Chris Bishop, senior vice president for acquisitions and business development at Blue Chip Surgical Center Partners in Cincinnati, provides 12 ways to maximize profits at your ASC.
1. Recruit more physicians. An ASC should always be on the lookout for more physicians. ASCs are rarely at full capacity, and even if they were, hours could be extended to increase capacity. Finding more physicians is a matter of networking, reaching out to the physician-owners' partners, competing groups and even surgeons in the doctors' lounge at the hospital. Are they playing solitaire as they wait for their scheduled slot in the hospital OR to be ready?
2. Increase volume of existing physicians. In many cases, surgeon co-owners are only bringing half of their eligible outpatient cases to the surgery center. Identify these surgeons and ask them why. Frequently is has to do with something that could be changed, such as buying a piece of equipment or using a different anesthetic.
3. Go to the practice. If you really want to find out why patients are going to the hospital rather than the ASC, go to the surgeon's practice. Sit down with the scheduler. Are all eligible patients being given the ASC as an option to the hospital? Ask the surgeons what they are telling patients. Ultimately, each patient's choice of surgical venue has to do with what the surgeon is telling them.
4. Extend hours to increase capacity. A very busy center should not be limited by the usual hours of operation. Physician-owners may be reluctant to extend hours but they will appreciate how it can improve finances. It does not have to be very onerous – maybe two Saturdays or a few evenings a month. Such time slots would be a great draw to patients who have a hard time getting time off from work. Younger surgeons who are just starting their practices would be interested in off-hours to build up volume.
5. Calculate what each case costs. Case-costing, calculating how much a center makes or loses on a case, is an effective way to convince surgeon-owners to avoid high-cost items. When surgeons are told they use three shaver blades, and they are shown the specific impact on the cost of the surgery, they have the opportunity to consider whether one shaver blade might have been sufficient. The information is at their fingertips.
6. Calculate down-time. Use the same methods to calculate how much it costs the OR to function per minute, based on clinical staff and other costs. For example, if the cost is $18 per minute, you can calculate how much is being lost per month by a surgeon who is chronically 10 minutes late for each operation. You can also see how much is lost by an unused slot.
7. Compress the schedule. Most surgery centers, even when schedules are fully blocked out, are not at full capacity. The paid clinical staff is waiting for the next case because a surgeon is not using all his block time. If this is happening routinely, the surgeon should be asked to give up the unused block time to another surgeon who will use it. Either part of the block each day or the whole block on a certain day could be handed over.
8. Close the ASC for a day. If volume is well below capacity, consider closing the center for a day and compressing all appointments into the remaining days. The business staff and scheduler still need to come in, but you lose the high expense of hiring clinical staff for a day. Clinical staff initially aren’t happy with this and one or two might even quit, but usually most of them accommodate to this change, either by getting part-time work or getting comfortable with a four-day week.
9. Release block time. Five business days before surgery, the scheduler should release unused block time for other surgeons to use. Send an e-mail to other partners or call each practice early in the morning to se if they can fill the slots.
10. Add a higher-paying specialty. Spine and bariatric surgery are two higher-paying specialties that present golden opportunities because they are just beginning to move out of the hospital. Retina is also moving out of the hospital, but it is still borderline in terms of profitability. Retina surgeons have to be fast or it will lose money for an ASC.
11. Regularly review payor contracts. Managed care contracts should be analyzed every quarter, paying close attention to opportunities to raise rates. Contracts may have been signed at below-Medicare rates or your costs may have risen. Have all figures on higher costs for each procedure assembled so you can effectively present your case for a higher reimbursement.
12. Be a tough negotiator. Since payors can dig in their heels in negotiations, be ready to walk away and go out-of-network for as long as 18 months so that the payor can understand how much more expensive hospital-based procedures are. A particularly savvy administrator can effectively negotiate contracts, but in many cases this work should be given to an outside consultant or management partner.
Learn more about Blue Chip Surgical Center Partners.
Read more guidance from Blue Chip Surgical Center Partners:
- Benefits of Not Carving Out Spine Implant Costs: Q&A With Beth Johnson of Blue Chip Surgical Center Partners
- Building Strong Anesthesia Partnerships in Spine-Focused ASCs
- Q&A With Dr. Joseph Stapleton, Anesthesiologist, Pain Physician and Partner at East Portland Surgical Center in OR
1. Recruit more physicians. An ASC should always be on the lookout for more physicians. ASCs are rarely at full capacity, and even if they were, hours could be extended to increase capacity. Finding more physicians is a matter of networking, reaching out to the physician-owners' partners, competing groups and even surgeons in the doctors' lounge at the hospital. Are they playing solitaire as they wait for their scheduled slot in the hospital OR to be ready?
2. Increase volume of existing physicians. In many cases, surgeon co-owners are only bringing half of their eligible outpatient cases to the surgery center. Identify these surgeons and ask them why. Frequently is has to do with something that could be changed, such as buying a piece of equipment or using a different anesthetic.
3. Go to the practice. If you really want to find out why patients are going to the hospital rather than the ASC, go to the surgeon's practice. Sit down with the scheduler. Are all eligible patients being given the ASC as an option to the hospital? Ask the surgeons what they are telling patients. Ultimately, each patient's choice of surgical venue has to do with what the surgeon is telling them.
4. Extend hours to increase capacity. A very busy center should not be limited by the usual hours of operation. Physician-owners may be reluctant to extend hours but they will appreciate how it can improve finances. It does not have to be very onerous – maybe two Saturdays or a few evenings a month. Such time slots would be a great draw to patients who have a hard time getting time off from work. Younger surgeons who are just starting their practices would be interested in off-hours to build up volume.
5. Calculate what each case costs. Case-costing, calculating how much a center makes or loses on a case, is an effective way to convince surgeon-owners to avoid high-cost items. When surgeons are told they use three shaver blades, and they are shown the specific impact on the cost of the surgery, they have the opportunity to consider whether one shaver blade might have been sufficient. The information is at their fingertips.
6. Calculate down-time. Use the same methods to calculate how much it costs the OR to function per minute, based on clinical staff and other costs. For example, if the cost is $18 per minute, you can calculate how much is being lost per month by a surgeon who is chronically 10 minutes late for each operation. You can also see how much is lost by an unused slot.
7. Compress the schedule. Most surgery centers, even when schedules are fully blocked out, are not at full capacity. The paid clinical staff is waiting for the next case because a surgeon is not using all his block time. If this is happening routinely, the surgeon should be asked to give up the unused block time to another surgeon who will use it. Either part of the block each day or the whole block on a certain day could be handed over.
8. Close the ASC for a day. If volume is well below capacity, consider closing the center for a day and compressing all appointments into the remaining days. The business staff and scheduler still need to come in, but you lose the high expense of hiring clinical staff for a day. Clinical staff initially aren’t happy with this and one or two might even quit, but usually most of them accommodate to this change, either by getting part-time work or getting comfortable with a four-day week.
9. Release block time. Five business days before surgery, the scheduler should release unused block time for other surgeons to use. Send an e-mail to other partners or call each practice early in the morning to se if they can fill the slots.
10. Add a higher-paying specialty. Spine and bariatric surgery are two higher-paying specialties that present golden opportunities because they are just beginning to move out of the hospital. Retina is also moving out of the hospital, but it is still borderline in terms of profitability. Retina surgeons have to be fast or it will lose money for an ASC.
11. Regularly review payor contracts. Managed care contracts should be analyzed every quarter, paying close attention to opportunities to raise rates. Contracts may have been signed at below-Medicare rates or your costs may have risen. Have all figures on higher costs for each procedure assembled so you can effectively present your case for a higher reimbursement.
12. Be a tough negotiator. Since payors can dig in their heels in negotiations, be ready to walk away and go out-of-network for as long as 18 months so that the payor can understand how much more expensive hospital-based procedures are. A particularly savvy administrator can effectively negotiate contracts, but in many cases this work should be given to an outside consultant or management partner.
Learn more about Blue Chip Surgical Center Partners.
Read more guidance from Blue Chip Surgical Center Partners:
- Benefits of Not Carving Out Spine Implant Costs: Q&A With Beth Johnson of Blue Chip Surgical Center Partners
- Building Strong Anesthesia Partnerships in Spine-Focused ASCs
- Q&A With Dr. Joseph Stapleton, Anesthesiologist, Pain Physician and Partner at East Portland Surgical Center in OR