The ambulatory surgery center industry has proliferated and profited since its inception, but the healthcare landscape is changing and profitability is no longer assured.
At the Becker's 13th Annual Spine, Orthopedic & Pain Management-Driven ASC Conference + The Future of Spine, three ASC industry leaders discussed four essential ways to ensure surgery centers remain financially viable in a session moderated by Amber McGraw Walsh, JD, a partner with McGuireWoods.
1. Know your strengths and weaknesses. Every center, and its market, is unique. "You need to understand what makes the center profitable in the first place," said Barry Tanner, CEO of Physicians Endoscopy. "Most people will say growth and volume, but as in any business, growth in and of itself is just an accelerator. It is not a profit strategy by itself. It is very important to self-assess."
Analyze your market. Consider the patient population, payer mix and physician pool. How is each of these elements changing and how does this affect the ASC? "You have to look at each business line and dissect it," said Mr. Tanner.
2. Set goals. After gaining a comprehensive understanding of what makes your center profitable and how that is affected by a shifting market, set goals that drive the ASC toward maintaining and growing that profit. "Involve your physicians and staff. If you do it at a purely administrative level you will miss out on key goal-making," said Michael Lipomi, MSHA, president and CEO of Surgical Management Professionals.
Goals to consider include:
• Creating a strategy to handle the growing patient population with high deductible health plans
• Improving efficiency throughout the center
• Physician recruitment
• Creating new, creative partnerships with payers
• Cutting costs
3. Create incentives. Goals are an important step in the process, but ASC leadership needs a roadmap for achieving those goals. This is never accomplished single-handedly. "The people who achieve goals are the housekeepers, nurses and materials managers, etc.," said Mr. Lipomi. "You have to look at proper incentives from the bottom to the top and properly align those incentives." Performance-based incentives can help propel an ASC toward and beyond financial goals.
4. Look at your vendors and purchasing strategy. Though many ASCs use strategies such as group purchasing organizations, there are typically more significant opportunities for savings: savings that go straight to the bottom line. For example, reprocessing tools can generate thousands in savings for each operating room. "Each OR represents a savings opportunity of $20,000," said Ryan Harkins, vice president of national accounts, ambulatory surgery at Mundelein, Ill.-based Medline Industries.
When it comes to vendors, regularly evalute contracts and involve the right parties. "Buy the right product for the right price," said Mr. Lipomi. "Oftentimes the person making the purchasing decision isn't the end user." Form a committee that includes a representative from every department. Meet on a regular basis to ensure the purchasing decisions make sense for how the products are being used, he said.