What's losing ASCs money right now

From supply chain problems to high staffing costs, seven leaders joined Becker's to discuss the factors that are losing money for ASCs. 

Editor's note: These responses were edited lightly for brevity and clarity. 

Michelle Eilander, RN. Administrative Director of Ankeny (Iowa) Medical Park Surgery Center: Supplies, supplies, supplies. Everything seems to have inflated prices and the supply chain problems, including back orders, are cutting into the profit for ASCs. There are many times that we have to order a higher-priced item due to the back order of the regular-used item. There also have been times that we had to order from multiple vendors, and then we get the items all at once and now have a surplus sitting on our shelves. It is a continual struggle since the COVID-19 pandemic. 

Michelle Fischer. Administrator of Christus Surgery Center-Stone Oak (San Antonio): While it's different for various locations, paying very high rates for agency staffing can quickly negatively impact the bottom line. ASC leaders should continue to look closer at creative and strategic avenues for staff recruiting and use all resources available to include existing staff and physicians. In our market, these resources have been very valuable and helped us stay adequately staffed. In general, a lack of active and ongoing negotiations with managed care payers can also contribute to diminished revenue. 

Melissa Hermanson, MSN, RN. Administrator of Ambulatory Care Center (Vineland, N.J.): The increasing number of patients with publicly funded insurance plans, whether Medicare or Medicaid, can be challenging from an economic standpoint. While some procedures are predictable and acceptable for the ASC budget, others cross the red line. This often happens with podiatry and orthopedic patients with unexpected implants that exceed Medicare reimbursement for the procedure.

Michael Powers. Administrator of Children's West Surgery Center (Knoxville, Tenn.): The most common scenario that I see in which ASCs lose money is primarily not focusing on increasing revenue. The biggest is working on contracts that pay sufficiently per the surgical mix most common to their specific center. You cannot have most of your cases performed with minimal reimbursement and be successful. The second most common is not focusing on a regular basis on ways to control supply and pharmaceutical costs especially in an environment where there is a lack of supplies, dealing with back orders and current inflation rates.

Liliana Lehmann. Founder and President of Axis HealthCare Partners (Fort Lauderdale, Fla.) 

  • High staffing salaries when the strategy is only based on economics.
  • Medical and surgical supplies costs due to reactionary and not proactive measures (next-day shipping and freight charges, non-standardized supplies, unrealistic part levels, not current physician's preference cards).
  • Not renegotiating or terminating money-losing payer contracts.

Mark Spina. Director of Operations at the Endoscopy Center of Connecticut (Hamden): What's losing ASCs money right now is the lack of ability to get inflation level increases from commercial insurance payers. Even with inflation running at 5 to 8 percent currently, commercial payers are only willing to increase contract reimbursement rates by 2 to 3 percent. With labor and supply costs increasing at a 5 to 8 percent annual rate, this results in margin compression and can ultimately lead to a negative cash flow situation.

Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Webinars

Featured Whitepapers

Featured Podcast