1. Increase volume — just a little bit
As anticipated, on the heels of the lower Medicare reimbursement rates for GI in ASCs, revenue per case is down. In a sampling of endoscopy centers of varying size and Medicare volume, Physicians Endoscopy’s John Poisson and Barry Tanner report estimated annual reimbursements down from $18,027 (for a medium-sized center with Medicare making up 18 percent of volume) to $119,518 (“jumbo” center, 21 percent). At multi-specialty Algonquin Road Surgery Center in Lake in the Hills, Ill., administrator Dana McGrath, RN, MSN, CASC, reports that total net revenue per case for GI is down $36 per case for Medicare compared with 2007. (Her facility is also facing competition from two new GI centers within 10 miles of Algonquin Road Surgery Center, as well as migration of one physician’s cases to his office.)
While these figures may seem steep on their faces, they are not insurmountable with efficient utilization. The key is to add a handful more procedures per week.
“Volume is the key to a profitable center,” says Craig J. Bakken, CMPE, the CEO of Denverbased Rocky Mountain Gastroenterology Associates and Rocky Mountain Endoscopy Centers. “If you can improve throughput, you can sustain and even increase profitability.”
Estimating a conservative average reimbursement of $550 per case, just one case per day can go a long way toward making GI profitable: Five extra cases per week translates to $143,000. Conversely, assuming 15 cases could be performed in a block, leaving one room open for just one day costs an ASC $8,250; one open block weekly for a year would therefore cost $429,000 in revenue.
Mr. Bakken notes that one way to increase utilization of empty blocks is to consider opening them up to other types of cases that can be performed in procedure rooms — a new service line could inject a fresh revenue stream to your center, he says. Additionally, if your physicians have more cases to bring, it may be a matter of opening up more block time; No. 2 discusses one way to go about doing so.
2. Use objective methods to allocate block time
You attempt to divvy block time evenly among your physicians. Some will inevitably perform more cases in the time allotted than others due to differences in technique and speed. But what can you do when some physicians fill up and utilize all their block time and others do not?
“It’s really incumbent upon the board to carefully monitor, at least quarterly but preferably monthly, the utilization of all of the rooms that are operating and make reasonable adjustments to the physician blocks,” says Mr. Poisson.
The key is to avoid any perception of arbitrary block time decisions by developing a measurable method to determine who can request more block time and who should possibly have his time reduced. One such method, developed by an administrator at one of the Physicians Endoscopy’s-partnered centers, uses a composite score that is determined by the actual volume of procedures a physician brings to your facility added to the percentage utilization of his blocks. In a very efficient GI center, a good benchmark for morning utilization rate is 95 percent and 80 percent for the afternoon. Sixteen cases would be the benchmark for the morning and 12 for the afternoon. These figures would produce an ideal example composite score of 15.2 for morning blocks and 9.6 for afternoon blocks; your facility’s board should adjust these figures based on internal benchmarks to determine the target composite scores.
Under this system, physicians must be above the threshold in order to request more block time. If block time is available and works into the physician’s schedule, it is available on a first-come, first-serve basis. Physicians who consistently fall below the target may have some block time revoked. While physicians might not rejoice at having their block times taken away, the use of this measurable metric at least offers a concrete reason for change, can help serve as justification for reallocation of block time and may even serve as motivation. If physicians know that an unused block will affect their composite score, they may be more inclined to inform the facility when they’re going to be on vacation, allowing the center to give those available blocks to other doctors who are willing to fill them.
Further, if a physician is struggling to fill blocks on a regular basis, this can give the board an opening and an opportunity to discuss the cause of this inefficiency and potentially fix the issue. For example, if a physician is scheduling the right number of patients to fill the block but seeing regular cancellations, the center can consider taking the approach of airlines and overbook the block, planning for some cancellations, says Mr. Poisson. Or it might be an opportunity to look for ways to improve turnover times.
Note: Before reallocating any block time, make sure that any changes do not impact your quality of care. On paper, it may seem practical to take a block away from a surgeon and ask him or her to cover more cases in a single block, but you must find out if the reason why the surgeon is not filling the block times is related to a process you can change (reporting vacations, slow dictation in between cases, etc.) and not related to how they treat patients and perform procedures. You will definitely not want to put your surgeons in a position where they feel they must rush through and handle more cases just to keep their block time.
You will also want to avoid instantly rewarding more block time to surgeons who have not proven their ability to handle a larger caseload. Giving these go-getters parts of blocks rather than complete blocks initially will allow you to ensure their quality does not suffer as they take on more cases.
3. Achieve efficient turnover time
A target benchmark for a colonoscopy patient’s entire visit, from walk-in to walk-out, is about 97 minutes, says Mr. Poisson. A good benchmark to target for turnover time for ORs in between colonoscopies is four minutes, “butt to butt,” he says.
While keeping a low turnover time can help improve your center’s efficiency, you want to make sure that any effort to reduce your time does not sacrifice quality of care in the process. Good OR turnover is not a matter of speed but rather improving upon existing processes and strengthening teamwork and communication between staff members.
“There is a time requirement between patients in a well-run center that lets the doctor do his report, which typically takes two to three minutes,” says Mr. Poisson. “He’s going to go out to discharge a patient and take the necessary time, usually 3-4 minutes, to have that discussion with the patient and their designated escort.. By the time he’s done his report and discharged a patient, another patient should be ready and waiting in a room.”
Assuming a center is outsourcing its anesthesia, the patient should be ready for the physician by the time he or she enters the room. The physician will then pause for a moment to re-verify the patient name and scheduled procedure and then likely do the final patient consent review of the H&P in the chart; introduce the propofol, which will take effect in 10 to 20 seconds; and then the physician should be ready to insert the scope.
Here are two simple best practices to help you with room turnover:
1. For the first set of patients each day, pre-assess them in the OR. “Free up those admit bays to get your next round or two of patients all ready to go by initially using the OR as a bay,” says Mr. Poisson. “It makes total sense.”
2. Set up your admit and recovery bays so they’re identically setup with all of the necessary equipment and supplies for both admissions and recovery.
“This way, in the morning, when you typically have your influx of patients, you can use some of those recovery bays as admit bays and then in the afternoon, unused admit bays turn into recovery bays,” says Mr. Poisson.
Your staff should adjust the admit flow process based upon how long a physician takes in between cases, suggest Mr. Poisson:” If a doctor typically takes seven to eight minutes, adjust the workload. There’s no sense in having the patient waiting in the OR for five minutes with nothing to do.” In addition, when the patient is in the procedure room briefly waiting for the GI attending physician to arrive, it is critical that the CRNA and procedure room staff continue to monitor and observe the patient at all times.
4. Staff for efficiency of service and budget
Rocky Mountain Endoscopy Centers comprise three GI facilities in the Denver metro area performing about 22,000 cases total annually.
“Coincidentally, we have about 22 FTE, which works out to one per 1,000 cases each year,” says Mr. Bakken. “We don’t really manage the number strictly, but it is a number we have found to work thanks to external and especially our internal benchmarking processes. Facilities that are not taking advantage of benchmarking against other similar facilities are doing themselves a disservice and would benefit from doing so.”
By monitoring the number of nursing hours per procedure and total hours in the first center, Rocky Mountain was able to find appropriate staffing benchmarks and adjust according to case volumes as the subsequent centers with identical processes were opened and began to grow. Mr. Poisson notes that, if your staff hours per patient are greater than five, you should revaluate your staffing pattern or configuration.
With benchmarking, Mr. Bakken also found that the first center was over-reliant on RN utilization.
“You don’t need that much RN support if you can train and supervise the next level down. It varies across the country, but you can use LPNs, certified techs or nurse assistants, even EMTs — there are all kinds of people out there who have basic medical training who can be trained to assist,” he says. “When we started our first center, we lacked experience and benchmarking data, and we staffed up with a higher RN count than we ultimately ended up with in our third center. In center No. 1, we’ve basically added techs so the ratios now look a lot like what is the accepted level of staffing in center No. 3.
“We may never have seen that as clearly had we not benchmarked internally. It’s made a big impact on staffing costs without impacting on quality.”
5. Look to ancillary costs
While the economy has been mired in a downturn, charges for utilities in particular are increasing faster than the expected cost-of-living rises would dictate.
“The costs of heat and power and cleaning are all being pushed up,” says Mr. Bakken. “There’s not a whole lot you can do when the utility bill comes — you can’t take on the electric company. You just have to pay it.”
He recommends finding ways to shed space — so that you’re not paying to power, heat, cool and provide water to — unused areas, or to find alternate uses for little-used space to aid adding revenue-producing procedures. You could also “update heading and air conditioning systems, upgrade windows and insulation — all the things a homeowner would do, depending on the age and quality of your building,” says Mr. Bakken.
Mr. Bakken recently went through a variety of his service contracts, including health insurance, office supplies and custom printing, and put them out for bids. Without exception, he says, the bids all came in under what the centers were paying.
“We were pleasantly surprised, but saved over 20 percent of office supplies and 15 percent on custom printing,” he says. “You might not even think of these as areas in which you can save, but there are opportunities out there, and they can help offset some of the things you can’t control as much. Don’t be afraid to move your business to the lowest qualified bidder.”
Mr. Poisson also recommends annually renegotiating these contracts for ancillary services, including repair and maintenance agreements, linens and laundry.
6. Examine capital equipment expenditures
Since January 2006, Ms. McGrath spent $32,000 on scope and $16,000 on equipment repairs. This spring, she’d had enough of the scopes, which had been bought in 2002.
“I needed to purchase new equipment this year; our scopes and automatic scope processors were outdated, repairs were becoming cost-prohibitive and the service agreements on the equipment were no longer in effect,” she says. “Buying new equipment was tough decision, because volumes and net revenue are decreasing in GI, but we decided to take a chance.”
Algonquin Road bought four new scopes on a costper- case basis; considering that repair bills were likely only to go up as the equipment got older, the money saved could well cover the price tag.
To avoid falling into such a situation, Mr. Poisson recommends instituting an equipment replacement schedule. Mr. Bakken further recommends examining all manufacturers’ offerings to secure the best deal for your center.
“If you and your physicians are willing to consider the options, there are savings to be had,” he says. “Bid out replacement or new equipment and put the manufacturers to the test. You may give up for some period of time some aspects of compatibility and interoperability, and there’s certainly a cost to that, but my reading of the situation is that facilities are securing better deals when they start to consider alternatives.”
Contact Stephanie Wasek at stephanie@beckersasc.com.
