Capital One's Erik Tellefson told HIMSSCast the inpatient-only list “is set to go entirely by 2029,” and that hospitals charge 50%+ more than ambulatory surgery centers for the same procedure. Ten years of Medicare data says the volume really is leaving the inpatient bed. It mostly isn't going where you'd think.
The pitch is clean and it's mostly true. Medicare has spent a decade pulling procedures off the inpatient-only list. Each one it releases can be done in a lower-cost setting. Capital is piling into ambulatory surgery centers on exactly that thesis, and the 2029 date gives it a deadline.
Below is where every standardized Medicare fee-for-service dollar actually went, 2014 through 2023 — the three settings the argument is about. Standardized means CMS has already stripped out geographic wage adjustments, so a movement in these lines is a movement in care, not in local prices.
Leave it on share of the Medicare dollar and the ASC line is a hairline crawling along the floor. Inpatient gave up 5.0 percentage points of standardized spending between 2014 and 2023 — 28.5% down to 23.5%. ASCs absorbed 0.6 of them. Hospital outpatient departments took 5.0.
Now switch to indexed to 2014 = 100. Same numbers, and the ASC line is suddenly the fastest-growing thing on the page: +61% against outpatient's +35% and inpatient's −18%.
Neither view is a lie. One of them is the market you can raise money on. The other is the market that exists.
The procedures are leaving the inpatient bed. They are landing, overwhelmingly, in the hospital outpatient department — the same building, the same brand, the same chargemaster, one floor down. Which is precisely the outcome the 50% price gap is supposed to prevent.
Each dot is one state: ambulatory surgery events per 1,000 fee-for-service beneficiaries. Drag the year. Nothing about this looks like a single trend everyone is riding.
In 2023 Mississippi ran 332 ASC events per 1,000 beneficiaries. Vermont ran 43. That is a 7.7× spread inside one payment system, and it does not track illness — Mississippi and Vermont are not seven times apart on anything clinical. It tracks certificate-of-need law, physician ownership rules, and where somebody built a building. The median state sits at 164.
If you are building for the ASC market, your addressable market is a state-by-state map, not a national curve. Start with the twelve states above 220 events per 1,000 in 2023 — Mississippi, Maryland, Arizona, Georgia, Delaware, Florida, Colorado, Nevada, Wyoming, New Jersey, Arkansas and Tennessee. The bottom ten will not look like those for years, and some of them are legally prevented from ever getting there.
Tellefson's 50%+ price gap is real and it is not evidence of ASC efficiency on its own. ASCs choose their patients. They screen out the comorbid, the frail, the anticoagulated and the anyone-who-might-need-an-ICU. Hospitals take those cases because they must. Comparing the two prices for “the same procedure” silently compares two different populations having it.
Asked twice on the episode what drives the differential, he deferred to an absent colleague.