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10 key steps to immediately improve ASC finances

Veteran ASC administrators shared 10 key steps healthcare leaders can implement today to improve financial performance for ASCs during a presentation at Becker's ASC Review 23rd Annual Meeting: The Business and Operations of ASCs in Chicago Oct. 27.

1. Leadership. "Leadership is the process of influencing people to accomplish goals," said Ann Geier, RN, CNOR at SourceMed. Engaged and effective leadership plays a fundamental role in guiding healthcare staff through times of instability and change. Oftentimes, successful change management largely depends upon a leader's ability to show staff why change is necessary and positive.

2. Managing change. Process improvement doesn't happen overnight. Implementing too much change too quickly can alienate staff and negatively affect employee morale. Ms. Geier recommends ASC administrators break down big picture goals into many smaller, achievable goals to rally employee support.

3. Materials management. Materials expenses consume between 17 percent to 25 percent of an ASCs net revenue, making supply chain the second greatest expense after labor. Ensuring ASC supply chain and spend programs operate smoothly and efficiently is key to healthy financial and business performance. To improve supply chain processes, Ms. Geier said administrators should focus on implementing best practices in their inventory and preference card management systems. Best practices include: ordering supplies as needed to avoid waste, utilizing group purchasing organizations, digitizing and maintaining detailed preference cards and putting price tags on supply crates to raise price awareness among staff. 

4. Case costing. Case costing gives ASC surgeons and nurses valuable insight into how their day to day activities impact the organization's business model. Through case costing, Rob Westergard, CFO at Ambulatory Surgical Centers of America, discovered each minute an operating room was in use at his facility cost the company $18. Using this data, Mr. Westergard was able to explain the critical importance of starting surgeries on time to his surgical team and improve punctuality among staff.

5. Recruiting new physicians. With the increase in physician employment and heavy competition for ASC investors, recruitment efforts are increasingly becoming more complicated. To successfully recruit physicians, ASCs should develop partnerships with regional hospitals to leverage recruiting opportunities, Mr. Westergard said.

6. Staffing. Staffing and labor account for the highest business expense for ambulatory facilities. ASC administrators should deploy creative scheduling solutions to use staff as efficiently as possible, thereby keeping labor costs as low as possible without threatening clinical quality. Ms. Geier suggested administrators implement vertical scheduling, cross-train employees to fulfill dual roles, consider using per diem staff when necessary and restricting employee overtime.

7. Schedule Compression. Vertical scheduling and compression can drive optimal efficiency in the OR. By compressing multiple surgeries back to back during the course of the week, the ASC can close for a few days each week. This reduces the amount of time an OR is open but not in use, saving ASCs significant overhead expenses.

8. Financial management. Many administrative tasks fall under the umbrella of financial management, but Mr. Westergard pointed to four fundamental issues ASC administrators should focus on: the relationship with their banker, financial benchmarking, billing and reporting. Providing surgeons with case costing reports can get physicians' support for process improvement initiatives, Mr. Westergard said. 

9. Billing and collecting. As patient financial responsibility continues to increase, ASCs should revisit their collections practices to ensure they recoup patient payment in full. By providing patients financial counseling, alternative payment options and by implementing point-of-service collections, ASCs can significantly increase their chance of receiving optimal reimbursement.

10. Benchmarking. By comparing ASC operations to regional competitors, national averages and industry best practices, administrators can identify and address core areas for improvement, such as quality, performance or billing and collections.

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