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How can ASCs optimize cost-cutting efforts? 3 tried-and-true strategies

Cost-cutting is vitally important yet can be maddeningly elusive. For those looking for a good place to start, here are some of the best tips administrators have for identifying ways to reduce costs and keeping them down. The three administrators quoted here are featured in this issue of Becker's ASC Review for having successfully innovative cost-cutting at their centers.

Be methodical

"My thoughts on this: make sure you take a methodical approach to managing your costs. Track your expenses, compare costs to benchmarks and target opportunities for savings. Looks for trends and/or spikes in cost areas, and ascertain if savings can be gleaned," says Andrew S. Weiss, CASC, administrator of The Endo Center at Voorhees (N.J.).

He also recommends an effective materials management plan, especially as materials are such a large expense. "Elements to include: accurate par levels that maximize inventory turns, a three-way matching system to ensure suppliers are delivered what was ordered at the agreed-upon price, a physical inventory at least annually and a mechanism allowing the flexibility to adjust order quantities to match case volume," he says.

Know that it takes a village

Bill Hazen, administrator at the Greer, S.C.-based Surgery Center at Pelham, encourages collaboration in cost-cutting ventures: "Employee bonuses make certain all employees (and employee owners) watch cost," he says. He also advocates for staff and physician education. "Compare doctor against doctor to help them understand cost, and be aware that accurate live cost accounting is useful for education physicians and staff," he says.

Fostering inclusive competition is key

Keith Smith, founder of the Surgery Center of Oklahoma in Oklahoma City, says healthy competition is the key to spurring the innovation that drives long-term cost-cutting efforts. "Many, if not most, of the new efficiency strategies have come from our operating room staff, each of which has been readily embraced by the surgeon partners, as it is to their advantage as owners to see cost-saving ideas implemented," he says, noting that distributing supply and implant costs for procedures among partners at partnership meetings is also commonplace.

"This healthy competition has been a key to the success of our online pricing initiative, as inefficient or wasteful practices can easily eat away at any marginal profit generated … the efficiencies we have realized are to a great degree the product of an engaged and incentivized staff," he says.

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