At Becker's ASC meeting in Chicago on Oct. 23, a panel of experts and leaders shared tips to help executives keep their surgery center's profitable.
Here are three tips to help maintain a surgery center’s profitability.
1. Focus on reimbursement. John Gol, executive director of finance at Borland Groover Clinic in Fernandina Beach, Fla., said, “It’s important to remember that payers have a budget.” For surgery centers to get the maximum the payers’ budgets allow for, the centers have to pursue it because the budgeted amount doesn’t carry over to the next year. It’s also important to renegotiate payer contracts. If surgery centers don’t renegotiate they are anchored at a prior date. When negotiating the contracts, surgery centers “have more leverage than they think,” said Mr. Gol.
Concerning renegotiation, Stephen Blake, JD, CPA, CEO of Central Park Surgery Center in Austin, Texas, said “You’ve got to constantly be going back to the payers." He also said it’s important for surgery centers to know the codes that are going pay them the most and to negotiate with payers on those.
2. Expense management. Keeping expenses down is a vital part of keeping a surgical center profitable, and Seth M. Silver, MD, medical director and president of The Ambulatory Care Center in New Jersey, said he uses competition as a tool to keep expenses under control. Physicians are competitive and by providing them with a spreadsheet that shows their costs compared to others in their center, they will be motivated to bring expenses down if they are the one with higher costs.
Robert Zasa, managing partner and founder of ASD Management in Dallas, said his center does a mini profit loss spreadsheet by CPT code for each physician at each center. He said using competition has been a successful tool.
3. Benchmarking. Surgery centers can get control of their expenses by benchmarking. Dr. Silver uses benchmarking, and he said “we really know our expenses of what it is to practice our business.” When surgery centers’ expenses are exceeding their benchmarks, it’s important to recognize that and make changes to get back on track.
More articles on ASC issues:
Leveraging ambulatory data to understand market share & build strategy
3 key thoughts on ASC physician recruitment
ASC real estate: To sell or not to sell?