At the 20th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 25th, John Poisson, executive vice president and strategic partnerships officer of Physicians Endoscopy, shared six different areas of focus to maximize profitability of GI centers.
1. Patient safety and quality. “This is all about creating a culture of accountability,” said Mr. Poisson. Staff and physicians should be held accountable for reaching certain benchmarks, and metrics should be monitored daily and weekly, not just monthly or quarterly. The GI Quality Improvement Consortium is an excellent way to share and obtain benchmarking data, he added.
2. Revenue optimization. Revenue optimization is critical to maintaining or improving GI profitability, and a key way to optimize revenue is through renegotiating commercial payer contracts. In addition to simply negotiating reimbursement increases, GI providers in certain markets are improving margins by entering into bundled payments for GI procedures, which include facility, physician and anesthesia fees. When negotiating contracts, Mr. Poisson recommended meeting with payer representatives face-to-face and bringing a physician to the negotiation table, along with an administrator.
3. Expense reduction maximization. “As you go into shared risk-type arrangements, your costs are going to be critical,” said Mr. Poisson. Focus on bringing costs per procedures to at or below industry benchmarks. Typical CPP for the various expense categories are:
- Supplies – $35 per procedures
- Equipment - $8.50 per procedure
- Uniforms and laundry - $5.50 per procedures
- Drugs and medications $4.50 per procedure
- Office supplies - $2.50 per procedure
Additionally, a benchmark for staffing hours per procedure (assuming propofol sedation) is 4.7-5.1 staff (non-physician) hours per procedure.
4. Physician recruitment. “Five years ago, 80 percent of doctors coming out of fellowship went into private practice; this year more than half go into institutions [and hospitals],” explained Mr. Poisson. “Recruitment is getting harder.” As a result, practices must do everything they can to provide a special experience to candidates and differentiate themselves from competitors.
5. Marketplace positioning. “In today’s market, you have to look five years out,” he explained. Simply having a budget and strategic plan for a year out isn’t enough in today’s tough environment. He encouraged GI groups to consider partnerships with hospitals and health systems, especially in markets where there is consolidation and efforts to integrate.
“Right now you have leverage because right now you don’t need to do it. In the future, you may need to do it,” he said.
Additionally, ensure physician owners are involved and engaged with the center’s success. Hold physician planning retreats offsite one or two times per year to succession plan, determine the center’s strategic plan and discuss partnership opportunities.
6. Good citizenship. Finally, Mr. Poisson encourages centers to provide charitable care of some sort, either completely free of charge through donated facility and physician time or through a sliding-fee scale based on charitable need.