Q: What types of data and comparisons do you track on a regular basis? How do you then apply this information to daily operations at the center?
Neal Maerki: On regular basis — weekly and monthly — we look at many parameters. For revenue by cases, we look at the number of surgery days in the month, the cases per day and net revenue per case. For revenue management and collections, we look at days in A/R, A/R aging more than 90 days and collections as a percentage of net revenue. We also look at supply expenses per case, personnel expenses per case, “other” expenses per case, total expenses per case, clinical hours per case (in minutes) and the EBITDA operating margin. We also look at all these categories for a rolling 12-month period.
Monthly, we compare projected case numbers by specialty as compared to our revenue model. As we are a multi-specialty center (with all specialties except urology), we also compare a single specialty’s mix — such as ophthalmology, pain management, GI, etc. — as an overall percentage of total versus all other specialty mix. We also track payor mix by percentage of cases and percentage of billings. All these areas are incorporated into our revenue model and budget projections. Payor mix is very helpful in looking forward for managed care contract negotiations.
Q: What methods do you use to track the information in your weekly financial review? How does this information help you adjust operations to improve overall profitability at your center?
NM: The weekly financial review is prepared by our accountant. It shows cash on hand including reserves at that point in time, deposits, AP runs and payroll. It also shows A/R aging at 0-30 days, 30-60 days, 60-90 days and more than 90 days by dollar total and percentage of overall A/R. I also have a quick dashboard for cash and collections/revenue management. In addition, I receive the daily deposit and monthly totals and daily average, along with a projected average for the next one month and two months based on the previous month’s billings. This helps me to be certain collections are accurate and helps to discuss with business office manager if I don’t see adequate collections as compared to expected collections.
Q: Communication has been an important factor in the success of your ASC. How do you communicate information to your board/staff? How does this assist you and your staff members in making changes for the benefit of the ASC?
NM: One way was to post our staff and physician satisfaction surveys outside our staff lounge, with all responses and comments and let the staff and physicians read what they wanted. It was a lot of information. We are working on improving communication by trying to relay information to the staff in multiple ways: e-mail, mailboxes on site and our Intranet site. We are using these methods to relay information discussed at safety meetings, QA and IC meetings. We also post information on a couple of white boards in the hallways.
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