4 Great Opportunities for Trimming the Fat at ASCs
Gone are the golden days of huge contract wins and physicians knocking down the doors. In days of dwindling reimbursement, cost increases and stiff competition we owe it to our partners to be vigilant in monitoring every aspect of cost containment and to be able to think outside the box to find different ways to approach managing the bottom line.
1. Labor management. As a center's biggest expense, we all know labor efficiency is fluid; it's not easy to find the right mix. The director of nursing may say to you that you need "X" number of staff but at the same time there appears to be so much staff they're running into each other. How do you find the right balance? Labor and staffing warrant being reviewed often and then again. You may assume you have tried everything, having maximized any and all opportunities. Think outside the box, i.e., are there different ways to handle that hour every third Wednesday when you are slammed?
a. Set a "worked hours per case" goal and manage to it. Review quarterly and adjust. Know the difference of having long orthopedic cases vs. ophthalmology. Make the staff aware of the goal.
b. Be conversant with flex scheduling. Flex scheduling is an art of fine tuning and balance. Sometimes we get it right, sometimes we don't. The key is understanding what you are trying to do.
c. Utilize prn/pool and part time staff as much as possible while keeping efficiency and consistency.
d. Optimize the team; if you have strong leaders rely on them. Know and develop each staff members' strengths. Use those strengths to the center's advantage.
e. Schedule staff as the OR schedule dictates. Keep abreast of the schedule; it may change many times during the day. You want to be accurately staffed for the day and not have a team that came in for a case that cancelled yesterday.
f. No idle time. If there's nothing to do, the reality is, it's time to go home.
g. Network. Someone down the street may have a great idea.
h. Share staff. If you have multiple centers in a geographical area, develop a float pool. Hire staff that is willing to float to different centers. This can be very helpful when centers have different days of the week in which they are busy.
i. Having a volunteer help in the waiting room of a busy center can be invaluable. They can keep families abreast of what's going on with a lengthy case, notify family when the case is over and keep the waiting room tidied. All of these are things that can eat up expensive labor hours.
2. Turnover – Some centers do this well, frankly some are very bad at it. Money is left on the table by having slow turnover; fewer cases can be scheduled, there is idle staff time and there is often physician and patient dissatisfaction with the wait. Steps to improve include:
a. Visit a center that is efficient in turnovers. You will pick up many tips.
b. Do you need additional staff? It could be a nursing assistant or environmental aid who could go from room to room that makes the difference.
c. Hold a contest within your center or with another center. Let the staff be in charge and have fun with it. Competition can be good.
d. Make this a PI project getting the whole team involved. Use the data to show improvement reporting up to the Governing Board.
3. Implants and vendors. If your center does any orthopedics, podiatry and/or pain management you know the amount of money you pay for implants; a screw you can buy at Home Depot for $10 can cost $900 once it walks into the surgery center! While we can't change that, what can we do? Let's look at a few things that can be done at the center level to leverage better pricing on implants.
a. Have the data. Case costing can be a manual, labor intensive task if you don't have electronic means to do it but is a necessity. You need to regulate the cases you are doing at your center and at the same time you and the physicians need to know what you are spending. Who are the most cost effective surgeons and who are the outliers? Know what the implants cost, know alternatives, post the data, present it at a partnership meeting and get the conversations going. Sit back, it can get interesting. No partner wants to be "that guy." You may hear, "I didn't know you could use that; I've been doing the same thing since training."
b. Get your surgeons on board. Now that you have their attention, use it. If you are going to tackle the issue of decreasing implant costs at the center, you want and need your surgeons' support. They, and thus you, will be most influential with vendors if you present a united front.
c. Put an internal "cap" on implants. The center will only pay "X" amount for a particular implant. Have a specific fee allotted for a specific case, i.e., all implants and disposables for an ACL will not exceed a certain figure. Any vendor can provide their services if they are at or under the predetermined fee. Agree not to bring in a more expensive implant "just because."
d. Implants are often reimbursed but the disposables such as drills, guide rods, and cannulae are not. Disposables need to be bundled into the cost of implants by the vendor so that the predetermined fee for implant includes all appropriate equipment for the case, disposable and non-disposable. Don't let the vendor get away with tacking on the disposable charge.
e. Limit the number of vendors, going to one if possible. This is not always a reality but try to get a consensus amongst your surgeons.
f. Negotiate volume deals with vendors; the more of their implants you use the more of a discount the center receives.
g. Rebates. While I'd prefer the savings up front some vendors like to work with rebates. Maximize rebates as much as possible.
h. Implant committee. If a surgeon wants to bring in a new/different implant, he/she has to justify its use and get approval from the committee. Put them on the spot to defend its use.
i. Reprocessing. Reprocessing has been around for a long time. In the orthopedic world it has the potential for a large cost savings for the center. You may have to "sell" the idea to your surgeons. There is a vast amount of supportive data regarding the safety of reprocessing when using a reputable company. Reps from the company will be more than happy to attend a partner meeting and a staff meeting to explain the process and answer questions. You may want to have hesitant physicians speak with a physician that has used reprocessed equipment and can speak to its efficacy.
j. Purchase implants directly from the supplier. This circumvents the distributor and the rep. How many surgeons actually need the reps present at the case? Is it really necessary for them to stand there to open boxes? This is a potential new source of savings that warrants further investigation.
4. On time starts. Physicians late for their start time is poorly addressed at most centers. While there are many legitimate reasons for a surgeon to be late, many centers have habitual offenders. Valuable dollars are wasted while the staff, anesthesia, patient, family and sometimes vendors wait. This can snowball into a horrendous day affecting multiple surgeons and patients.
a. Review your policy. Do you have a policy? If so, what does your policy say regarding tardiness? Does it need to be revised?
b. Have a frank discussion with the surgeon utilizing data regarding his timeliness. Offer to change the start time or find a better day or time for him.
c. Utilize the medical director and/or other key partners. Peer to peer discussions may be helpful.
d. If there continues to be an issue you may need to involve Medical Executive Committee and the Governing Board.
In our ever changing world we must be constantly ready to evaluate and reevaluate what we are doing and how we are responding to the curve balls thrown to us. What worked yesterday won't work tomorrow as the playing field changes. New ideas such as purchasing implants directly from the supplier need to be explored. I am excited for the challenge and look forward to seeing what is next on the horizon. What will the new lean, fit center look like with the excess fit trimmed away?
This article was written by Pat Jepsen RN MBA CASC, Director of Operations at Surgical Management Professionals.
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5 Solutions to Generate Improved ASC Cash Flow
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