Generating revenue and profit is important for every ASC, but looking at things from a cost perspective versus profit perspective can help find cost-saving opportunities.
Separating costs into separate buckets, determining exactly what your case cost per minute and focusing more on your reimbursement rates and payer mixes are a few mindset switches that can be beneficial for ASC operators.
These three leaders shared their insights at Becker’s 31st Annual Meeting: The Business and Operations of ASCs.
Note: Responses were lightly edited for clarity and length.
Question: Which metric do you think is most overlooked in ASC board rooms and leadership rooms today?
Theresa Broniak. Director, Ambulatory Surgical Services of Henry Ford Health (Detroit): I wouldn’t really say it’s overlooked, but it’s definitely becoming more of a focus moving forward, and that’s your reimbursement rates and your payer mix. In the sites that I oversee, it ranges across specialties from orthopedics to ophthalmology to otolaryngology, and the trends that we’re seeing with payers changing in the different markets is really something that I’m looking at almost daily.
We’re seeing more splitting of commercial payers when it comes down to certain procedures. So we are getting push back on reimbursements that we hadn’t received in the past. We are a combination of employed and private providers, and we do see a good amount of reimbursements from governmental payers, but the commercial ones are definitely becoming the ones to watch.
Geri Eaves, BSN, RN. Administrator of Bone and Joint Institute of Tennessee Surgery Center (Franklin): There’s a few things that we can control. We can control labor costs and supply costs. When you go into the boardroom, you talk about it at a very high level. But when you go in the boardroom, do you ever talk with your physicians that are on your board about just the case costing per minute and find out what does your case cost per minute? That sounds crazy, but when you have someone who comes in 15 minutes late, or you get a delay from another part of your surgical team, it costs money. When you start adding that up you and start looking at really how that is impacting your financials, it’s really eye opening to say, how each minute is costing X dollars.
I always say my biggest pet peeve is garbage in, garbage out. Sometimes there’s a lot of centers who do a lot of things with pulling spreadsheets and running numbers. We do this all day long, and what can we do to make it easier, making sure that the numbers you’re getting are correct? Look at your case cost per minute. I think that’s something that you would find valuable.
Paul Lynch, MD. Founder and CEO of US Pain Care (Scottsdale, Ariz.): I really think it’s cost. What I like to tell my friends and colleagues is, when they zig, I zag. Everyone tells me about how much they get paid for a procedure, what their reimbursement is, what their profit is. Instead of me focusing on the top line, I like to look at my costs. I put it in two different groups. I have my general supply cost, and then I have my implant costs for things like spinal cord stimulation and SI joint fusion. I am blown away by how much money we can save for the average surgery center by really focusing on cost. When everyone else is looking at revenue, I try to look at cost.
