5 Ways to Reduce Costs and Bring New Business to a Surgery Center

Bonnie Brady, RN, the administrator of Specialty Surgical Center in Sparta, N.J., shares five tips for reducing costs at an ASC. Ms. Brady has been with Specialty Surgical Center, a multispecialty, two-OR ASC, since May 2008. Since she arrived, the center's expenses have dropped significantly, and it has drawn new physicians and reduced overtime costs.

1. Regularly review all contracts.
As soon as Ms. Brady arrived at the ASC in 2008, she looked at each and every contract and requested new quotes for everything from linens to malpractice insurance. She now goes back and reviews the contracts annually. "We call it 'shopping it out,' " she says.

2. Get staff buy-in for cost savings efforts. In this area, Ms. Brady says education is key. Even so, it does not happen overnight, she says. For that reason, Ms. Brady has really worked to engage the center's staff, and even the community, in efforts to understand an ASC's costs.

One way she did this was a variation on the traditional game of guessing the number of candies in the jar. Last summer, the center held an open house and hosted an event called "The Price is What." The surgical center's employees were asked to research costs and put price tags on everything in the center. "They were given price lists," Ms. Brady says. "They and the doctors were pretty surprised to find out what things cost."  Legislators and community members were invited to the open house, where both of the center's ORs were set up and labeled with price tags, one for a knee arthroscopy procedure and the other for spine surgery. The costs of each OR, with all of the equipment and devices for the procedures, topped $1 million. Guests were asked to guess how much each OR cost, and the person who came closest received a prize. Nobody's guess came close to $1 million, and most guesses were in the $200,000-$300,000 range, Ms. Brady says.

"My goal was to educate the public and to educate legislators," she says. "What I got out of that was a more cost-conscious staff." Now the center's staff members know not to approach her with a request for a purchase unless they have at least two quotes in hand.

The cost-cutting measures do not stop at medical devices and office supplies. They also apply to larger business expenses. Ms. Brady is currently engaged in looking at the center's banking relationships to find out whether it is eligible for more favorable interest rates than it is currently receiving on outstanding loans. "We are constantly keeping up on what's out there," she says. "You have to be on top of things; you have to be aware, or you're going to get lost."

The efforts at frugality are paying off. In the past year, expenses have dropped from $600,000-$700,000 annually to roughly $460,000, she says.

3. Reach out to the community for customers and physicians. Reaching out can involve sponsoring seminars, hosting educational opportunities for physicians, joining the local chamber of commerce and partnering with local educational institutions, all of which the Specialty Surgical Center has done recently.

In addition to speaking to the local chamber about what an ASC is, Ms. Brady has organized a day of CPR training for the community to bring people to the center and see what goes on there. "We're trying to show everyone that we're there, and we're good," she says. "We want to be a good neighbor and I think we are."

Building a reputation in the community also helps bring in new physicians, which is critical to a center's growth, she says. The surgical center recently added a new physician partner and is likely to add several more in the near future, she says. Ms. Brady even went so far as to hire a marketer to seek out physicians who might be interested in building a relationship with the center.

4. Invest in technology.  The Specialty Surgical Center recently deployed new practice management software that has streamlined patient registration and allowed for national benchmarking. This initiative has already had an impact on profitability, she says, with nursing overtime drastically reduced from an average of 12 hours of pre-op overtime per nurse per pay period to 30 minutes or less because nurses spend less time gathering information manually.

5. Be flexible. Ms. Brady says everyone who works at the center, from physicians to staff, knows that this is part of the job description. To remain competitive, the center will open on a Saturday or remain open late in the day to accommodate new business. "If you can't be flexible," she says, "you can't work here."

Learn more about Specialty Surgical Center.

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