Level 1: Salaries as a percent of net revenue. Monitor this figure monthly, comparing it to the ASC’s budgeted amount. Look for trends month over month. For starters, this requires having a budgeted amount to compare to. “If you don’t put together a budget, I suggest you start doing so as soon as possible,” Mr. Leger says. “Making a budget provides a handy starting point for measurements, even if it does turn out that it needs adjusting.”
If the actual figure for salaries as a percent of net revenue is higher than the budgeted amount, it could be the budgeted amount was set too low. However, it could also mean there is some unidentified problem with staffing costs, which then must be ferreted out. This will involve drilling down to the next level of statistics, which follows.
Level 2: Clinical staff hours per case. Look next at this metric, which, if higher than expected, suggests too many staff members are on duty to do the work that needs to be done. To calculate this figure, divide clinical staff hours worked in a given period by the number of cases performed in that period. Data on staff hours worked might be obtained from the ASC’s time-clock vendor, the company that monitors when staff arrive and leave. The vendor should be able to provide total hours worked by clinical staff.
Compare clinical staff hours per case to an earlier period. If the figure is rising, there could be a variety of reasons for this. “You may have operational inefficiencies,” Mr. Leger says. “Check for some possible scenarios.” For example, it could be that clinical staff members are not being sent home when cases are completed. Or it could be that cases are being scheduled too far apart from each other, such as at 10 a.m. and 2 p.m. “That’s a big gap, but not enough time to send staff home and have them come back in again,” he says.
On the other hand, clinical staff hours might be tracking high because there are more staff members than necessary or because the surgeon is taking too long to complete cases. But if clinical staff hours per case are in line, then it’s time to look somewhere else on why salaries as a percent of net revenue are so high. You will need to drill down to the next level, which follows.
Level 3: Clinical salaries paid per case. “If clinical staff hours are not the culprit, check out whether the problem is high salaries as a percent of net revenue,” Mr. Leger says. If this is the case, it might mean that higher-paid staff members are being used for work that lower-paid staff should be doing. For example, two RNs may be staffing the OR instead of an RN and a surgical tech. If this is not the case, it could mean that the ASC is simply paying staff too much, which involves drilling down to yet another level of statistics.
Level 4: Hourly rates of staff members. Compare the ASC’s salaries and wages with benchmarks from the state or national ASC association or the VMG Intellimarker, for example. “The problem might be that staff members are getting paid above the benchmark and above what the ASC budgeted for their salaries,” Mr. Leger says. If none of the previous four metrics can explain high salaries as a percent of net revenue, drill down to yet another level and analyze administrative salaries in the same manner that clinical salaries were analyzed.
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