. Our preliminary analysis suggests that certain procedures within the specialty areas of orthopedics, ophthalmology, plastic surgery, gastrointestinal, and gynecology may be good candidates for future pilot testing.

Results from pilot testing and scaling the proposed composite will hinge on each organization’s culture and management capabilities. Therefore, local operational and cultural factors must be a part of any implementation. The composite is designed to target levers with the highest opportunity to lower per capita healthcare spending safely. For example, even though there are opportunities to increase the value of care in HOPDs, ambulatory surgery represents a larger cost-reduction opportunity, and therefore has been chosen as the focus of the composite. Having said that, elements of REPLICATE can be used at HOPDs to increase efficiency and improve outcomes, while elements of REFINE apply to all outpatient procedures independent of surgical location.


Extrapolation based on published studies of the effects of each component suggests that the proposed 3-part composite may lower annual national outpatient surgical spending by as much as one-fifth, while maintaining or improving outcomes and the care experience for patients and clinicians. We have begun partnerships with healthcare organizations to assess the impact of the REFINE-RESET-REPLICATE composite. As clinicians and their organizations face increasing use of value-based payment, tiered networks, and reference pricing,65 its successful implementation and refinement may help secure their financial viability.


The authors wish to thank Dani Zionts, MSPH, for reviewing the article, and Rajbinder Mann for administrative support. They also thank Craig Albanese, MD, MBA; Jeffrey Belkora, PhD; John Chardos, MD; Alana Conner, PhD; David Hopkins, PhD; Mohit Kaushal, MD; Dhruv Kazi, MD; William Kennedy, MD; Thomas Krummel, MD; Richard Levy, PhD; Harold Luft, PhD; Richard Popp, MD; Stanley Rosenschein, PhD; Kristan Staudenmayer, MD; Ming Tai-Seale, PhD, MPH; Samuel Wald, MD, MBA; Thomas Weiser, MD; Paul Wise, MD, MPH; and Donna Zulman, MD, for their guidance. 

Author Affiliations: Clinical Excellence Research Center (KB, FE, MK, AM, EM, CN, TP) and Division of General Medical Disciplines (SMA, FE, AM, EM, CN), Stanford University, Stanford, CA; Department of Neurosurgery, Stanford University Medical Center (MK), Stanford, CA; Department of Pediatrics, Lucile Packard Children’s Hospital (TP), Stanford, CA.

Source of Funding: The study was supported by the Sue and Dick Levy Fund, an advised fund of the Silicon Valley Community Foundation.

Author Disclosures: The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.  

Authorship Information: Concept and design (SMA, KB, FE, MK, AM, CN, TP); acquisition of data (KB, FE, MK, AM, CN, TP); analysis and interpretation of data (SMA, KB, FE, MK, EM, AM, CN, TP); drafting of the manuscript (SMA, KB, FE, MK, AM, EM); critical revision of the manuscript for important intellectual content (SMA, KB, FE, AM, EM, TP); statistical analysis (CN); provision of patients or study materials (MK); obtaining funding (AM); administrative, technical, or logistic support (FE, EM, TP); and supervision (SMA, MK, AM, EM, TP).

Address Correspondence to: Feryal Erhun, PhD, Judge Business School, University of Cambridge, Trumpington S, Cambridge CB2 1AG, UK. E-mail:

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