Last Friday, Reed A. Martin, COO of Surgical Management Professionals, and Tom Mallon, CEO of Regent Surgical Health, shared ways to improve physician-owned hospital profits at the Becker’s ASC Review 9th Annual Orthopedic, Spine and Pain Management Conference in Chicago.
First, Mr. Martin shared best practices to develop leadership within a physician-owned hospital. “What better way to increase revenue and decrease costs than to have your physician partners act as leaders of your facility?” said Mr. Martin. He suggested the following leadership techniques:
• Facilities begin by defining a clear purpose for physicians, physician partners, employees and patients. Goals should be directly related to this purpose.
• Leaders should identify barriers to achievement. Is it training, instruments, education, scheduling, equipment or something else? Speak with everyone on staff to solve this.
• Think about which tasks may be repetitive and automate them. “Facilities gathering and accumulating their own data should know there are other quicker ways to do that. That is not the best use of your time or your employees’ time,” said Mr. Martin.
• Establish a culture that values bottom-up information and has a “there are no bad ideas” approach to cost reduction.
Mr. Martin also recommended facilities adopt case costing reimbursement tools to examine cases and physician costs compared to revenue. Benchmarking should ignite discussion and not be treated as black and white information. Mr. Mallon recommended a tool called Inventory Optimization Solutions, which is an inventory management and electronic ordering system. This tool helped reduce supply costs for Regent facilities. “We have to control supply costs — that is the biggest leak in our boat,” said Mr. Mallon. The escalation of supply costs has exceeded drug pricing in the past 10 years.”
Mr. Mallon also recommended controlling supply costs by controlling reps. Mr. Mallon suggests a “no signature, no pay,” philosophy. “If they want to donate something, reps can do it. But if an administrator or CEO has not signed off on it, the rep will not be paid,” said Mr. Mallon. Also, Mr. Mallon said low volume does not mean low prices. “If you can get your physicians to focus and work with one or two vendors, you can drive pricing down as low or lower than that of a community hospital,” said Mr. Mallon. Finally, he recommends renegotiating contracts with vendors if there is a change in case mix or payor mix.
Related Articles on Profits:
3 Ways to Cut Costs and Improve Profits
Recruiting and Staffing Changes to Immediately Improve Profits
Supply Changes for ASCs to Immediately Improve Profits
