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ASC Leadership — How to Hire & Retain Great Administrators

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Physician investors depend heavily on their administrators for operational leadership. The best person to keep the center running efficiently and effectively will have both clinical and business expertise, and the personality to get the job done.

Hiring the best
"Finding an administrator who has clinical and business acumen is the differentiator," Tom Jacobs, president and CEO of MedHQ said. According to Kaye-Bassman Managing Director and Partner Greg Zoch, the five most common hiring mistakes are:

•    Treating candidates like applicants — treat candidates respectfully and show personal interest in them
•    Formulating compensation plans based on previous notions of payment instead of what the administrator is worth
•    Dragging the interview process on for weeks before making a decision
•    Trying to find a "perfect" fit, thereby passing up someone who is good
•    Not communicating with the candidate within 48 hours of the interview

Mr. Zoch also recommends bringing in multiple people to interact with the candidate during the interview process and interviewing several candidates before making a selection. Qualities that make a great ASC administrator include:

•    Excellent communication skills
•    Proactive mindset
•    Attention to detail
•    ASC leadership experience
•    Strong organizational skills
•    Someone who can be a "player's coach" instead of a dictator
•    Insatiable curiosity
•    Steadfast decision maker
•    Good at hiring
•    Accessible to staff

It's also important for the administrator to treat all physicians and staff members equally. Choosing "favorite" staff members is the surest way to turn employees against them, Mr. Joseph Zasa, co-founder and managing partner with ASD Management says. If an administrator favors one nurse over another nurse and shows that favoritism, the center risks losing the unhappy nurse and creating a chasm between employees. "Great administrators are fair and equitable to all staff members," he says.

Maintaining quality people
Once the right person is hired for the job, ASCs want to retain this person. Administrator turnover can be costly and cause turmoil among the staff. To retain a great ASC administrator, compensation and bonus packages must be competitive. Mr. Jacobs said compensation for administrators also depends on several factors, such as size of the ASC (number of operating rooms), single versus multispecialty and whether the ASC has a management company or hospital partner. He has seen compensation anywhere between $100,000 and $200,000.

Based on the VMG Health 2011 Multi-Specialty Intellimarker Survey, a few benchmarks for ASCs administrator compensation include:

Based on location
West United States: $114,109
Southwest United States: $100,779
Midwest United States: $104,372
Southeast United States: $110,311
Northeast United States: $109,268

Based on size
1-2 operating rooms: $95,750
3-4 operating rooms: $106,271
More than four operating rooms: $109,286

Based on case volume
Less than 3,000 annual cases: $101,850
3,000-5,999 annual cases: $104,998
More than 5,999 annual cases: $109,448

Based on net revenue
Less than $4.5m annually: $100,942
$4.5m-$6.99m annually: $105,942
More than $6.99m annually: $113,100

Bonuses can reward and incentivize great administrators to continue their great work. Senior Vice President of Operations at Regent Surgical Health Tim Bogardus outlines a few options for surgery center administrator bonuses:

•    Bonus payment based on the center's profitability; if the physicians receive distributions, the administrator gets a bonus as a percentage of base pay
•    Giving administrators a small percentage of distribution
•    Project-based bonus payments given if the administrator completes projects and meets expectations over a set period of time
•    A mix between center profitability and project-based incentives

"I think all surgery center bonus programs should start off with a measure of profitability," says Mr. Bogardus. "A common yardstick for ASCs has been EBIDTA of the center; you can give bonuses based on EBIDTA increase or reaching another target metric. I think at least half of the bonus should be based on profitability, but there are a lot of things that are out of the administrator's control, so the other half can be based on projects the administrator can control whether they are implemented or not."

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