5 ASC organizations with great cost-cutting strategies

Here are five organizations with innovative cost-cutting initiatives.

If you would like to recommend another organization for this list, contact Anuja Vaidya at avaidya@beckershealthcare.com.

Four Corners Ambulatory Surgery Center (Farmington, N.M.). According to executive director Stu McFadden, his ASC initiated a salary cap program last year and that's helped his bottom line.

Since Four Corners, a 17-year-old, 45-staff facility has given its employees sizable raises every year, something needed to be done in order to cut costs, especially in regard to its relation to net revenue, he said.

''When I arrived in 2013 our total staff salaries as a percent of net revenue was 28.4 percent,'' Mr. McFadden said, adding that was well above the national benchmark goal of less than 25 percent.

So, Four Corners turned to the Ambulatory Surgery Center Association's 2012 ASC Employee Salary and Benefits Survey, which collects national and regional data on 19 ASC positions.

That survey then was used to find a mid-point for his ASC's pay range and then capped at 120 percent of the mean.

''We found that almost 80 percent of our employees earned higher than the mean,'' Mr. McFadden said.

Four Corners took it a step farther and looked at their administrative staff. As it turned out, three met the Fair Labor Standards Act test and became exempt employees.

''This alone will save us over $23,000 in overtime pay in 2015; and these employees are happy with the added freedom and exclusivity that brings,'' Mr. McFadden said, giving the example employees enjoyed no longer punching time clocks.

With the wrangling, he said, the ASC was able to provide 13 salary-capped employees a bonus, as well as meet the benchmark goal of less than 25 percent of net revenue for this fiscal year.

DISC Surgery Center at Newport Beach (Calif.). The surgery center has implemented a HVAC ((heating, ventilating and air conditioning) usage reduction initiative. The initiative involves manipulating and adjusting the air handler units' override parameters as well as keeping a close eye on surgery schedule and ensuring close communications with staff members, which allows surgery center staff to effectively run and shut down unoccupied sections within minutes of completing a procedure.

"Depending on the surgery schedule, during slow times like January and February, we are able to cut back a standard (auto) controlled schedule by over 70 percent," says Tyler S. Gibbs, materials and plant operations manager at the center. "Most centers with electronic building controls will set an automatic schedule which turns the HVAC system on and off before and after their normal business hours. Our approach takes active monitoring of the surgery schedule and communication with staff, but in the end it pays off big."

However, when cutting back HVAC usage, the surgery center is careful to exclude the sterile corridor, according to Karen Reiter, DISC's COO.

"The sterile corridor always remains in compliance with surgical instrument manufacturer's recommendations regarding humidity and temperature," she says.

The 10,000-square-foot surgery center is a part of DISC Sports & Spine Center, and it offers minimally invasive spine surgery and pain management procedures. The entire surgery center has separate hi-flow HVAC systems. It is accredited by the Accreditation Association for Ambulatory Health Care.

Diagnostic and Interventional Surgical Center (Marina del Rey, Calif.). The ASC focuses on cost cutting in a number of ways, including "draft mode" toner reduction.

"Toner is typically one of the two highest expenses in the office supply category. Paper is usually number one, however without implementing an EMR, you aren't going to be able to do much with that unless double-sided printing isn't already standard throughout your organization," says Tyler S. Gibbs, materials and plant operations manager at the center.  

With the toner reduction initiative, the center has been able to immediately reduce its toner usage by 50 percent. This was achieved by setting all in-house printers to draft mode, which inherently makes prints come out slightly lighter and with a little more grain, according to Mr. Gibbs.

"The typical center that utilizes in-house printers won't consider setting printers to draft mode because it does not provide the best quality print. However, if the documents being produced are only going to be seen by company staff and the document is only used and thrown out or filed in records, quality may not need to be the top priority," he says. "We have yet to receive a complaint since implementing this in our center."

The center, a part of DISC Sports & Spine Center, is focused on providing treatments for orthopedic and spinal disorders. Opened in 2006, the surgery center encompasses 7,200 square feet. It is accredited by the Accreditation Association for Ambulatory Health Care and includes three operating rooms.
Nueterra Healthcare. According to Karen Howey, a member of the operations team at Nueterra and former administrator of the Beaumont Macomb (Mich.) Township ASC, the company's goal is to implement standard cost-cutting initiatives at all its centers and strive for consistency.

"New cost savings are hard to target as we are continually monitoring costs in all areas each and every day," she says. "We monitor physician's reference cards regularly as these tend to be a huge obstacle in reducing cost."

Nueterra holds monthly cost savings meetings that include a group of individuals who have direct experience with the supplies. In these meetings, new items are reviewed that may be available to replace high-cost items in use. Current items are also reviewed to see if ordering can be reduced or put on consignment.

"Finally, we outline items we can approach the physicians with that may be changed," says Ms. Howey. "I feel preference cards are commonly overlooked in ASCs. There is a lot of focus on ordering and cost per case, but what is key is to have up-to-date, accurate preference cards. My advice to other ASCs is to educate staff — all staff! Hold regular meetings and make cost something that is discussed all the time."

Nueterra Healthcare focuses on partnering with physicians and health systems to develop and provide management services for healthcare facilities — such as hospitals, ASCs and GI centers among others, in the United States and abroad. It includes an international arm, Nueterra Global Alliance, which focuses on projects in Latin America and the Caribbean Region.
Surgery Center at Pelham (Greer, S.C.). The surgery center has moved to an online pre-registration process to allow for reduced staffing in reassessment, according to Bill Hazen, administrator of the center.

"[To ensure cost-savings] get your employees involved with profit sharing, this way they have a stake in the game. We distribute 5 percent of profits equally to all employees quarterly. The best money we have ever spent," says Mr. Hazen.

The surgery center offers surgical services in numerous specialties, including orthopedics, ENT, plastic surgery, urology, OB-GYN, gastroenterology and general surgery. It is a joint venture between Spartanburg Regional Healthcare System and a group of local physician investors. It is licensed by the state of South Carolina and Medicare.

More articles on ASCs:

AAAHC accredits Frisco Ambulatory Surgery Center in Texas
ASC stock report: 5 key company updates — Feb. 13
6 recent physician-owned ASC openings, plans

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