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ASC budgeting for 2021: 6 execs outline their strategy

ASC administrators had to change plans during the pandemic after some temporarily closed or lowered procedure volume to conserve resources and stem the spread of COVID-19.

Many administrators are now thinking about 2021 and trying to figure out how to budget for the next year when there is still so much uncertainty around COVID-19 protocols and vaccine distribution. Here, six administrators outline their approach and key considerations for budgets next year.

Linda Bravyak, RN, NHA, CASC. CEO of Pocono Ambulatory Surgery Center (Stroudsburg, Pa.): One of the biggest challenges we see is increased labor cost for staffing for the entire COVID-19 testing process. This process not only includes the actual swab testing of the patient, but all the other extra work that goes along with it. We have been tracking the actual time it takes for all the steps needed to do it here at the center such as:

  • Pre-op phone calls to schedule the testing for the patient
  • Actual testing
  • Post test results phone calls
  • Making up the patient packet for the tests
  • Adding patient labels to the paperwork for day of testing
  • Printing all the requisitions out for the lab
  • Follow-up with the lab for the test results
  • Additional calls to the center for directions, changing their times
  • Ordering of supplies for the testing

Add the screening of patients, physicians, staff, and vendors at the door, and that is an additional cost of a staff member. Also, we do daily calls to the lab for the specimen pickups

The other thing to consider is the actual budgeted volume versus the trending reports from previous years.

Doug Wisor, MD. CEO of National Spine & Pain Centers (Rockville, Md.): We are considering 2019 to be our baseline for the 2021 budget creation for a couple of reasons. There were several both puts and takes in 2020 with COVID-19, and the third phase is clearly upon us. At the same time, we are also hearing news that a vaccine is starting to come out. Using 2019 as the baseline as our budget barometer is reasonable, whether that be on a per provider or per center productivity basis. As we add providers and centers we'll adjust, but we are going to treat 2020 as an outlier and budget off of 2019 volumes.

What creates a challenge for platform-level companies like ours, that operates out of 22 ASCs in 11 states with approximately 125 physicians, is the confusion of which industry reports to follow as the credible benchmark. We are a private equity-backed platform and follow not only Becker’s updates, but also the Marwood Group reports closely, as well as the IQVIA benchmark data and Cohen industry report. More often than not, we have to extrapolate pain management procedure benchmarks from orthopedics or neurosurgery data. Dissecting outpatient musculoskeletal pain from those industry reports collected from hospital outpatient departments isn't always an easy apples-to-apples comparison.

Net-net, we see 90 to 95 percent of historical baseline in regards to total encounter volumes is where the industry is at today. Yet, new patient encounters seem to be lagging slightly behind. It appears that established patients are comfortable with a known entity provider, but new patients have more consumer confidence concerns about seeing providers they have not established a relationship with yet. We originally envisioned 5 percent growth over 2019 this year, and we will use that as a volume barometer to finalize expectations for next year with the caveat of consumer confidence in the vaccine and potential impact of unemployment on patients' disposable spending.

Tina Piotrowski, BSN, RN, CASC. Administrator of Copper Ridge Surgery Center (Traverse City, Mich.): Budget planning for 2021 will be a challenge for ASCs and will require several scenario models based on the unpredictability of the COVID-19 pandemic. I anticipate continued supply cost increases, particularly with personal protective equipment, as the disruption in the supply chain carries over to 2021. In addition, labor costs remain higher as centers staff for COVID protocols. Expanded cyber liability is also being analyzed due to more remote working for some positions and the increase in cyberattacks on healthcare.

Jacob Rodman. CEO of Raleigh (N.C.) Neurosurgical Clinic: To be honest, 2021 will be one of the more difficult years to budget with so many unknowns, especially during the first quarter. We are approaching it through an overly conservative lens in hopes we far exceeded our expectations. We are going to close 2020 down roughly 15 to 20 percent and anticipate that trend to continue into the early part of 2021 with an eventual rebound toward the summer months.

Sam Romeo, MD. General Partner of Tower Health & Wellness Center (Turlock, Calif.): The challenge is the potential of a Biden administration's impact on social and political restrictions on businesses. We will pray that with the advent of the vaccine, the national political scene and our California governor will reduce the restrictions and fear mongering and permit us to return to normal.

Todd Evans. CEO of Orthopaedic Institute of Dayton (Ohio) and Executive Director of Greater Dayton Surgery Center: Budget planning for 2021 is obviously more difficult than usual. I think one of the key components is going to be flexibility. The ability to flex your budget and handle variations in volume/expense is going to be critical as we go into 2021. Another key is having a solid understanding of your margins. We found that being able to flex our case mix to maximize profits prior to a shutdown and coming directly out of the shutdown was critical. Being able to understand exactly what your margins are on each individual case allows you to make better decisions when every case counts.


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