4 Ways to Maximize the Cost and Space Efficiency in Your ASC
Marisa Manley, president of Healthcare Real Estate Advisors, discusses four important ways to assess spatial efficiency in ASCs and use that data to lower costs.
1. Lower the facility's electricity costs. Ms. Manley says that ASCs should look first at how they buy electricity. Centers can often reexamine their energy contracts to determine if a different supplier would offer electricity at a lower rate. "Many states have deregulated, and people now have a choice of suppliers," she says. "We regularly see 10 percent reductions in the supply costs."
It is also important to consider how electricity in the facility is used. One of the simplest ways to save money, for example, is to switch to energy-saving lights throughout the ASC. Local utility companies may offer rebates or assistance with the process, Ms. Manley says, and facilities can often expect to see paybacks in less than 18 months. Another tactic is to install motion sensors throughout the ASC in rooms that are not being used throughout the day. "These should be used in any room where people are frequently going in and out," Ms. Manley says. "If somebody is not active in the room, the lights will go go off. This will lead to a significant cost reduction for the facility."
2. Convert extra space to revenue-producing rooms. ASC waiting rooms may be larger than needed, particularly if the ASC has moved to new technology and uses a kiosk or scanners for rapid check-in, says Ms. Manley. ASCs should evaluate their waiting areas to determine if extra space can be converted to an exam room or another revenue-producing room. "The goal is to get people out of the waiting room and into triage or exam area, which tends to be an area where you're producing revenue," she says. In addition to waiting rooms, Ms. Manley says that many ASCs have been left with empty space after transitioning from paper to electronic health records. This is another key opportunity for centers to convert inefficient, excess space into a revenue-producing area.
In Ms. Manley's experience, many practices equate shorter time in the waiting room with higher levels of patient satisfaction. "If you can create a situation where you have more exam rooms and more of the areas where the service is being delivered, you have the opportunity to create more satisfaction and more revenue," she says.
3. Lower real estate taxes. Real estate tax assessments are high in many parts of the country, and ASCs can attempt to lower them regardless of whether they lease or own their facilities, says Ms. Manley. For individuals who own their facilities, Ms. Manley recommends hiring a local practitioner who specializes in challenging real estate tax bills. "There are a very limited number of ways in which you can challenge a tax bill, but this is the type of economy in which it would be appropriate to do that," she says. "These professionals are paid only for the reductions they achieve, so [challenging a real estate tax bill] can be very worthwhile for people who own their facilities."
Those who lease their facilities can also explore options for lowering real estate taxes by ensuring that they collect all appropriate refunds from the landlord. "If you're a tenant, have your operating expenses been calculated correctly?" says Ms. Manley. "Has your landlord received tax refunds that have not been passed on to you?" In most jurisdictions, it is possible to obtain a tax history as a public record through the local fiscal office, Ms. Manley says. It can then be determined whether the city has made property tax refunds to the landlord and whether or not they are applicable to the ASC.
4. Lease space in the ASC. ASCs with spare exam rooms or procedure rooms may explore two options for leasing the space, says Ms. Manley. One option is to create a physically separate suite that another physician can occupy, leading to payback over time, she says. Another approach Ms. Manley has seen is to bring in a complementary specialty that is applicable to current patients. For example, Ms. Manley says, an OB/GYN practice can bring in a nutrition specialist who uses an office and several consultation rooms for three days per week. "In this case, you reduce costs by creating a revenue stream without incurring a capital expenditure," she says.
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