10 Steps to Immediately Improve ASC Profits
Robert Westergard, CPA, chief financial officer; Margaret Chappell, RN, senior vice president of operations; and Ann Geier, RN, senior vice president of operations, gave a presentation titled, "Cost Reduction and Benchmarking: 10 Key Steps to Immediately Improve Profits."
Here are the 10 keys the ASCOA team delved into during the presentation.
1. Managing the evolving workplace. Figure out what your workforce generational mix is and where they fit into rewards. Traditional employees, baby boomers, generation X and millennials all have different expectations and incentives for their work, Ms. Chappell said. Find commonalities and communicate with them.
2. Managing change. Find someone to spearhead change at your facility and convert more reluctant employees to buy into center changes. Create dialogue and change the ladder of inference — that is, don't assume any person's beliefs or reactions without first communicating with them. "To get to your goal, you want to make sure you have complete information," Ms. Chappell said. "Don't get into a contest of wills."
3. Materials management. Pay close attention to what you're spending money on, Ms. Geier said, and use a software inventory module for the center. Assign one person to enter data to avoid any labeling inconsistencies. Also, centers should limit their inventory on hand and only have enough supplies to work for the week ahead.
4. Case costing. Ms. Geier recommends taking every CPT code performed in the center every month and breaking down the cost per case, per surgeon. Also break CPTs down per payer. The case costing list can show if there are large discrepancies among surgeons performing the same procedure, if a CPT is profitable and if payer contracts are worth maintaining.
5. Recruiting new physicians. Never stop recruiting new physicians, Ms. Geier said. She encourages centers to allow surgeons a trial where they can perform a case in the center and meet the top managers.
6. Staffing. Use a small core of fulltime staff members and supplement with part time and per diem. "Don't guarantee any hours in interviews," Ms. Geier says. "You can use per diem as a trial to get hired full time. The perception is that a surgery center is easier to work in than a hospital. Those people usually don't last long during the trial because of our pace." Also, work to help staff members out with their schedules and put them in roles that will increase their job satisfaction.
7. Schedule compression. Compression scheduling can save a center money and increase its efficiency, but physicians must know what the schedulers are doing and buy into the concept. "We will move cases if we don't have at least six in one day," Ms. Geier says. She recommends discussing scheduling at every board meeting and being especially considerate of anesthesia providers to maintain a positive relationship.
8. Financial management. At some level, all surgery center administrators need to be financial managers, Mr. Westergard said. One crucial part of materials management is generating daily, weekly, monthly and annual reports for maximum financial oversight. Reports can include charges, payments, A/R days and balances, turnover times, goals for the week, contracting, recruitment and more.
9. Billing and collecting. Keep accounts receivable and accounts payable current; this can make or break a center, Mr. Westergard said. "Profitable companies can go out of business because they don't have cash," he said. Be aware of all fraud risks and have a good relationship with the bank to secure any future favorable financing.
10. Benchmarking. Centers must have goals to be ever-improving business. Make all administrator bonuses contingent upon meeting financial goals for a specific time period, Mr. Westergard said. Be comparing statistics with like centers to know where you stack up. Overall, stay focused on maximizing the bottom line. If you make any changes now, in a month you will have a measurable increase in your profits, he said.
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