Financial challenges at ASCs: How are leaders tackling them?

Six ASC leaders joined Becker's to discuss how their ASC is tackling financial challenges.

Question: How is your ASC tackling financial challenges right now?

Editor's note: These responses were edited lightly for clarity and length. 

Celia Smith, BSN, RN. Administrator and Director of Nursing at the Center for Surgery & Advanced Therapeutics (Spring, Texas): We are constantly reviewing opportunities for cost-savings and focusing on supplies and equipment purchases. We verify that we are being offered [group purchasing option] pricing on all purchases. We compare costs of items between the main distributors. In the operating room, we don't open an item unless it is absolutely necessary, not just because it is on the preference card. We even advise the doctors of comparable items that may be lower in cost. 

Sandy Berreth, RN. Administrator of Foothill Surgery Center Sansum Clinic (Santa Barbara, Calif.): This is a hard one. The ASCs I have recently been involved in are working to develop processes to attain that infamous financial stability; and I wish I could tell you the inventive ways to extend the dollar. Factors affecting the financial outlooks of the ASC are commercial and government payer contracts; prestige of the organization in the marketplace; the increase for annual salaries for staff; and physicians' ability to maintain their schedules. 

Michael Grant. Administrator of Surgery Center of Amarillo (Texas): Definitely an interesting time for ASCs with lots of different financial challenges. We have really tried to focus on three things: 

  1. Increasing our revenue per procedure by performing higher-acuity procedures such as outpatient bariatric weight loss procedures; orthopedic total joint replacements and sports medicine procedures; cardiology, focusing on cardiac rhythm management; and pain management procedures.
  2. Decreasing our supply costs by renegotiating vendor contracts and trying to streamline all providers to one or two vendors for each product category. By having a higher spend commitment with one or two vendors for each category, we are able to get better upfront pricing and a rebate structure in place.
  3. Cross-training our registered nurses to be able to perform multiple roles throughout the facility, so if we face staffing challenges we have multiple nurses that can work in recovery, preoperative, registration and the operating room. We are able to maximize staffing each day by having the staff cross-trained in different areas of the organization. This helps lower the use of pro re nata nurses and part-time staff and reduces staffing costs overall. We use several staff change roles throughout the day to maximize efficiency.  

Mark Spina. Administrator of North Queens Surgical Center (New York City): Our biggest financial challenge right now is finding adequate staffing and dealing with the ever-increasing labor cost associated with running the ASC, particularly on the clinical side of the business. Finding adequate RNs that are able and willing to work in a fast-paced ASC environment is challenging. This week, we had to institute a market-based adjustment to increase RN wages just to ensure we could keep the staff that we have. At the same time, we are not able to increase our contracts with commercial insurance companies more than 2 to 3 percent annually. This means that our profit margins will be squeezed by the increased labor costs, which are increasing more than the rate of increase for our insurance contracts.

Brenda Carter. Administrator of Wilmington (N.C.) Surgcare: Financials are unfortunately always something that have to be managed carefully in the ASC setting. For us, we are remaining vigilant on efficiencies, cost containment, reducing waste and negotiating for the best supplier-based discounts. Payers and reducing contracted rates still present the biggest challenge. The high Medicare and Medicaid populations in our area create the need to increase our case volumes, many with smaller margins, to meet the growing needs financially. Higher costs for staff, supplies and all other operational expenses create the need to manage revenue and expenses with equal focus and energy.

Andres Duran. Texas-based healthcare consultant: Employee retention, to ensure that employees are happy, and keeping new hire costs low. The other way to tackle financial challenges is to lower contracted rates with vendors and keeping inventory low to ensure costs are low.

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