Dr. John Byers: 4 Priorities for ASC Physician Investors in 2012

Physician leaders are a crucial part of any surgery center. Far from just being a source of cases, physicians can help with managed care contracting, vendor negotiations, quality improvement projects, financial analysis and physician recruitment — and any great surgery center should have a few physicians involved in operations. John Byers, MD, medical director of the Surgical Center of Greensboro (N.C.), managed by Surgical Care Affiliates, discusses four priorities for ASC physician investors this year.

1. Work to decrease implant costs. Dr. Byers says surgery centers can only do so much to increase reimbursement; the real task ahead is controlling costs. He says this year, his surgery center has decided to focus on reducing implant costs. "We need to try and get the implant companies to ratchet down their unbelievably high margin," he says. "As far as I can tell, this is the only remaining industry in healthcare that makes such a high margin on their products." He says the surgery center plans to hold a meeting with all its orthopedic physicians to discuss how much the center spends on implants and how costs break down per surgeon.

He says part of the challenge is convincing physicians to change implant brands, which can be a tough sell for an ASC administrator. "Surgeons have big egos, and they're not necessarily going to listen to an administrator," he says. While a surgeon might tell an administrator that he can't use an implant due to clinical reasons, he might not be so confident in using this excuse with another physician. With the surgeons on board and willing to use alternatives, we can utilize SCA's economy of scale and S4 program to analyze case and surgeon cost in order to bring competition into the mix and hopefully lower spend.  

2. Control your relationship with vendor representatives. Vendor representatives can have an adverse effect on surgery center costs by convincing physicians to adopt more expensive products, Dr. Byers says. He says one of his center's priorities this year is to loosen vendors' grip on physicians.

The center will create an implant committee to increase transparency around implant costs in the center, then present the data to vendor representatives. "We're going to go to these specific reps and show them we're organized, that they can't go to Doctor A, B and C separately and whisper in their ear that they need a certain product," he says. He says presenting a unified front should demonstrate the center is serious about negotiating lower costs. Also limiting the general entry of the sales representatives into the center can be helpful and our general partner provides a web based access solution that manages some of this problem.

3. Concentrate on quality issues at your center. Dr. Byers says Surgical Care Affiliates, the surgery center's general partner, is actively involved in the process of developing quality measures for the ASC industry. "[SCA CEO] Andrew Hayek has made a positive spin on these requirements by working with the government from the ground up and proposing some of these quality measures to the government," he says. "Thus they have accepted many of them as legitimate, good measurements of quality, and the centers that are already measuring this are going to be way ahead of the game."

He says his surgery center is currently measuring falls, transfers, burns, wrong-site surgery, infection rates and time of antibiotic infusion. He says the center recently discovered it had a fairly high hospital transfer rate of children undergoing simple adenoid surgery. "When we dug into it and analyzed the data, we found it was a screening issue and that we were admitting an abundance of poorly treated reactive airway children into the ASC." He says the surgery center has since created parameters for its screening process to account for children with asthma.

Dr. Byers recommends surgery centers emphasize quality by forming a subcommittee through the medical executive committee. His surgery center chose several anesthesiologists, ENT physicians, and a nurse anesthetist to review the charts and formulate a strategy which helped the team work together to improve the screening process.

4. Plan for drug shortages at your center.
Dr. Byers says many of his colleagues are suffering from nationwide drug shortages, which have plagued the healthcare industry for the last several years. The greatest shortages are affecting anesthesia and cancer drugs —a problem for surgery centers since anesthetics are critical and many ASCs lack the resources to stockpile drugs. "Physician leaders need to get in touch with the FDA, because that's the only way the pressure gets built up to take care of these shortages," he says. "What I perceive as the problem is that nobody really wants to make a big deal out of this locally, because nobody wants patients to hear there's a shortage of anesthetics."

He says his surgery center has held several meetings with its anesthesia group to educate the providers about "best practices" during the shortage. "There were a lot of anesthesiologists and CRNAs that were still drawing up 15 different drugs and laying them on the back table, where they sometimes had to be discarded," he says. "We really emphasized that you don't need to draw a drug up ahead of time — it only takes 10 seconds and we want to save it if it's not used." He says the surgery center has already saved money by being careful with anesthesia drugs, and in some cases has substituted safe alternatives for anesthetics in short supply.

Learn more about Surgical Care Affiliates.

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