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Challenges driving innovation for ASCs — 8 key observations

Here are eight observations from Jeffrey Flynn, COO and administrator of Gramercy Surgery Center and Gramercy Healthcare Management in New York City on the biggest challenges and opportunities in the ASC field today.

1. Consolidation within the industry changes cost per case. When device companies merge with each other, the implant costs could fluctuate. In one example, Mr. Flynn noticed the implant for an orthopedic case went from the contracted $110 per implant to $450 per implant after two companies merged.

"On Medicare cases, we stood to lose $340 of income per case," says Mr. Flynn. "Then we had to consider whether we could still do these procedures or whether we'd have to look for alternative implants for surgeons to perform those cases."

The insurance company mergers can also make a difference; if two companies in the same region merge, contracted rates could either go to the lowest or highest rate between the two, depending on which company acquired the other.

2. State legislators and agencies are making payment changes without notice. The pressure to reduce costs in all aspects of healthcare coverage could affect key ASC specialties and reimbursement going forward. For example, in Connecticut the state legislature voted in a budget with a 6 percent tax on ASCs at the 11th hour. In New York, workers compensation and no fault rates for pain management procedures dropped 70 percent overnight.

"The Workers Compensation Board had an emergency meeting and came back saying as of Oct. 1, the basic epidural injection for workers compensation would go from $1,266 to $295," says Mr. Flynn. "You can't make money on cases like that. Since New Jersey doesn't have a fee schedule, there are some New York physicians taking cases to centers there. That impacts our case load and recruitment potential."

3. Clinical nursing leaders see their role becoming more administrative. The requirements for data gathering are ever-increasing. Most recently, the CDC requires data on flu shots among healthcare workers. At ASCs where the clinical director is tasked with gathering and organizing this data reporting, the job is becoming more administrative and less clinical.

"Our clinical director liked being in the operating room and teaching in the OR, but now between the new organization of tracking the flu shots and other administrative tasks, she became officially out of the OR," says Mr. Flynn. "She found a different job because she wanted to keep up her clinical and medical skills."

If ASCs don't participate in required data reporting, there is a 2 percent Medicare reimbursement penalty. But it's a complicated process to organize the data gathering and there aren't many automated systems designed for the ASC setting.

4. Automated technologies are more refined for ASCs, but there is room for growth. The electronic medical records and other technologies to gather and track data are becoming more sophisticated, but there's still room for improvement among ASC technologies. Instead of waiting for vendors to develop what ASCs need, some centers like Gramercy are developing their own programs for efficient workflow.

"Surgery On Time is directed solely to the ASC and can populate the case based on who is involved in the case," says Mr. Flynn. "The technology can schedule all cases and everyone who is involved — from the nurse to the surgical techs and anesthesiologists — and you can see who you work with on any particular day. We needed a technology where everyone could look online and see where they're supposed to be. It's particularly helpful if there is a disaster, like a hurricane or snowstorm, and we can access the information from off site."

5. Patient information and payment collection is becoming more important. ASCs that collect patient histories and data beforehand are more efficient on the day of surgery and avoid preventable case cancellations. They are also more likely to achieve full payment from the patients if the patients know how much they owe upfront.

"We've shifted staff to work on evenings and weekends to call patients. A lot of our patients work during the day and don't take our calls during the day so we contact them when they're available," says Mr. Flynn. "We provide cell phones for our staff to call from home. That's an added expense, but it's necessary. The cancellation rates go up when we aren't doing it."

The opportunity to speak with a nurse before surgery is also valuable; Mr. Flynn found patients are more comfortable speaking to nurses and will tell nurses about issues they don't discuss with their surgeon.

6. Postoperative phone calls are increasingly important. The postoperative phone calls make sure the patient remembers discharge instructions and can catch issues before they fester into complications or bigger problems. These phone calls can also gather information about the patient's experience and feedback on what the center can do better.

"You never know what people think of the center until you ask, and they might not refer a friend because of a particular issue," says Mr. Flynn. "We had one patient that complained there wasn't any music in the lobby and that patient didn't like the TV. But then we found out during the phone call the real issue was with the patient's escort and not the lobby. We've surveyed patients and most reported they wanted a TV in the lobby while they sit there and wait."

Other times taking the initiative to explain why a patient request isn't honored can make all the difference. For example, one patient requested to have the IV in her left arm instead of the right, but because of previous issues she was contraindicated. Mr. Flynn explained why it was necessary to place the IV in her left arm and she was happy with the procedure.

"There are little things we can do to stop issues right away," says Mr. Flynn. "Nothing good comes from an angry patient."

7. New ASC owners coming into the market might not understand the intricacies — and that could hurt everyone. With ASCs expanding across the country, there are physician owners and management companies coming into markets without an understanding of the unique landscape. If the new ASC is poorly managed or undercuts others, it could bring everyone down.

"There was one group that came into New York and didn't get into in-network contracts for nearly a year," says Mr. Flynn. "The hospital wasn't able to achieve the rates they anticipated. Then they wanted to redo their shares and solicited surgeons who were already owners in existing ASCs that aren't able to invest in new centers."

8. Collaboration with other centers can build prosperous relationships. The surgery centers in New York that have been around for a while have a close-knit relationship and share per diem staff to benefit everyone. For example, one center that has a busy Monday and Tuesday might share per diem staff with another center where the physicians perform more cases on Thursday and Friday.

"We try to promote the atmosphere of helping each other," says Mr. Flynn. "We've had that with the hospitals as well. One of the biggest mistakes as we are moving to the future is to view hospitals as adversarial because they aren't viewing us as adversarial anymore. There are certain cases that don't make money in the hospital, so it makes more sense for those cases to go outpatient."

More articles for surgery centers:
11 new outpatient surgery centers in October
The state of the ASC industry: Key thoughts from SCA CEO Andrew Hayek
18 statistics on ASC case volume

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