Oct 11, 2018 3 min read

The Pennsylvania Health Care Cost Containment Council released another report today, this one on fiscal 2017 finances at ambulatory surgery centers statewide.

Statistics were listed for 289 ASCs that operated in the commonwealth last year. Of them, 51 centers (18 percent) are in Region 1 of the study, made up of eight counties: Washington, Greene, Allegheny, Armstrong, Beaver, Butler, Fayette and Westmoreland.

None of these outpatient facilities was in Greene County. Four were in Washington County: Peters Township Surgery Center; Southwestern Pennsylvania Eye Center (Washington); Spartan Health Surgicenter (Carroll Township); and Tri-State Surgical Center (Washington).

Determining what these statistics mean is difficult, however. Patrick Garman, Spartan’s executive administrator, said they are factual as they pertain to his location. But he said there are numerous factors that affect the numbers, and how they compare with other dollar figures and percentages.

“There are a lot of moving parts throughout any given year,” he said. “Surgical centers are a volatile business. Disciplines are added, doctors retire, reimbursements are tricky. Profit margins are all over the place. You may see a 30 percent profit margin one year and 17 another year.”

For the most part, he said ASCs are privately owned, small and for outpatient procedures. Some, he added, are single-disciplinary – such as gastroenterology – and others multi-disciplinary, which affects figures. Spartan, which partners with Monongahela Valley Hospital and a number of physicians, is multi-disciplinary: gastro, ophthalmology and pain management.

“This forces us to be lean and very light,” Garman said. “We do the best we can on reimbursements. We also have a zero percent infection rate.”

Spartan Health, according to the study, had net patient revenue of $3,297,000 last year, below the averages for Pennsylvania ($4,743,000) and Region 1 ($4,439,000). Its total operating expenses were $2,756,000 in 2017, below the state ($3,578,000) and region ($3,738,000). The center’s operating margin of 16.40 percent was below the state average (25.15 percent) and just below the regional figure (16.80).

Tri-State Surgical, part of Washington Health System and located in the Meadows Landing development in South Strabane Township, had $6,282,000 in patient revenue, more than $1.5 million above the statewide average and about $1.8 million over that of the region. Its operating expenses of $5,571,000 are well above the state and regional figures. Tri-State’s operating margin was 11.35 percent, well below state and regional figures.

Among the region’s 51 ASCs, Tri-State ranked eighth in patient visits.

The Peters center last year had net patient revenue of $4,401,000, below the state and regional averages. Its operating expenses were $3,871,000 – above the state and region. Its operating margin of 12.04 percent lagged in both categories.

Southwestern Pennsylvania Eye Center, on East Beau Street, had patient revenue of $4,689,000 last year, $250,000 above the regional figure and $54,000 below that of the state. Its operating expenses were $3,923,000 – about $345,000 above the statewide average and $185,000 over the region. Southwestern’s operating margin of 16.33 percent was below the Pennsylvania and Region 1 figures.

Officials from Peters Township Surgery Center and Southwestern Pennsylvania Eye Center did not immediately return phone calls.

The total margin for Pennsylvania’s 289 ASCs decreased 0.31 of a percentage point from fiscal 2016, according to the report. The average operating margin dipped 0.20 of a point.