ASC leaders are facing constant pressure to protect margins as labor, supply and operating costs climb. But focusing too narrowly on expense reduction can miss the bigger financial picture.
Two ASC executives recently joined Becker’s to share the most common misconceptions about managing margins — and where leaders should focus instead.
Question: What is the No. 1 thing that people misunderstand about how to best manage ASC margins from a financial perspective?
Ray Brown. CEO of Lake Lucien Surgery Center (Maitland, Fla.): Topline is very important to the bottom line. Many facilities lose senior surgeons, or do not update the acuity of their cases, and deterioration of the topline greatly impacts the bottom line.
Joseph Hurley. CEO of AVORS Medical Group (Lancaster, Calif.): I think the biggest misconception is that ASC margin management is primarily a cost-cutting exercise. It isn’t.
The highest-performing surgery centers don’t start by asking, “How do we spend less?” They start by asking, “How do we create the most value for our patients, surgeons and organization?”
Physicians are the end users of the products. When they are involved in evaluating implants, biologics, disposables, and technology, they often identify products that improve efficiency, reduce complications, shorten OR time, or enhance outcomes. Those improvements can have a greater financial impact than simply choosing the lowest-cost item.
At the same time, manufacturers want long-term partnerships. Rather than approaching negotiations as a battle over price, successful ASCs collaborate with vendors by sharing volume expectations, growth plans, and clinical goals. That creates opportunities for better pricing, value-based agreements, education, inventory support, and access to innovation.
The goal isn’t to buy the cheapest product. The goal is to purchase the right product at the best value.
In my experience, ASC margin improvement comes from aligning three groups:
• Physicians, who determine clinical value.
• Administration, which understands financial performance.
• Manufacturers, which can provide competitive pricing and strategic partnership.
When those three groups work together, you don’t just reduce supply costs, you improve surgeon satisfaction, increase efficiency, strengthen patient outcomes, and ultimately grow profitability. That’s a far more sustainable strategy than simply trying to cut expenses.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
