1. Many ASCs don’t use a budget. While centers co-owned by management companies always use a budget, many 100 percent physician-owned centers do not, says Ms. Stinchcomb, based on first-hand observations as a consultant. “Physicians at ASCs that don’t have a budget might assume they don’t need one,” she says. “The numbers are all in their heads.”
2. Why a budget is important. “It’s easy to lose sight of things when you are caught up in day-to-day issues,” Ms. Stinchcomb says. She thinks ASCs without a budget don’t perform as well as they could. “A budget is a way of monitoring the facility’s health,” she says. “If costs get out of hand or revenue is lower than projected, you need to know that right away.”
3. What making a budget entails. Give the administrator or whoever else is compiling the budget the necessary time to review current finances and project expected revenue, based on new services and discussions with physician-owners. If the administrator does not have a budget background, hire a certified public accountant to help. Once the first year of the budget is compiled, succeeding years will be easier.
4. Create a strategic plan, too. Making a budget goes hand-in-hand with creating a strategic plan. A large multispecialty ASC might develop a strategic plan by convening the full staff for a day off site once a year and brainstorming. For a smaller practice, the meeting could be more modest, Ms. Stinchcomb says. “It’s important to think about goals and get feedback from staff,” she says.
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