Key Strategies to Keep ASC Costs Low
Mr. Bundren began the presentation by describing the current ASC landscape. There are currently about 6,000 ASCs in the United States, although ASC growth has declined. There were 367 new ones in 2004 but only 153 in 2011. The average life cycle of an ASC is 12 years, a number Mr. Bundren called "kind of startling."
"What typically happens is growth, maturity and then you start on a decline," said Mr. Bundren. "If you aren't taking steps to push that life cycle back up, you're going to be in a world of hurt."
For ASCs to save costs, Mr. Bundren recommended they look to billing and collections. "Once cases are done, you need to benchmark 48 hours to turn around the bill," he said. Billing affects the entire cash flow of your business, and making it more efficient requires coordination of physician dictation. "You have to emphasize to physicians that we need to turn around bills so we can get our money. If they're partners, they tend to understand that," said Mr. Bundren.
The other component is verifying claims after they've been submitted. Ms. Arjoyan detailed an aggressive claims follow-up process, which includes following up on claims with insurers 15 days after their submission, setting collection goals and monitoring them on a regular basis, aggressively addressing claim denials and creating relationships with payer representatives.
Ms. Arjoyan discussed a few key cost-saving strategies, particularly those related to staffing. ASCs can use per diems and part-time employers for lower labor costs, and Ms. Arjoyan said her ASC has cross-trained nurses and staff so they can pitch in and assist with various duties as they unfold. The ASC also adjusts its staffing to case volume. Once cases are completed, employees go home.
Although labor costs are substantial, supply costs are typically the largest expense item for an ASC. "Typically 80 percent of your costs are for 20 percent of your items," said Ms. Arjoyan. ASCs can save by maximizing the use of their group purchasing organizations, which typically saves 7 percent to 15 percent on supply costs. ASCs can also consider direct negotiation with large vendors.
Ms. Arjoyan's ASC also uses standardized surgical products, such as instrument trays and supply packs. She suggested ASC staff review pack contents on a regular basis to eliminate unused items for lower pricing. "ASCs should also renegotiate pack contents on a regular basis," she said.
More Articles on ASC Costs:5 Tactics to Trim Surgery Center Staffing Costs
Cut Costs Where it Counts: 5 Steps to Reduce ASC Staff Hours Per Patient
5 Steps to Realize Huge Savings on Supply Costs at ASCs
© Copyright ASC COMMUNICATIONS 2012. 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.
- How Physician Thinking Changes After Working in ACOs
- 2014 Financial Impact Analysis Doesn't Stop With CMS' Final Rule: Don't Neglect CMS NCCI Edits
- 4 Drivers of Recent M&A Activity in Healthcare
- 8 Reasons to Outsource Medical Billing Services
- 5 ICD-10 Transition Considerations Medical Practices Have Likely Not Thought About