5 best times to perform a comprehensive ASC assessment

As healthcare providers, we recommend checkups to patients. A checkup can catch warning signs of potentially significant problems or opportunities for positive lifestyle changes. It can also reassure patients that all is well.

A third-party assessment of your ASC serves similar purposes. It can identify areas for improvement, including a change that boosts the bottom line or identification of "dirt in the corners" in need of addressing before safety, financial and/or regulatory issues arise.

Here are five times when an ASC would be well-served to undergo an independent operational analysis.

1. Sale or joint venture. As assessment performed as part of preparation for a sale to or joint venture with a hospital can identify problems to be fixed that may increase sale value. Even if fixing a problem does not boost value, it will at least not serve as a possible deterrent for a sale.

2. Administrator turnover. Many ASCs rely heavily on their administrator — sometimes too heavily. When an administrator leaves the facility, its owners may find that they do not have a strong grasp of the ASC's operations. As assessment is an opportunity to identify operational strengths and weaknesses and find out if there were areas neglected by the administrator.

As assessment can also provide a guide for hiring a replacement administrator, specifically what skills are initially needed most. For a new administrator, the assessment can serve as a checklist of areas requiring more attention. For an ASC's owners, an administrator's progress towards fixing problem areas can serve as an object evaluation of how well the new manager is performing in their job.

3. Survey preparation. Poor performance on a survey (whether it be by an accreditation, state or federal agency) can create significant challenges for an ASC. This can include a requirement to cease operations until deficiencies are addressed.

As assessment can serve as a "pre-survey" survey, catching areas of non-compliance before they are found by surveyors. Even if you are not likely to undergo a survey in the near future, an assessment can identify shortcomings that may jeopardize patient safety. An adverse event could trigger an early visit by surveyors.

Note: Some surveyors are stricter than others. An excellent survey performance is not necessarily a predictor of future survey success or even, unfortunately, of an indication that a center is performing at its best.

4. Profit margin decline. Profit margin shrinkage is often the result of revenue cycle performance issues. An assessment can help identify these issues and their fixes.

But sometimes a decline in profits is also tied to an operational issue, such as staffing or scheduling. If this is the case, a revenue cycle audit will likely not catch these problems. A comprehensive assessment that looks beyond the revenue cycle is more likely to identify these issues in need of attention.

5. Best practices. The keys to successfully running an ASC are constantly changing in response to the ever-evolving healthcare environment (e.g., regulations, reimbursement, costs). For ASCs without a management company partnership or those in rural markets, keeping up with the latest operational best practices can prove difficult. An assessment can help ensure an ASC is positioned for short- and long-term success through the evaluation of strengths, community issues that can affect patient volume, payer trends, potential strategic alliances and more.

In addition to the instances described above when an ASC assessment may prove particularly helpful, there are other times when undergoing an independent analysis can deliver significant benefits. These include the following:

• Loss of a top producer surgeon or group of physicians — How do you address this situation? If you don't have cases to replace those that are lost, you may need to "shrink" operations, which can be tricky.
• New physicians joining — How do you appropriately integrate them and their procedures/specialty into your schedule? Adding cases is good, but not if they add more expense than necessary or negatively impact efficiency.
• Shifting from a financial model that relies more on in-network than out-of-network reimbursement — How do you weather a dramatic reduction in reimbursement? Being prepared for reimbursement swings is a sign of good management.
• Planning an expansion — How do you effectively allocate and utilize new space? There are many things to consider besides increased square footage.

An assessment is not only valuable for ASCs. For freestanding hospital outpatient departments and other outpatient service lines, an assessment of operations can help ensure they are running as efficiently and cost-effectively as possible.

Be proactive
What often brings people to examine their business is a negative event or sudden development. Waiting to assess your operations until one of these occurrences is staring at you in the face makes a timely and appropriate response more difficult. It may even allow your competition — which has likely increased over the past few years — to take advantage of your slow movement.

Assessments shouldn't just be a look in the rearview mirror. They need to offer you a forward looking strategy that takes into account internal and external opportunities and threats.

Don't wait to take a deep dive into your performance. With a quarterly or annual ASC assessment, you're less likely to be caught off guard and more likely to capitalize on new opportunities.

Joan Dentler (jdentler@avanzastrategies.com) is president and CEO of Avanza Healthcare Strategies, which provides healthcare organizations with strategic guidance, with a focus on outpatient services and community collaborations. For more than 25 years Ms. Dentler has been consulting on, developing or operating ambulatory surgery centers, hospital outpatient services and community health initiatives.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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