5 Steps for Optimizing Key ASC Benchmarks
"You don't manage a surgery center through a spreadsheet," says Joseph Zasa, JD, co-founder and managing partner of ASD Management. "You use a spreadsheet to identify areas that need to be improved and you use it as a diagnostic tool to show what areas may require attention. "
When it's done right, benchmarking against yourself can give you invaluable insight for the future. "Trending where the facility is by itself gives you a clearer indication of something that might be a positive or negative trend," says Steve Whitmore. "If it's negative, administrators should investigate and correct that situation."
Here, industry experts discuss how surgery center administrators can apply benchmarking data most effectively for full process and system improvement.
1. Pick the most important metrics for your center's improvement. ASC administrators are faced with a barrage of benchmarks on a daily basis and are constantly examining data points in different ways. "I walk into centers and they are looking at 85 different metrics," says John R. Seitz, president and CEO of ManageMyASC, and Tamar Glaser, RN, of ManageMyASC.com. "They cover so many things that nobody pays attention to any of them. Administrators need to pick the ones that are most important and solve those issues immediately."
Examine the different metrics you collect and choose which ones are most urgent for the center to address. For example, tracking income per minute is largely useless because of the surgery center's economy of sale. "ASCs have fixed costs and if you can get over that hurdle you can really change things," says Mr. Zasa. "The first thing to look at is the number of cases performed at the center because a lot of data is case-driven."
In addition to case volume statistics, the other key area is collections. Track your revenue cycle in its most basic form to see how many dollars you collect. "Without case volume and collections, you don't have a successful center," says Mr. Seitz. "Find what matters for you and focus on those metrics. It might be case start times, cases per day or overtime hours."
When choosing your areas for improvement, make sure they are appropriate for measuring. "We believe strongly that if it's important, you have to measure it," says Jeff Leland, CEO of Blue Chip Surgical Partners. "Identify the half-dozen benchmarks that you really want to keep track of. The most important thing is to measure them."
2. Pay most attention to benchmarks from similar centers. It's important to know the national benchmarks for surgery centers, but it doesn't make sense to compare dissimilar centers. For example, ASCs doing 100 cases per month will have a different per patient data than centers doing 1,000 cases per month. "Benchmark yourself against similar centers with similar case volume and specialties," says Mr. Zasa. "Focus on getting really good benchmark data to see how you are doing. There are only a handful of key statistics that really matter."
The most important statistics to have a bearing on the success of a surgery center are:
• Gross billings: whether your fee schedule is on track, too high or too low. "Make sure the fee schedule is right because that's how insurance companies pay you," says Mr. Zasa. "If your gross charges are off, you are leaving money on the table. Adjust the fee schedule so it's higher per month."
• Revenue per patient: the average revenue generated per patient. "This is absolutely critical and based on the kinds of cases you do and your payor mix," says Mr. Zasa. "If the revenue is bad, you aren't collecting right or you have bad contracts. Make sure you don't have a systematic problem. There are 12 key processes to run in surgery centers; make sure all yours are running properly."
• Hours per patient: the number of hours spent on each patient. "For plastic surgery it's going to be high; for endoscopy it's going to be lower," says Mr. Zasa. "Make sure you are benchmarking with your peers and really focusing on benchmarking around your case mix. Patient safety is paramount, but in our experience the best run and most efficient centers score high in patient safety and staffing benchmarks. They are not mutually exclusive."
• Supply costs per patient: the average cost of supplies for each patient. "This is specialty mix driven; orthopedics will be higher and GI and pain management will be lower," says Mr. Zasa.
• Accounts receivable days: the number of days it takes to collect on accounts receivable. Measuring this statistic properly tells you if you have an A/R problem. If you suspect that you do, you must look at your internal systems that include timing of billing, post surgery collections and follow up, prior to surgery collections of copays and deductibles, follow up on denials. Alternately, it can be issues with insurance companies. Use the statistic to dig deep and find out what is really occurring," says Mr. Zasa.
There are plenty of national benchmarks for surgery centers, but administrators may need to pay for more regional or specialized statistics. "It's always helpful to benchmark against regional numbers if you can get your hands on them," says Steve Whitmore.
3. Have a clear goal to reach. Once you've selected a few key metrics and benchmarked your center against other similar centers, define a clear pathway for your center to meet that goal, says Mr. Seitz.
For example, if you want to reduce costs associated with overtime, make the rule that employees can't take more than 30 hours of overtime per pay period. If you are trying to up your collects, set a goal of $830,000 per month. If you want to increase case volume, define a goal of 550 cases per month, depending on your center.
"If you have cases running late, you should look at causes such as room turnover time or physicians arriving late for the procedure or the prior case just took more time to complete," says Mr. Whitmore. "These factors affect nursing hours per case which correlates to financial benchmarks being missed"
4. Decide how often to track your progress. Once a goal is set, make sure you are tracking your progress regularly. By the end of the month, you should have a good idea about whether your center is on target to meet your goals or not. "Most people wait until the month is over before figuring out whether they've met their goals," says Mr. Seitz. "Instead, track your progress at regular intervals."
For example, if the goal is to collect $830,000 for the month, check your progress on the 15th of every month. At that point, you should have collected at least $400,000. If you aren't on track to fulfill your monthly goal, take action to change that before the month is over.
"Go back through and communicate where you are so the problem can be fixed," says Mr. Seitz. "If your goal is a collection goal, meet with the billing people and see where you need the money to come in."
5. Communicate whether you are meeting your goals effectively. Make sure you are sharing benchmarking data and goals with the right people so improvements will be made.
"If you are measuring collections per day, you should be sharing that information with people who are actually doing the collections," says Mr. Seitz. "If you are measuring cases, you should be sharing that with the physicians. For every metric, decide who you need to share it with so they can buy into it and improve it. It doesn't do any good to collect this information and share it only with the board."
Once the strategic goals are in place, communicate progress to employees on a daily, weekly or monthly basis. "Post results on the bulletin board, have a company meeting or publish it in the newsletter," says Mr. Setiz. "Have a plan for how you are going to communicate. I am currently tracking overtime at a surgery center every day. If they know I'm tracking every day they'll make sure to reduce that number."
When you share your results, you can also show employees how you measure up. "We share our benchmarking data with everyone and try to monitor our performance," says Mr. Leland. "Further we base compensation to some extent on how well the surgery center compared against the benchmarks."
More Articles on ASC Benchmarks:
3 Core Benchmarks for Every Surgery Center
40 Statistics on Surgery Center Staffing Costs
4 Areas for Successful ASCs to Benchmark Daily
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