The Business Corner is a bimonthly column by Shakeel Ahmed, MD, CEO of St. Louis-based Atlas Surgical Group.
The ancient Greeks gave time a god: Chronos. Unlike wealth, power or possessions, time could never be reclaimed once it had passed. Even kings and heroes ultimately answered to it.
An ASC is no different. Its most valuable asset may not be money at all. It may be the minute that just disappeared.
After more than three decades in healthcare, I have learned that we spend an extraordinary amount of time negotiating the price of almost everything. We negotiate implants, sutures, medications, anesthesia contracts, salaries, leases and insurance. We fight with payers over reimbursement and scrutinize supply invoices looking for another few dollars to save.
Yet one of the most expensive things inside an ambulatory surgery center never appears on an invoice. It is an empty minute.
I have come to believe that we think about ASC economics incorrectly. We measure revenue per case, cost per case, EBITDA, staffing ratios and supply expense. All are important. But underneath every one of those numbers lies a resource that is far more unforgiving: time.
An operating room has only so many productive minutes in a day. You cannot manufacture more of them. You cannot borrow them from next month. And unlike almost every other asset in a business, you cannot store unused operating-room time and sell it tomorrow.
A retailer can sell yesterday’s inventory next week. A manufacturer can warehouse what it did not ship today. But if an operating room sits empty for 30 minutes on Tuesday morning, those 30 minutes are gone forever. That is why I have begun to think of time as the perishable inventory of an ASC.
Consider how easily we tolerate its disappearance. The first case starts 20 minutes late. A surgeon arrives 15 minutes behind schedule. The next patient is not ready. An instrument is missing. Prior authorization was never completed. Turnover takes 10 minutes longer than it should. Everyone looks at the clock, shrugs and moves on.
Individually, none of these events seems catastrophic. Collectively, they can determine whether a surgery center prospers or struggles.
Research on freestanding ASCs reinforces the importance of these seemingly small operational delays. One study examining 1,378 cases across 300 operating-room days found first-case delays on nearly 29% of operating days, while turnover times varied enormously. Other research has demonstrated that improving first-case on-time starts can materially improve operating-room performance.
But I think the lesson is larger than simply getting the first patient into the room on time, we need to stop managing only cases and start managing minutes.
Imagine that every unused minute of operating-room time were represented by a dollar bill sitting on the floor. Administrators would pick it up immediately. Surgeons would notice it. Boards would ask why it was there.
Because time is invisible, however, we often allow it to disappear without assigning an economic value to it. That needs to change.
Every ASC should know the value of a productive operating-room minute. Not because every minute should be packed with another procedure, and certainly not because patient safety should ever be rushed. Efficiency and haste are not the same thing. The safest surgery center can also be the most disciplined surgery center.
The objective is not to make surgery faster. It is to make everything surrounding surgery smarter.
The patient should be ready before the room is ready. The room should be ready before the surgeon is ready. Instruments should be where they belong. Authorization should have been completed days earlier. Staffing should follow the surgical schedule rather than habit. Turnovers should be measured. First-case starts should matter. Chronic delays should not become part of the culture simply because everyone has grown accustomed to them.
There is also an important distinction between cutting costs and eliminating waste. You can only cut expenses so far. Eventually, another reduction in staffing hurts morale. Another concession from a vendor becomes impossible. Another cheaper supply compromises quality. Cost cutting has a floor. Time creation does not work that way.
Here is my practical advice, directly from the trenches: Recover 15 minutes from the beginning of the day, 10 minutes from two turnovers and another 20 minutes from a scheduling gap, and suddenly you have created nearly an hour of productive capacity without adding an operating room, purchasing a piece of equipment or hiring another employee.
That is not cost cutting. That is creating capacity out of something you already owned, and there is an even larger strategic lesson here.
For years, hospitals have possessed advantages that independent ASCs could never match: enormous balance sheets, negotiating leverage, sophisticated infrastructure and access to capital. Trying to beat a hospital at being large is a foolish game. Trust me, I have tried that, and the size disparity is insurmountable.
An ASC has a different weapon: speed. Our small size should not be viewed as our weakness. Properly managed, it is our greatest competitive advantage. Decisions can be made quickly. Workflows can be changed quickly. Surgeons can speak directly with administrators. Problems do not need to travel through seven committees before someone fixes them.
A hospital can sometimes absorb inefficiency because its size can hide it, an ASC cannot. Its advantage is not simply that it is smaller. Its advantage is that it should be faster.
That does not mean turning the operating room into an assembly line. Quite the opposite. When unnecessary delays disappear, the entire environment becomes calmer. Staff are not scrambling to recover lost time. Surgeons are not frustrated because the schedule is running an hour behind. Patients are not waiting unnecessarily. Employees are less likely to remain late because the morning started badly.
Efficiency, when done correctly, does not make medicine less human. It gives humans their time back. Perhaps that is the part of ASC economics we have underestimated most.
The administrator who eliminates wasted time is not merely improving EBITDA. That administrator may allow another patient to receive surgery that day. A nurse may get home to dinner with her family. A surgeon may finish the operative schedule without rushing. A center may accommodate additional volume without building another operating room.
The same recovered minute can create economic value, clinical value and human value simultaneously. Very few investments can do all three.
For most of my career, I have heard people ask the same question: What is this surgical case worth? It is an important question, but perhaps we have been starting in the wrong place.
Before we determine what the case is worth, we should understand what the minute is worth.
Because a surgery center is ultimately a collection of finite minutes entrusted to us every morning. Some will be spent operating. Some will be spent caring for patients before and after surgery. Some will inevitably be lost.
The responsibility of leadership is to make sure as few as possible are wasted. Money lost can be earned again. A surgeon who leaves can be replaced. A contract can be renegotiated. Equipment can be repurchased. Even a struggling surgery center can sometimes be rebuilt. But the minute that just passed is gone. It is the only asset in the building that no amount of money can ever buy back, and that may make it the most valuable asset we have.
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.
