Ambulatory Surgery Center vs. Outpatient Hospital: Uses, Benefits & More

Ambulatory surgery centers and outpatient hospitals offer surgical, diagnostic, and preventive procedures without the need for a large, traditional hospital. Both offer similar services and provide safe and effective care. However, they differ in ownership, management, and cost.

This article will describe the procedures available at these facilities and list the benefits of each location. It will also explain how the facilities differ in management and cost so that you can decide which option is best for you.

What to Know About Ambulatory Surgery Centers

Ambulatory surgery centers provide surgery without an overnight stay. They are not connected to a hospital.

How Does It Work?

Ambulatory surgery centers are small facilities offering surgical and diagnostic procedures that are typically simpler and less invasive to the person being treated. Although needing surgery can sound invasive and scary, many surgical procedures are minimally invasive and can be performed in this type of stand-alone facility.

Procedures performed in an ambulatory surgery center are notably easier to conduct in healthy patients. Some people consider ambulatory surgery centers "day surgery" centers since the procedures do not require an overnight stay in a hospital.

Examples of included procedures are: 

• Joint arthroscopy: Surgery using small incisions to insert a scope and tools
• Repair of bony fractures
• Eye surgery
• Colonoscopy: Insertion of a flexible tube with camera to check the colon
• Biopsy: Removal of a sample of tissue to analyze in the lab
• Hernia repair: Correction of a condition in which an organ or tissue protrudes through a weak spot in tissue or a muscle
• Pain-management injections

Ambulatory surgery centers are not meant for procedures that require complex surgical repair in people with multiple underlying medical problems. For instance, a partial lung removal in a person with cancer or emergency surgery for a small bowel obstruction would not be performed in an ambulatory surgery center.

A stand-alone facility is also not appropriate for surgical procedures that will require overnight care in the hospital. Instead, these centers offer elective services and are best done in patients without other complicating factors.

Furthermore, ambulatory surgery centers are not urgent care facilities, provider offices, ambulatory care centers, or rural health clinics. They are designed specifically for procedural-based care.

How Is the Facility Different?

Ambulatory surgery centers are separate from large hospitals. To maintain independent status as a stand-alone facility, an ambulatory surgery center must be financially and administratively independent from a larger hospital system and network.

Instead, ambulatory surgery centers are typically owned and managed by a private entity or group of healthcare providers. 

The type of care provided for a specific procedure in an ambulatory surgery center is the same as that provided in an outpatient hospital. Even though a stand-alone facility does not have hospital oversight, the care provided must meet the same patient care standards as any other healthcare facility, whether a large traditional hospital or an outpatient hospital.

The difference between an ambulatory surgery center and an outpatient hospital primarily comes down to the cost of care, particularly for people who do not have health insurance or those who use Medicare. 

Cost Differences

The health insurance reimbursement rates (or cost) for procedures performed in ambulatory surgical centers and outpatient hospitals are different. This difference largely stems from the formula used to determine the price of a procedure.

The cost of removing your gallbladder, for instance, differs when you use an outpatient hospital tied to a large hospital system vs. an ambulatory surgery center. This difference might seem confusing since the same procedure will be performed in both surgical facilities. However, the cost of medical care and procedures includes other, overhead expenses.

Overhead costs—ongoing expenses to run a facility, including labor, administrative costs, and materials—are much higher in a larger hospital system. Therefore, prices of procedures performed in a hospital end up being higher.

Also, a large hospital system is required to offer a more significant number and range of services. For instance, a hospital must maintain an emergency department that requires many resources. Ambulatory surgery centers are not required to maintain an emergency department.

Since ambulatory surgery centers do not need extra financial support for additional specialty services not related to surgery, insurance companies and Medicare will reimburse for the same procedure at a lower rate. 

The cost of having your gallbladder removed in a large hospital or outpatient hospital affiliated with a large hospital network is typically higher than when the procedure is performed in an ambulatory surgery center.

These cost differences will probably go unnoticed by someone with traditional health insurance. However, the differences can be more noticeable for people without insurance and those with Medicare. 

Advantages of Ambulatory Surgery Centers

There are several other advantages to ambulatory care facilities, including:

• Efficiency
• High patient satisfaction
• More personalized care
• Predictable scheduling 
  

This list of benefits has supported a trend toward increased use of ambulatory surgery centers, which are now considered the preferred location for elective surgical care.

What to Know About Outpatient Hospitals

Outpatient hospitals also offer surgery without an overnight stay, but they are part of a hospital system.

How Does It Work?

Similar to ambulatory surgery centers, outpatient hospitals also offer surgical, diagnostic, and preventive procedures, but they are owned and operated by a hospital system, not a private company or group of healthcare providers. An outpatient hospital is an extension financially and administratively of a larger hospital system.

Sometimes an outpatient hospital can appear to be a stand-alone facility. However, if it is managed financially and administratively by a hospital system, it is an outpatient hospital. 

How Is the Facility Different?

Outpatient hospitals may appear independent since they are not physically attached to a hospital, but hospital administrators manage them. Healthcare providers are not often involved in ownership and daily facility administration. 

However, all healthcare facilities are held to the same patient care standards. The type of care provided for a particular procedure in an outpatient hospital is the same as that provided in a traditional hospital or ambulatory surgery center. The difference primarily comes down to cost.

Cost Differences

Outpatient hospitals typically are more expensive than ambulatory surgery centers. Data from 2019 show that the average cost of an outpatient hospital procedure was $7,700. In contrast, the price was $3,160 in an ambulatory surgery center.

This difference is due to higher overhead costs for a larger hospital system that offers more specialty services. However, larger hospital systems also have better negotiating power with insurance companies for higher reimbursement rates since they often are the only facility that offers highly specialized care.  

For example, the larger hospital system might be the only facility that offers plastic surgery services for pediatric patients. Thus, when negotiating reimbursement rates for all surgical procedures, the hospital system can demand higher rates overall since they provide a complete package of services (e.g., pediatric plastic surgery) that ambulatory surgery centers might not offer.

Advantages of Outpatient Hospitals

The trend in health care has been moving toward ambulatory surgical care. However, some people prefer care at a facility with no potential conflict of interest for the healthcare provider. Sometimes, people question the ethics of a physician offering surgical services while profiting from the overall care at the facility.

Hospital systems primarily pay healthcare providers through a standard employment model, so there is no risk of a conflict of interest.

Which Facility Is Best for You?

Uncomplicated diagnostic and preventive procedures are best performed in an ambulatory surgery center. Somewhat complex surgical procedures in healthy people can be cheaper and more efficient in an ambulatory surgery center. 

However, people with significant medical problems, such as morbid obesity, poorly controlled diabetes, or kidney disease, often fare better having elective surgical procedures performed in a hospital setting. It is critical to speak with your healthcare provider and surgeon about the best location for your particular procedure. 

Can an Ambulatory Surgery Center and Outpatient Hospital Be Used Together?

These facilities cannot be combined. Each facility must follow strict guidelines since the procedure and patient care reimbursement rates differ.

Ambulatory surgery centers are not allowed to share space with a hospital, even for a short time. In addition, they are not allowed to share space with and be open at the same time as a healthcare provider’s office.

However, you may have some procedures performed at an ambulatory surgery center and others at an outpatient hospital. For example, your health insurance may cover a colonoscopy at an ambulatory surgery center and joint surgery at an outpatient hospital.

Summary

Ambulatory surgery centers and outpatient hospitals offer surgical, diagnostic, and preventive procedural services. However, they primarily differ in cost.

Since ambulatory surgery centers do not have to maintain highly specialized services and have weaker negotiating power with insurance companies, procedural reimbursement rates (prices) are lower. Ambulatory surgery centers offer other benefits to patients, including efficiency and predictability without risks to care.

The trend in the United States is toward ambulatory surgical care. However, people with significant complicating health factors or who require more invasive procedures might need a hospital setting instead.

A Word From Verywell

If you are unsure where to have your surgical or diagnostic procedure performed, speak to a healthcare provider. If you need an elective procedure, a healthcare provider will most likely recommend an ambulatory surgery center. These facilities offer excellent services at a reduced price.