6 Key Strategies for Profitable ASCs From Regional SurgiCenterArvind Movva, MD, CEO of Regional SurgiCenter in Moline, Ill., discusses six key strategies for ambulatory surgery centers to prosper in the wake of healthcare reform.
1. Expand size to bring in more cases. Ambulatory surgery centers can set their sights on expanding, either physically or internally, to meet the coming challenges in the healthcare market. Consider adding new services, physicians or partnerships as well as purchasing new equipment or making more room in the ASC to service additional cases. More patients coming through the door can boost revenue if the cases are profitable.
"I would say the number one thing ASCs can do in 2013 is become bigger," says Dr. Movva. "It helps with contracting to have the economies of scale, so work with your current surgeons to bring in more cases — as many cases as they can. A lot of cases done at the hospitals can be done at the ASC for lower cost and higher quality. Getting bigger allows you to lower fixed cost and spread them around to more surgeons."
Optimize room utilization at your center to make room for more cases before turning to physical building expansions.
2. Prepare for bundled payments. Bundled payment programs are becoming a reality in many communities, and ambulatory surgery centers will become a part of them in the future. Fee for service reimbursement will likely go by the wayside as government and private payors seek to lower cost of care.
"A big issue going forward this year and in the future is preparing for bundled payments," says Dr. Movva. "People are fooling themselves if they think it's not coming, especially after 2014. We previously billed and were paid on a fee for service basis and now we are being asked to share the risk. However, the real risk is that your rate won't cover your costs and the margin you expect."
Administrators and surgeons must know the cost of care for each procedure and understand how their choices — such as materials used — will impact the center. For colonoscopies at Regional SurgiCenter, Dr. Movva calculates the cost of an episode of care from the moment the patient comes in the door; he knows how many gloves his team will use, what the IV kits cost, disposables, cost of medication and staff hours.
"Once you have a cost for each different case, compare that number with the contracted rate you have with payors as well as current Medicare rates and see if you are profitable with that procedure," says Dr. Movva. "Figure out where you can cut costs and still have a good margin."
3. Maintain stable and consistent anesthesia services. Anesthesia is an important part of all cases at the ASC, and working with stable providers will enhance your success with bundled payments and accountable care organizations in the future.
"People will want the whole episode of care bundled, so for a colonoscopy we are looking at the visit 10 days before the procedure, sedation, pathology and follow up so that we control every aspect of care," says Dr. Movva. "Since we are taking on risk, the more things we are controlling in the pipeline — the more we control the margin and risk costs — the higher our profits will be."
Anesthesia can be a big issue because if services aren't stable and consistent it will be more difficult to optimize overall bundled payment costs.
4. Meet and exceed quality measures. Ambulatory surgery centers have lower complication rates than hospitals already, but staff and surgeons must continue to diligently work at infection prevention. Exceeding the norms will position your center for success in the future.
"We are entering into the age of informed consumers," says Dr. Movva. "When it comes to ASCs, we are mostly performing elective or urgent cases, which mean the patient has a chance to look around. It's important to meet and exceed quality measures and relay that information to patients."
When people connect your center with high quality and patient satisfaction, they will prefer surgery there. "The more patients who want to come to our center, the better position we have with insurance companies to get better rates," says Dr. Movva. "It really helps to have an informed consumer because they will almost always pick the ASC over the hospital for lower acuity cases."
5. Optimize online direct marketing to patients. More patients, especially patients in the younger generations, are turning to the internet for information about healthcare and medical providers. They are looking at physician and facility reviews to know about other peoples' experience.
"This has been somewhat difficult in healthcare because we've had a lot of websites without great data, but we can put our numbers out there with social media," says Dr. Movva. "We can also talk to local news outlets about our numbers. When people come in they tell me how wonderful the staff and facility is and they want to come back; now we need to get that message to them before they are making their healthcare decisions."
Let people in your community know they have an option for where their care is provided and build a relationship with referring physicians. Patients should be able to tell their primary care physician where they want their surgery and with which physician, not the other way around.
"We do a lot of things on Facebook and Pintreset and we are always speaking in the area about different issues and services we offer at our ASC," says Dr. Movva. "Quantifying the return on these investments is difficult, but we are asking people how they heard about us. Online marketing isn't expensive when you take advantage of social media and we are putting more effort there."
6. Sit at the table for ACO discussions. People across the healthcare spectrum are talking about accountable care organizations, but it's difficult to see exactly how ambulatory surgery centers will fit in the future. However, coming to the table for those discussions will ensure ASCs aren't left out of their community's network.
"I definitely believe that ASCs will have a space in the ACO market," says Dr. Movva. "ACOs are incentivized to shift cases to the lowest cost setting and improve outcomes, which is what ASCs do. Working against the ACO isn't the right attitude; the right attitude is to be in it from the beginning. Be proactive to work with hospitals who are trying to put this together."
ACOs will be different across the country depending on market needs and demands. However if the goal is to improve care and lower costs, expertise from ASC administrators and physicians who have done this for years will be appreciated.
"When cases are moved from the hospital to the ASC, we will have saved the ACO money, and that's shared savings for all," says Dr. Movva. "When you share in savings, people are much more interested in costs. Don't be the one looking in from the other side of the glass as these ACOs are built in your community."
More Articles on Surgery Centers:
30 Statistics on Surgery Center Staff Compensation
6 Ways to Slash Costs of Spine Surgery at ASCs
5 Steps to Pull Struggling Surgery Centers Out of Debt
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