5 Physician Statistics ASCs Should Track and Benchmark

Brian Brown, regional vice president of operations of Meridian Surgical Partners, identifies five ASC physician statistics to track and benchmark and shares some insight into what surgery centers should do with the data.

 

1. Case volume by physician. Mr. Brown says this should be examined monthly, and ASCs should also have 12 months of trailing case volume data when gathering and examining monthly financials. "What we're looking for is practice trends within the individual physicians," Mr. Brown says. "Are their practices growing? Are they losing referrals? Where are their case trends growing?"

 

By studying this data, you will more likely identify if you have physicians that want to reduce their caseload, perhaps in preparation for retirement; if physicians are sending more of their cases to the hospital; and to identify the young physicians who are most likely to drive the success of the ASC in the future. "These are the guys we can put our stock in and bank on," Mr. Brown says. "They're the ones you can put your focus into as to what is going to be their needs in the future of their practice and ASC."

 

2. Total net revenue by physician. Like case volume, Mr. Brown says you should track this monthly and also examine the previous year's worth of data. "With this figure, we'll look at revenue by physician … and if one physician is doing the same case number as another but one surgeon's revenue is way ahead of the other, we're looking at that and working to identify what it is that physician is doing that the other is not."

 

This is a great way to examine the types of cases each physician performs in the same specialty, he says. "Just because you have orthopedics as specialty, it doesn't necessarily guarantee you high reimbursements. If your physicians are performing a majority of hand cases or simple knee arthroscopies, your total revenue may be lower than you would initially expect just looking at case volumes with 'orthopedics' as the specialty next to it, he says. You can also evaluate the payor mix of each physician by analyzing total net revenue.

 

3. Revenue per case by physician. By comparing revenue per case by physician by specialty, you will most likely observe significant practice patterns causing differences in reimbursement per case. "In pain management, for example, if you have one physician that's receiving $500 per case reimbursement and then you have another pain physician who is getting $750 per case, then you're going to want to look at those cases," Mr. Brown says. "In pain, you can do one level injections, two levels of injections, three levels. All of a sudden you're going to start to find that one surgeon is more advanced in techniques than another surgeon." Also, in some pain cases, surgeons will use fluoroscopy while others will not, he says. Those that use the C-arm typically receive higher reimbursement than those that do not use fluoroscopy, and examining and comparing revenue per case will help reveal such differences.

 

After identifying what is causing the differences in revenue, you can visit with your physicians and talk to them about their techniques, Mr. Brown says. "If you present the numbers to physicians, sometimes they'll be interested … to know they can get more money on the physician side as well, and that may change their technique."

 

4. Supplies per case by physician. Mr. Brown says ASC should look at supplies per case for physicians by like procedures. He suggests ASCs case cost these procedures and compare costs between physicians. One of the better ways to bring about change is to share this data with physicians, but he says you should not identify the physicians by name when doing so. Mr. Brown suggests ASC "blind the case cost," which means identifying physicians by letter or number (e.g., Dr. A, Dr. B, Dr. C).

 

"For example, let's say you have three ophthalmologists in your ASC," he says. "You have one that's running about $400 in supplies per case, one that's $300 and one that's $550. If you put those figures in front of [the surgeons], they're going to figure out who is who very quickly. When they do that, they never want to be the highest cost physician; they don't want to be the one that's costing the partnership money unless it's a valid reason.

 

"For example, when it comes to cataracts, you're talking about a fairly straightforward procedure that can be compared very easily," he says. "If you have a physician using a lot of high dollar supplies like your viscoelastics, there are different ones that cost more than the others; or maybe the lens they're using costs more than the others; it stands out fairly quickly."

 

By sharing the data and what's driving the cost differences, physicians will be more likely to make similar supply choices as their partners. "That really produces some healthy discussion," Mr. Brown says. "Whenever they're talking peer-to-peer, they can usually convince each other about the quality of products and they'll often switch (to a lower cost supply)."

 

5. Contribution margin by physician. This figure takes into account the other four statistics discussed. It's the collectible revenue from the case, the variable supplies and variable costs for the case which would include your direct labor as well, Mr. Brown says. "Then you come up to what is the contribution of that case to the partnership (before you apply any overhead)," he says. "That's what that case is contributing to the profitability of the center. We can really hone it down and see if there's a physician that's break-even or less; then we can get into those numbers and figure out why those cases not being profitable to the center. Is it supplies? Is it that cases take too long? Is it the reimbursement of the case?"


One example Mr. Brown has seen this work well is for GYN physicians performing ablations. Thermal ablation has a disposable supply that costs around $1,000, he says. That case has a Medicare reimbursement rate of around $1,100-$1,200, depending upon where in the country you are located. Once you included other supplies used on top of disposable supply and add in the direct labor costs associated with the case, you're more than likely losing money and that's even before overhead.

 

"While we may not be able to do those Medicare cases in our center but we'll try to work with our commercial payors and see if we can get a carve out for that supply item or for that CPT code," Mr. Brown says. "We ask if they will pay us $2,500 instead of $1,100-$1,200. That takes into account the $1,000 supply item and now you have a very nice, substantial contribution margin. The doctor didn't have to change anything, we just worked to obtain a carve out and then that case becomes a very profitable case."

 

This can also help to identify physicians who are performing many highly profitable cases the ASC should work to ensure those cases remain in the ASC. "What you want to be able to achieve is a certain contribution margin at the end of the day from these physicians," Mr. Brown says. "Let's say they have one of those Medicare cases they were going to lose money on but they had four other commercial cases. Why inconvenience our partner and make them go to the hospital to do one case versus coming to the ASC" and performing all five of the cases as their book of business, a book of business that is highly profitable for the ASC and convenient for the physicians and their patients."

 

Learn more about Meridian Surgical Partners.

 

Read more insight from the leadership team of Meridian Surgical Partners:

 

- 6 Best Practices for Collecting Payments From Patients

 

- Developing and Implementing an ASC Incentive Program: Q&A With Sarah Martin of Meridian Surgical Partners

 

- How Quality Reporting and Information Technology Requirements Will Impact ASCs

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