5 things ASCs can do to thrive in the value-based world
Ambulatory surgery centers (ASCs) have been operating in a challenging arena for years; U.S. healthcare costs continue to rise while reimbursements continue to fall. But ASCs have demonstrated an ability to control costs and save money — more than $38 billion per year according to a recent study conducted by Healthcare Bluebook™. Lower costs combined with the ability to provide high-quality patient care has allowed the number of ASCs in the U.S. to grow to rival that of hospitals. With more than 5,400 centers across the country that perform a combined 23 million surgeries each year, ASCs have become the preferred facility for many outpatient procedures.
ASCs Poised for Success
It stands to reason that while the healthcare industry heightens its focus on value-based care, ASCs are poised for success. In effect, value-based care isn’t new to ASCs that were founded on the fundamentals of providing cost-effective, quality care. What is new, however, is that value-based care is now at the forefront; patients are at the center of care and reimbursement models are increasingly focused on a triple aim — better patient experience, reduced cost and healthier populations.
The convergence of healthcare and technology is enabling the acceleration of value-based models. It’s allowing for coordinated care across the treatment continuum and better measurement of outcomes. Medicare’s Comprehensive Care for Joint Replacement program is just one example of value-based care in action. Administered by hospitals, these bundles that are currently being tested provide ASCs with a huge opportunity to participate as a preferred partner in the continuum of care.
Value-based care is here to stay. In fact, the U.S. Department of Health and Human Services (HHS) has set a goal to link 85 percent of all traditional Medicare payments to outcomes by 2016 and 90 percent by 2018. While a KPMG 2016 survey reveals that 45 percent of healthcare organizations expect a drop in profits with the move to value-based contracts, it doesn’t have to be that way for ASCs. As you begin to engage in value-based programs, broadening your perspective in a few key areas will help you to remain successful.
• Maximize revenues – To capture your share of the value-based pie while traditional reimbursements decline, you must measure what matters, know your sweet spots and build relationships.
• Control costs – New reimbursement models that are based upon value, not volume, will challenge you to find and wring out operational inefficiencies to protect profitability.
• Adopt a data-driven approach – Turning data into actionable insights for better collaboration and decision making will put you on a path to continued success, but requires a solid technology foundation.
Five Practical Tips for ASCs
So, how exactly can you position your ASC for long-term success? Here are five practical tips from SourceMed experts:
1. Optimize operational efficiency – The two biggest expenses for ASCs are staffing and the cost of medical supplies and equipment. To optimize staffing, ASCs can schedule certain procedures on specific days and often hire part-time employees and flex schedules depending on the caseload. Technology that captures patient pre-op information and schedules cases efficiently can reduce additional staffing needs and minimize turnover time between procedures. Many facilities even close one day or more each week if they don’t have a full caseload, which saves on overhead.
Technology also plays an important role in inventory management. By eliminating manual inventory management processes, ASCs benefit from lower expenses, greater operational efficiency and a healthier bottom line. “Software can enable you to closely monitor supplies — keeping inventory low, freeing up working capital, and determining the real cost of supplies,” explains Ann Geier, Chief Nursing Officer, SourceMed. “With this data in hand you can identify and capitalize on savings opportunities.”
2. Manage your success with KPIs – Key performance indicators (KPIs) remain important, telling you where you stand and where there may be breakdowns in the revenue cycle that you must work to improve. To maximize revenue, measure cash collections as a percent of net revenue every month and make sure levels remain as high as possible; days to bill should be less than five days; and less than 17 percent of invoices above 90 days is considered healthy for age of accounts receivable (AR) . Because value-based programs have different payment models, you may need to adjust some of your benchmarks.
To successfully manage your revenue cycle in this new reality you’ll need to monitor KPIs frequently and step-up reporting, with end of day reporting, weekly soft closes and a monthly score card. A greater focus on accountablity will also help you achieve your goals. Weekly revenue cycle team meetings help to engage staff in the process so they clearly understand the impact of their actions on KPIs. In addition, the ability to benchmark against other surgery centers, competitors and markets will help you know if you are getting fairly compensated, how to market yourself, and if you need to improve your operations.
3. Build a strong technology foundation – There is so much data for ASCs to collect and track — patient insurance information, claims, AR, inventory and supplies, etc. Historically, this has all been done manually. Gaining efficiency, monitoring KPIs and measuring outcomes all require easy access to operational, clinical and financial data along with the ability to analyze and share that data. This is only possible when data is stored digitally in systems that are connected and enable workflow automation.
Most ASCs don’t have dedicated technical staff or large budgets to invest in software and hardware. Walter Groszewski, SourceMed’s VP of Professional Services advises, “Take an incremental approach; first, look at your goals and what data you will need to measure and achieve them. Then, define a strategy for selecting and adding technology that will deliver the relevant information, can communicate with other solutions you already have in place, and makes the most sense based on your staff. There’s no need to make significant cash outlays. With today’s cloud-based solutions that are secure, stable and scalable you don’t have to worry about managing systems and can get going quickly.”
Interoperability is critical. In the move to an outcomes-based payment model, interoperability among providers is essential to providing better care, measuring outcomes and ultimately, getting paid. Furthermore, patients expect their data to follow them as they move through the care continuum. Open, standards-based systems can interoperate with other systems along the care continuum and allow information to safely flow between patients, providers and payers.
4. Gain insights with analytics – Analytics allow you to streamline processes, benchmark performance and dynamically make adjustments. “Even minor adjustments, like quickly identifying that a certain procedure is less profitable due to a costly supply and renegotiating or finding a less expensive vendor, can have a significant impact on your bottom line,” says Geier. In value-based programs, the ability to continuously learn, improve and adapt makes you a more responsive and reliable network partner.
Analytics can also help you find your sweet spot — the set of procedures that you perform frequently, reliably and cost-effectively – so you can make better decisions about how to market yourself to partners, payers, patients and employers. Along with this, analytics can provide greater insights into the population you serve so you can align your capabilities accordingly.
5. Engage your patients – An important shift in value-based care is that patient experience is tied to reimbursement and patients often bear greater financial responsibility. Satisfied patients are more likely to pay and become advocates for your facility. So how can you boost patient satisfaction? “The patient experience starts well before the moment the patient enters your facility and extends well after they leave,” explains Groszewski. “Engaging with patients by creating an end-to-end communication connection will build confidence, satisfaction and loyalty and, ultimately, drive profitability.”
You need to start early. Proactively communicating with patients about pre-op instructions and their financial responsibilities will put them at ease and create a smoother experience. During the visit, the patient is a captive audience so you have an opportunity to fully engage them — answering questions and reminding them of their responsibilities. Engaged patients are invested in their own care, and they perceive better care when they feel they have the information they need. Even when treatment is over, the patient experience isn’t. In addition to preventing billing surprises, post-care communication can help ensure compliance with post-treatment instructions which leads to better outcomes and reduced chance of readmission — both of which impact reimbursement under value-based programs.
Since the first freestanding center opened more than 40 years ago, ASCs have demonstrated considerable leadership and innovation in healthcare. Building on that strong foundation, every ASC needs to figure out their own path to success as value-based care continues to evolve. By keeping a close eye on changing regulations while taking steps to maximize revenues, control costs and adopt a data-driven approach, ASCs can emerge as major players in the value-based world.
This article is sponsored by SourceMed.
© Copyright ASC COMMUNICATIONS 2017. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.
- Non-Medicaid expansion states could gain up to $27.9B in savings by expanding program: 4 takeaways
- Senate committee advances vote on Trump's FDA pick Dr. Scott Gottlieb
- GI leader to know: Dr. Michael Sagatelian of Palmetto Digestive Health Specialists
- Drs. Todd Baron & Kevin Collier: 2 GI physicians in the headlines
- New Century Spine and Outpatient Surgical Institute installs Indigo-Clean disinfecting lights