5 ways ASCs are keeping costs down

Rising operating costs amid record-breaking inflation is making it difficult for ASCs to meet margins.

Fifty-five leaders joined Becker's to share what they would add to their own "successful ASC management" cheat sheet. Here are five ways they're keeping costs down:

1. Financial accountability plan

Shireen Ahmad. System Director of Finance for GPO and Affiliate Business at CommonSpirit Health (Chicago): I think instituting financial controls and stewardship are a crucial part of a successful ASC. Negotiating great prices and contracts with vendors helps keep costs down, but strong terms and conditions can also help reduce costs through delivery, maintenance, warranties and keeping high compliance. Often ASCs lose out significantly by paying higher prices or list price when they buy products or implants that are not on contract, which has a significant impact on profitability.

Armando Colon. CEO of DNA Medsolutions: Another management factor for success is a financial accountability plan and cost savings plan; financial discipline matters. We are all aware of metrics that make ASCs equitable, like A/R days, net revenue per case, cash collections and the list goes on. Creating an accountability plan to help make time to follow through with the necessary activities by leveraging technology to automate or enforce tedious yet critical processes. Focus on financial discipline; you will see results. Remember, you can't manage what you don't measure.

2. Understand your payer base

George Dickstein, MD. Gastroenterologist at Boston Endoscopy Center and Chair of the Department of Medicine at MetroWest Medical Center (Natick, Mass.): Assure fair facility fee compensation for the services provided. This will take a dynamic understanding by center leadership of the commercial and government payer base, including burgeoning Medicare Advantage plans. Getting accurate rate information to know what your competition is collecting can be challenging but will often be worth the investment. As dollars tighten and costs increase and insurers try to shift procedures to non-hospital licensed sites of care, there are inevitable conflicts and bumps in the road that will sometimes require difficult decisions to be made, including deciding what plans NOT to participate in. Resist the temptation to participate in poorly paying plans, especially when such participation will have little real impact on your success.

Susan Lee, DO. COO of South Meadows Medical Center, Renown Health (Reno, Nev.): I would say that successful ASCs need to be fully aware of their contracted rates and schedule opportunities to review contractual negotiation calendars and procedure lists. As ASC procedure lists are changing with payer policies, it is always a good idea to proactively reach out to a payer to review the procedural lists and contracted rates. ASCs also need to be aware of their physician customers/consumers — ensure time utilization is consistent with their policies and work hard to create additional access for their top producing surgeons.

3. Knowing your data

Michael Richards, MD, PhD. Graduate Program Director of Health Services Research at Baylor University (Waco, Texas): ASCs will increasingly be seen as a key care delivery setting as more covered lives are included in value-based payment arrangements. Succeeding in these arrangements will crucially depend on sufficiently granular and timely data, but not just data for the sake of data. Innovative and relevant ways need to be crafted to best understand and act upon the data. An important ingredient for doing so is getting the clinical providers engaged in the process throughout (e.g., what data to collect, how to make it clear and transparent, and ultimately how to use it to make positive care delivery changes). Such an approach leverages "on-the-ground" clinical insights and encourages greater acceptance from the providers with respect to the process as well as the collective care delivery improvement goals tied to the endeavor. All of which can save precious time and make success more likely.  

4. Performance improvement program 

Cindy Segar-Miller, RN. Principal at Spectrum Health Partners (Portland, Maine): One thing that every ASC should be doing for successful ASC management is deeply involving clinical and nonclinical line staff in their performance improvement program. The staff working closest to the patients have the most intimate knowledge of the problems, opportunities and usually know exactly how to fix them. By involving the staff in all aspects of the performance improvement program, staff are given the opportunity to own and improve their results.

5. Regulatory affairs program

Robert Thomsen, MD. Senior Medical Director of Perioperative Services at Johns Hopkins Medicine (Baltimore): A robust regulatory affairs program is key to a successful ASC. An individual or group who fully understands the scope of performance element changes allows you to maximize potential efficiencies and mitigate operational barriers for the practice. A surveillance system is an essential element to identify compliance issues, provide education and reduce potential liabilities from new staff and contracted service providers.

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