Ophthalmology has never been an extremely high-reimbursement specialty, and CMS’s new ASC payment system did little to change that. Further, Medicare patients remain the largest patient group for these procedures, so there isn’t much in the way of opportunity for compensating for minimal reimbursements. In other words, the challenges in this mature ASC specialty remain the same.
“We’ve been performing cataract surgery the same way for quite a long time,” says Steve Blom, RN, MA, MAHSM, CASC, administrator of the Specialty Surgery Center in San Antonio, Texas. “There have been improvements in phaco machines and lenses but, really, they’ve been doing phaco for cataracts for over 20 years, and a lens is a lens. If you want to do cataracts, you have to find ways to be efficient and keep supply costs within reason.”
Here is the experts’ advice for doing just that in order to maintain and enhance profitability in this challenging environment.
1. Focus on volume first
“It’s a volume-driven business; on a monthly basis, you probably need at least 200 cases to sustain an ophthalmology program,” says Don Cook, founder of Pacific Surgical Partners, based in southern California.
To do that, Mr. Cook requires that PSP’s ASCs’ schedulers have face-to-face meetings with the surgeons’ schedulers at least once a month.
“They have great phone relationships, but it’s even more important to take the physicians’ schedulers to lunch or breakfast or just to see them in their offices in order to develop personal relationships,” he says. “It’s amazing, but every time the schedulers go out, the number of cases for the surgeons [whose schedulers were visited] increases.”
“We also are sure to give visible credit on a daily basis for how many cases are booked, and give kudos when we reach 100 cases hard-booked for the next month. Even without big money incentives it becomes much more exciting when success is
visible; it becomes personal for the schedulers to try to achieve these goals.”
2. Compress the schedule
“The volume isn’t as important as the efficiency” once you’re actually performing the cases, says Brent Lambert, MD, FACS, founder and director of business development for Ambulatory Surgery Centers of America (ASCOA) in Hanover, Mass. “If you’re only doing two cataract cases an hour, you’re not going to make the kinds of profit margins you need. But if you let the surgeon work out of two ORs and have rapid turnover time, you can do six an hour.”
“Most of our surgeons are doing at least four an hour. When you are that efficient, you can be profitable.”
This kind of practice can let you compress the schedule so that you’re doing more cases in fewer days, a practice Mr. Cook recommends.
“If you can do the cases in three or four days a week – even if you can only do that every other week – that’s enough to use part-timers or reduce the staff, and that’s enough” to significantly cut expenditures, he says. Further, he recommends having a mix of full-time core staff and permanent part-time staff who are flexible based on your ASC’s needs.
3. Take case-costing seriously
“Throughout our centers, we case-cost, and we know what the supplies are on every case for every surgeon,” says Dr. Lambert.
So, for example, he says, you should know that a surgeon’s six-minute procedure time costs you $108 in overhead, that he spends $200 per case on supplies and that, therefore, your out-of-pocket costs are $308 per procedure on his cases.
“At $308, since we’re getting reimbursed $960, that’s very, very profitable,” says Dr. Lambert. “For the average ASC, my most important advice would be to case-cost on every case. This lets you find the most efficient surgeons and share the best practices with the other surgeons.”
But you can’t know that if you don’t track and measure everything you can, says Mr. Cook. “Doing so lets you set objectives for all parties involved to improve on any of those measures – cutting time, cutting supply costs, setting a target for average cost per case,” he says. “I know there are national benchmarks, but each center starts from a slightly different place. You need to be able to look at where you are, and find realistic but challenging goals you want to reach.”
In Mr. Cook’s centers, there are incentives for staff such as the materials manager, director of nursing and administrator, who have an impact on the process.
“It’s not a huge portion of their base salaries, but it’s still an incentive,” he says. “Depending on the level of their responsibility for cost structure and revenue, the incentive potential goes up.”
4. Be open about costs
In terms of keeping supply costs down, it’s “unlikely you’ll be able to trim fat by just trying to negotiate a better deal on supplies,” says Mr. Cook. It is better, he says, to put your tracking efforts to work for you with the surgeons. He cites an example from preference cards of two of his surgeons.
Surgeon A specified six different medications for use at a total cost of $216.20 per procedure. Surgeon B was using a pre-mixed dilating solution that cost $25.02 per case. When Mr. Cook shared the costs with the surgeons (and showed that the pre-mixed solution was a best practice), several agreed to switch to the pre-mixed solution; eventually, everyone changed to the less expensive method.
“It’s a dramatic example of the differences that are driven by physician preferences,” says Mr. Cook. “You’re not going to make progress in the short run by saying, ‘Doctor, if you do it this way, you can save us a bunch of money can you do that?’ But if you openly provide data to the medical executive committee, you can talk about ways to get the costs down through practice improvement. Let them provide efficiency ideas and let it be their decision. That’s the only way to get implementation efficacy.”
In the aforementioned example, the surgeons who changed to the pre-mixed solution “ended up liking it better and feeling collaborative because they got to interact with their fellow doctors in a way they don’t usually get to.”
Mr. Cook also doesn’t automatically say no when a surgeon says he needs a special knife or one viscoelastic versus another. They simply must report their requests directly to him, and he is up front about the costs.
“When a surgeon calls and says he needs a new viscoelastic, I say, ‘That will cost $40 a case. In the 600 cases you’re going to do here this year, that’s $24,000,’” says Mr. Cook. “When you put it like that, virtually all of the time the surgeon will say it’s not worth it.”
Dr. Lambert recommends sharing not just among surgeons, but among centers — and building an exchange so you can learn as well.
“Don’t be afraid to pick up the phone and call the administrator of another center, introduce yourself and say, ‘I just want to share my data and would appreciate it if you could share with me your supply costs for your most efficient cataract surgeon,’” he says. “The ASC industry is very collegial; we’re trying to improve and make things better for patients, and helping each other is better for the industry.”
Contact Stephanie Wasek at stephanie@beckersasc.com.
