8 Characteristics of Highly Successful Surgery Centers
Nap Gary, COO of Regent Surgical Health, Joe Zasa, co-founder of ASD Management, and Connie Casey, administrator of highly profitable Northpoint Surgery and Laser Center in West Palm Beach, Fla., discuss eight characteristics of highly successful surgery centers.
1. Well-organized leadership. In Mr. Gary's experience, success in surgery centers "seems to flow from outstanding leadership and outstanding administrators." He says an outstanding administrator is at once well-organized, reliable and communicative — someone who anticipates issues and isn't afraid to face them head on. For example, a successful administrator will approach the local hospital to discuss partnership strategies long before the other surgery centers in the area start thinking about joint ventures. A successful administrator will start recruiting physicians before he or she notices gaping holes in the schedule. A successful administrator will contact payors six months before the contract renewal date, to make sure negotiations aren't delayed by logistical issues on the payor's end.
Ms. Casey is a good example of a well-organized administrator: For every procedure her surgery center considers adding, she writes down every associated code and checks to see how her insurance companies reimburse for each one. "I write down every code and put it in the system, and I look to see exactly what they're going to pay for those codes side-by-side," she says. "If an insurance company isn't going to pay well, we go to them immediately and let them know we're starting new procedures and need to negotiate better rates."
2. Clear strategy around reimbursement. Mr. Gary says in his experience, the most financially successful centers are those that think carefully about their reimbursement strategy based on their market. He says there is no "one-size-fits-all" policy for ASC reimbursement. For example, while a large percentage of Medicare is generally considered risky for surgery centers, centers can make Medicare work if they rely heavily on orthopedics and other well-reimbursed specialties. "Similarly, there are specialties that don't typically get reimbursed well by commercial payors, but the right mix of them can work in particular markets," says Mr. Gary.
He says successful administrators will understand how much money they make from each payor and how their managed care contracts affect their profitability. For example, surgery center administrators should break down reimbursement rates by procedure and payor. He says the best administrators also have an "enormous bundle of tricks" when it comes to reimbursement. They have educated themselves on negotiation tactics and understand when to walk away from the table, when to accept an offer and when to end a relationship with an insurance company.
3. Physicians that "get it." Physician involvement is one of the easiest ways to improve profitability, Ms. Casey says. For example, when she realized medical supply costs were increasing, she printed out preference cards for all her orthopedic physicians and presented them at the board meeting. "One doctor would be opening two shaver tips and another would be opening one, "she says. "One would be using four anchors and one would be using two. They had absolutely no idea how much money they were spending." She says to save money, the administrator has to educate his or her physicians and get them involved in surgery center operations.
Mr. Gary says physicians that "get it" will sacrifice their own needs for the good of the center. "We have partners who say, 'Give the best [time slots] to the non-owners because we need to keep their case volume,'" he says. "The more involvement from our physicians, the better our centers are." He says surgery center administrators should involve physicians in recruitment and make sure they are recruiting more partners who are committed to the center's profitability.
4. Close contact with vendor and payor representatives. "Your [vendor] rep should be your best friend," Ms. Casey says. She says she has worked with several local vendors that give her surgery center much better pricing than the national companies because they've been working together for so long. "You need to have a relationship where you can say, 'Look, we have this case that's not going to pay us anything because the insurance company won't carve out implants. You need to give us a lower price on implants,'" she says. Form an honest, open relationship with your vendors and communicate that you will keep buying from them as long as they work to provide the best pricing for you. She says it also helps to regularly present data on the number of cases performed in the facility, so the vendors know how much work they will get out of you.
When handling payor representatives, Ms. Casey recommends providing precise detail on where the physicians will take their cases if you don't achieve better reimbursement rates. Ms. Casey gives the payor rep the physician's name and the name of the hospital that will take the cases if the surgery center can't afford to. "The payors want to know where the physician is doing the procedures, and they don't really believe you until you give them the name of the hospital," she says. "Once they have that, they come back and say, 'We'll give you a better rate.'"
5. Commitment to quality. As of Oct. 1, 2012, surgery centers will be required to report data on patient burns, falls, wrong-site/side/patient/procedure/implant, hospital admissions and transfers and prophylactic IV antiobiotic timing — with more measures to come in 2013. This industry-wide commitment to quality means that surgery centers must prioritize QI studies and physician involvement in quality initiatives. "I've never seen a successful center that didn't have outstanding commitment and follow-through with respect to quality issues," Mr. Gary says. That means isolating several quality issues at your center every year and conducting a thorough study into how your center is performing, where your weaknesses lie and how you can improve them. These results should be presented to the board and physicians to achieve involvement at every level of the ASC.
6. Active case recruitment. Ms. Casey says physician recruitment is difficult in her area because, as she puts it, "no one moves to south Florida unless their mother or their wife's mother lives here." She says instead of focusing strictly on new surgeons, her facility focuses on existing physicians and their potential to bring more cases. "We have a scheduler happy hour once every six months," she says. "That's the person who gives you those cases, who says, 'I can send this to North Point.'" She says she also makes sure to build relationships with her physicians' practices so that when a new physician joins the practice, he or she "falls into place" in the surgery center.
7. Paying attention to benchmarks. Mr. Zasa says surgery centers can excel in supply and staffing costs, efficiency and volume by operating the center to industry benchmarks. ASC administrators should have a keen awareness of where their center stands in relation to other surgery centers, both in the area and nationally. If a center is way outside the established industry benchmark, center leadership should be able to give a reason that fits with the ASC's strategy.
Mr. Zasa says that operational issues can be improved by assigning a different person to each area of the ASC. "The problem with most centers is that no one person can be an expert in risk management, financial operations, business office, managed care and clinical [issues]," he says. "If a center is safe and meeting quality criteria, assuming reasonable volume, its issue is typically weakness in management systems and execution." Assign an expert to cover each critical area of the ASC, then pay attention to internal and external benchmarks to keep every department on track.
8. Follow-through from administration. Mr. Zasa says a great administrator follows through with plans. If the center plans to recruit a new physician, the administrator follows through and works with the practice to bring new cases to the center. If the administrator has promised employees a coffee machine for the break room, he or she promptly provides one. He says the administrator should also provide "clear and concise direction" to employees on every task that needs to be accomplished.
Related Articles on Turnarounds:
10 Metrics That Reveal a Surgery Center's Financial Performance
11 Current Issues Facing Surgery Centers in 2012
16 New Statistics on Surgery Center Case Volume
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