ASCs are navigating a tough financial landscape: operational costs continue to climb while Medicare and private payer reimbursements remain flat, or, in some cases, decline.
From staffing models to supply chain management, six ASC experts joined Becker’s to discuss how they’re tackling this imbalance head-on.
Question: How can ASC leaders balance rising operational costs with stagnant or decreasing reimbursement rates to ensure financial stability?
Editor’s note: These responses were edited lightly for clarity and length.
Alejandro Badia, MD. Orthopedic Surgeon and Founder of OrthoNOW (Miami): The easy, and fair solution, is that ASCs must soon be paid on par with hospital ORs. Until then, given the increasing challenge of increasing overhead, ASCs must make this up with case volume. This means educating colleagues that many surgical procedures can be safely, and efficiently, performed in the ASC environment. Much of this is simply changing culture, habits and educating fellow surgeons.
Terry Brunazzi. Executive Director of Tri-State Orthopaedics & Sports Medicine (Pittsburgh, Pa.): Today’s healthcare environment presents unprecedented challenges. Costs continue to rise — labor, supplies, regulatory compliance — all while reimbursement rates are declining or remain flat. The focus remains on maintaining financial stability without sacrificing patient care.
Efficiency must be a top priority — streamlining workflows, optimizing staffing and controlling supply costs. At the same time, the focus is on growth opportunities and providing patients with low-cost, high-quality care, while expanding access and building relationships within the community to ensure consistent patient care.
Strong partnerships with payers remain critical. By using data on patient outcomes and experiences, it’s possible to negotiate fair reimbursement and adopt payment models that reward quality care, efficiency,and long-term value.
Through it all, one thing never changes: quality care comes first. Efficient operations and strategic growth are not just business imperatives — they ensure patients receive the best care while securing a sustainable future.
Greg DeConciliis. Administrator of Boston Out-Patient Surgical Suites: Unfortunately, this is the harshest reality we are facing. One strategy could be to truly partner with a manufacturer or distributor of products. For example, in orthopedics, if you can get standardization, you can have more purchase power from a particular vendor. More purchasing could lead to greater discounts, combatting the rising costs. Standardization, we all know, is very difficult. But, it is a process worth exploring with your surgeons. Perhaps it’s not the whole scale, but some surgeons may flip for the good of the center.
The other thought is to analyze your contracts. When was the last time you revisited your reimbursement? Do you have any leverage with the payers, and is it time to hire a professional to negotiate for you? The results could be extremely beneficial, and the fees to the professional negotiators short-term with long-term benefits.
The final solution is volume, which typically cures all. Bring in as many cases as you can, as long as they are cases where there is some margin. You probably know which case types those are, and determine a way to capture them. Is a block utilization study in line and can you redistribute time to busier surgeons.
Lauren Phillips. Director of Invasive Services at the Cardiac and Vascular Institute (Chiefland, Fla.): ASC leaders are facing increasing pressure as operational costs continue to rise while reimbursement rates remain stagnant or even decline. To ensure financial stability, leaders must focus on operational efficiency, supply chain management, and strategic growth. One of the most effective ways to control expenses is by improving efficiency in scheduling and staffing. Maximizing OR utilization, reducing turnover times and consolidating underutilized block time helps drive case volume without increasing fixed costs. Flexible staffing models, such as cross-training employees can reduce overtime while ensuring adequate coverage. On the supply chain side, cost control can be achieved through strong vendor negotiations that could include bulk pricing, bundle pricing or rebate programs.
At the same time, ASC leaders must work to protect and grow revenue. Strong revenue cycle practices including accurate coding, thorough pre-authorization and efficient denial management, help prevent avoidable revenue loss.
Physician and staff engagement is critical in sustaining these strategies. Transparency around financial pressures can encourage physicians to make cost-conscious supply choices and support efficiency initiatives. Cultivating a culture of continuous improvement among staff helps reduce waste and improve workflows.
ASC leaders must remain aggressive with cost management, smart revenue strategies, while engaging physicians and staff in a shared vision for sustainability. By focusing on efficiency, negotiation, and strategic growth, ASCs can continue to thrive despite today’s financial challenges.
Larry Sobal. CEO of Heart and Vascular Institute of Wisconsin (Appleton): Make sure that your revenue cycle is optimized to fully (and appropriately) capture reimbursement for everything you do. In other words, don’t leave money on the table.
Lisa York, RN. Executive Director of the Hunterdon Center for Surgery (Flemington, N.J.): ASC leaders have to remain vigilant with watching their spending, working out creative solutions with staff and vendors. Cap case pricing, non-monetary incentives for staff, improving morale and a culture that fosters teamwork. This task is becoming more and more difficult and owners are feeling the hit to their bottom line.
