How can ASCs optimize cost-cutting efforts? 3 tried-and-true strategies
"My thoughts on this: make sure you take a methodical approach to managing your costs. Track your expenses, compare costs to benchmarks and target opportunities for savings. Looks for trends and/or spikes in cost areas, and ascertain if savings can be gleaned," says Andrew S. Weiss, CASC, administrator of The Endo Center at Voorhees (N.J.).
He also recommends an effective materials management plan, especially as materials are such a large expense. "Elements to include: accurate par levels that maximize inventory turns, a three-way matching system to ensure suppliers are delivered what was ordered at the agreed-upon price, a physical inventory at least annually and a mechanism allowing the flexibility to adjust order quantities to match case volume," he says.
Know that it takes a village
Bill Hazen, administrator at the Greer, S.C.-based Surgery Center at Pelham, encourages collaboration in cost-cutting ventures: "Employee bonuses make certain all employees (and employee owners) watch cost," he says. He also advocates for staff and physician education. "Compare doctor against doctor to help them understand cost, and be aware that accurate live cost accounting is useful for education physicians and staff," he says.
Fostering inclusive competition is key
Keith Smith, founder of the Surgery Center of Oklahoma in Oklahoma City, says healthy competition is the key to spurring the innovation that drives long-term cost-cutting efforts. "Many, if not most, of the new efficiency strategies have come from our operating room staff, each of which has been readily embraced by the surgeon partners, as it is to their advantage as owners to see cost-saving ideas implemented," he says, noting that distributing supply and implant costs for procedures among partners at partnership meetings is also commonplace.
"This healthy competition has been a key to the success of our online pricing initiative, as inefficient or wasteful practices can easily eat away at any marginal profit generated … the efficiencies we have realized are to a great degree the product of an engaged and incentivized staff," he says.
More articles on cost-cutting:
Surgeon, anesthesiologist top list of meaningful, well-compensated jobs
Woolfson eye institute celebrates 4th birthday
4 smartest things ASC owners do today: Preparing for sale
© Copyright ASC COMMUNICATIONS 2016. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.
To receive the latest hospital and health system business and legal news and analysis from Becker's Hospital Review, sign-up for the free Becker's Hospital Review E-weekly by clicking here.
- Change Healthcare and SourceMed partner in order to create integrated billing solutions for outpatient providers
- 5 risks ASC owners face when they don't have a succession plan
- 5 things to know about AAAHC's Dr. Arnaldo Valedon
- Global capsule endoscopy market to grow at CAGR 14.8% until 2020: 5 trends
- NJ Devils' Jon Merrill has shoulder surgery at Midtown Surgical Center: 5 things to know