This document summarizes ambulatory care in the US healthcare system. It discusses how ambulatory care centers provide non-emergency care on an outpatient basis and have grown significantly since the 1970s. The Affordable Care Act has further increased demand for ambulatory care by focusing on prevention, coordinated care, and efficiency. The document outlines the historical development of ambulatory care, current models, political influences, quality and safety issues, and future challenges around continued growth and ensuring financial viability under new payment systems.

1. Running head: AMBULATORY CARE IN THE US HEALTHCARE SYSTEM
Ambulatory Care in the US Healthcare System
Ricci M. Hayes
HCM310 – Introduction to the U.S. Healthcare System
Colorado State University – Global Campus
Dr. Dawn Tessner
June 28, 2015

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Introduction to Ambulatory Care
Ambulatory care centers, according to Sultz and Young (2014) are those “…that do not
require over-night hospitalization,” (p.163, para.1). They should not be considered facilities of
‘lesser-than-hospital’ care, but rather the primary delivery source of health maintenance and
disease prevention, non-emergent intervention and treatment, often a more cost effective model
of care for patients – the cost of surgeries at ambulatory surgery centers (ASCs) is roughly 42%
less than those performed in the hospital setting (CSU-Global, 2015a). The stress on prevention
and coordinated care under the Affordable Care Act (ACA) has created a boon to ambulatory
care delivery, resulting in better outcomes, greater access to care, improved patient satisfaction,
and a noticeable shift “…from hospitals to expanded use of ambulatory care services,” (Sultz &
Young, 2014, p.199, para.2). Ambulatory care centers are in the position to demonstrate
practices that are in line with the ACA, especially those related to coordinated care, prevention,
and efficient delivery.
Historical Development
The 1970s birthed an expansion of ambulatory clinics (CSU-Global, 2015b). In 1972, Dr.
Copland was a nephrologist at Stanford and recognized that patients had to travel from extended
distances for life preserving dialysis treatment. Compelled to make dialysis more accessible for
this chronic/terminal population, he raised funds and opened not-for-profit (NFP), freestanding
dialysis clinics which were community based, with the ideal to provide optimum, affordable,
accessible treatment. Today, Satellite Healthcare continues to operate as NFP (Satellite
Healthcare, 2015).
Hospitals, in the 1980s, opened freestanding clinics too, in order to meet convenience
demands of healthcare consumers, as well as to expand to the larger community in order to

3. AMBULATORY CARE IN THE US HEALTHCARE SYSTEM 3
compete (Sultz & Young, 2014). Insurers recognized the preferential cost of outpatient
treatment; that, along with the convenience and service offered in ambulatory setting, led to
increased growth in the 1990s of the ambulatory market to include, “…cancer treatment,
diagnostic imaging…dialysis, pain management, physical therapy, cardiac and other types of
rehabilitation, outpatient surgery, occupational health, women’s health, and wound care,” (Sultz
& Young, 2014). Since the 1970s, ambulatory care visits are about 34 million (CSU-Global,
2015).
Current Role in Healthcare Delivery
Historically, outpatient hospital clinics (or ambulatory extensions of hospitals) employed
the lowest ranking of physicians, those who worked in urban centers in hopes of gaining hospital
privileges (Sultz & Young, 2014). However, hospitals now depend on the revenue from these
extensions; Sultz & Young state that the “…outpatient share of total hospital revenue [reached]
42% in 2010,” (p.179, para.1) up from 23% in 1990. Freestanding, non-hospital based clinics
have exploded as well. As the ACA puts greater demand on hospitals and providers to show
continuity of care and a more efficient delivery model, ambulatory care centers are in the best
position to control costs: “Preventable hospitalizations were found to be associated with the
availability of ambulatory care clinics,” (Richard, West, Shin, Younis, & Rosenbaum, 2014,
p.273, para.1).
Today, ambulatory health clinics have grown to include:
 Integrated Health Models
 Patient-Centered Medical Homes
 Accountable Care Organizations (ACOs)
 Urgent Care Centers

4. AMBULATORY CARE IN THE US HEALTHCARE SYSTEM 4
 Retail Clinics
 Ambulatory Surgery Centers
 Community Health Centers
 Cancer Treatment Facilities
 Dialysis Clinics
…and much more (Sultz & Young, 2014). Reimbursement for treatments and services is
changing under ACA from fee-for-service to health maintenance, and it is imperative that these
ambulatory service providers understand that to maximize revenue and remain financially
solvent (whether NFP or otherwise), they must provide data reflecting quality performance.
Political Influence
Prior to establishment of ACA, strong political lobbies such as the American Medical
Association (AMA) have influence the progression and growth of ambulatory care. When
physicians sought to align with hospitals, or physician networks in the 1930s, they were in
essence blacklisted by the AMA, were “…socially ostracized and denied hospital privileges,”
(Sultz & Young, 2014, p.169, para.1). ‘Bundled care’ in dialysis was intended to make the
dialysis outpatient clinics responsible for all dialysis related care, including medications
delivered in the clinic, as well as those that patients take at home. DaVita and Fresenius, the two
largest dialysis providers, have lobbies in place to fight such legislation, for good reason:
pharmaceuticals required with long patents, without cost regulation, could cripple the dialysis
outpatient industry. Some of the ‘bundle’ legislation has been delayed because of their political
lobbying efforts (Kuscher, 2013).
Quality, Safety, and Competition

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Ambulatory surgery centers (ASCs) have tripled their procedures in the past two decades
(Sultz & Young, 2014; Frellick, 2014). Though generally considered safer and less expensive
(CSU Global, 2015), there are some concerns about the statistics collected one-week post
procedure. Frellick (2014) details a study showing that, “… at 7 days, the rate for hospital-based
acute care among patients discharged home was 31.8/1000 discharges,” (para.2), a great variant
from the oft reported 1.1/1000 hospital admission rate post ambulatory procedure. The Medscape
article (Frellick, 2014) records dissenting voices, those who believe the 7 day measure is too
severe. But with ACA, if preventative care and health maintenance are key, 7 days, 15 days, all
of it is relevant, and providers are responsible for addressing and tracking the reasons for hospital
admission post ambulatory surgery, or else they risk suffering diminished reimbursement.
Measuring quality under ACA has proved challenging as states grapple with non-
standard models while providers work to transition from fee-for-service to quality-measured-
reimbursement. The National Committee for Quality Assurance (NCQA) “…has begun
testing…performance measures that include experience with care, functional status, quality of
life, and health outcomes,” (Lind, 2013, p.55, para.3). CMS is interested in stakeholder feedback
and has contracted “…with researchers to test new measures of provider and care continuity, as
well as experience of care,” (Lind, 2013, p.55, para.6). Care coordination measures, cost savings
and outcomes, will have to be proven in order for ambulatory care providers to maximize
revenue under ACA (Lind, 2013).
California, under the NCQA, has developed the Healthcare Effectiveness Data and
Information Set (HEDIS) and is recognized for performance transparency and quality
improvement measures within state funded systems (CDHC, 2013). The state measures hospital

6. AMBULATORY CARE IN THE US HEALTHCARE SYSTEM 6
readmissions, among many other markers, in order to identify risks, trends, and improvements in
healthcare delivery for Medi-caid funded patients.
In order to remain competitive, ambulatory centers have to consider their roles in
preventative and integrated care models. “Some organizations are taking integration steps that
focus on outreach. They are expanding patient access to ambulatory care services or
telemedicine, or are bolstering outreach through investments in IT that can expand services and
service areas,” (Rose, 2013, p.32, para.4). Healthcare companies are merging to meet the quality
and health maintenance mandates of ACA: About Tenet’s merger with USPI, CEO Fetter said,
“The partnership…expand(s) our ambulatory service offerings to meet growing consumer
demand for services that are provided in a lower cost, more convenient setting and that are
aligned with the long-term transition to value-based care,” (Japsen, 2015, para. 5). DaVita
Dialysis acquired Healthcare Partners for similar purpose. DaVita provided kidney care, but with
the push toward integrated, more vertical care components, Healthcare Partners, a successful
ACO, is the bridge they needed to remain solvent in an unknown market (Kuscher, 2013).
Future Challenges and Issues
Ambulatory care, though arguably more efficient, with better access and adequate
delivery of services to larger populations, is not without challenges. In dialysis, costs for care
delivery to the chronic kidney disease (CKD) group of patients is on the rise, while
reimbursement from Medicare continues to dwindle. “Medicare spends $87 billion annually to
care for patients with kidney disease, with $58 billion spent on individuals with CKD stages 1-
4…[and is] 2-7X higher than spending on the average Medicare beneficiary,” (National Kidney
Foundation, 2015, para.4). With ACA is place, who is responsible for this chronic demographic:
primary care physicians or chronic outpatient dialysis providers?

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Recommendations
The NKF is proposing that dialysis companies provide more preventative care for
patients with CKD (chronic kidney disease) stages 1-4 (National Kidney Foundation, 2015). In
the current model, dialysis companies provide services once a patient is at CKD stage 5, or end-
stage-renal-disease (ESRD) relegating patients to a life on dialysis, or as a renal transplant
recipient. DaVita has a head start with one of their smaller companies providing early education
for CKD patients. However, there is a continuity problem: in order for dialysis companies to
provide education – and not merely screen for future patients – there has to be communication
initiated by the nephrologists or primary care physicians.
Nurse coordinators can provide such communication. Haas and Swan acknowledge that
“…care coordination is a major factor in the work of ambulatory nurses, and that marker
activities include long-term supportive relationship, act as a resource person, coordinate client
care, assess needs and initiate referrals, find resources in the community, and instruct on health
promotion,” (2014, p.72, para.6). Nurses’ education and expertise includes the promotion of
health, patient centered care delivery, and case management.
To further address the disparity of care delivery, communities should consider expanding
resources via community health centers. They are shown to reduce ER visits, as well as hospital
readmissions (Richard, West, Shin, Younis, & Rosenbaum, 2014)
Conclusion
Ambulatory care centers are positioned to meet the mandates of the Affordable care act
by delivery safe, quality, and efficient care by coordinating services. The number of ambulatory
centers is on the rise, and with the shift to quality reimbursement from fee-for-service, it’s
important that standard measures of quality are in place to keep ambulatory centers solvent.

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References
California Department of Health Care Services. (2013). 2013 HEDIS® Aggregate report for the
Medi-Cal managed care program. Retrieved from
http://www.dhcs.ca.gov/dataandstats/reports/Documents/MMCD_Qual_Rpts/HEDIS_
Reports/CA2013_HEDIS_Aggregate_Report.pdf
Colorado State University-Global Campus. (2015). Module 3 – Ambulatory Care
[Schoology ecourse]. In HCM 310 – Introduction to the U.S. healthcare system.
Greenwood Village, CO: Author.
Frellick, M. (2014, May 01). Hospital care after outpatient surgery more common than expected.
Medscape Medical News. Retrieved from http://www.medscape.com/viewarticle/824430
Haas, S. & Swan, B. (2014). Developing the value proposition for the role of the registered nurse
in care coordination and transition management in ambulatory care settings. Nursing
Economic$, 32(2), 70-79.
Japsen, B. (2015, March 03). As value-based care spreads, Tenet Healthcare spends $2B on
outpatient surgery. Forbes. Retrieved from
http://www.forbes.com/sites/brucejapsen/2015/03/23/as-value-based-care-spreads-tenet-
spends-2b-on-outpatient-surgery/
Kuscher, B. (2013, September 14). Out of their comfort zone: Dialysis provider DaVita needs to
integrate big physician practice to move toward integrated care. Modern Healthcare.
Retrieved from
http://www.modernhealthcare.com/article/20130914/MAGAZINE/309149991
Lind, A. (2013). Coming to consensus: Developing an approach to measuring quality of
integrated care programs. Generations, 37(2), 54-61.

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National Kidney Foundation. (2015, June 23). National Kidney Foundation proposes new
Medicare payment system to improve care for kidney patients. Retrieved from
https://www.kidney.org/news/national-kidney-foundation-proposes-new-medicare-
payment-system-improve-care-kidney-patients
Richard, P., West, K, Shin, P, Younis, M., & Rosenbaum, S. (2014). Community health centers
cost savings: Ambulatory care patients in North Carolina. Journal of Public Budgeting,
Accounting & Financial Management, 26(2), 271-291.
Rose, S. (2013, November). Staying competitive in the new environment. hfm (Healthcare
Financial Management), 67(11), 32-32.
Satellite Healthcare. (2015). About Satellite Healthcare. Retrieved from
http://www.satellitehealth.com/about_satellite/about_satellite_healthcare/index.php
Sultz, H. & Young, K. (2014). Health care USA: Understanding its organization and delivery
(8th edition). Burlington, MA: Jones & Bartlett Learning, LLC.