1. Case volume scheduled by day
“As we see it, like other businesses, it all starts with volume,” says Boyd Faust, CPA, chief financial officer for Titan Health. “The center must estimate appropriately the timing and volume of caseload and apply the adequate resources to perform the cases expected. This gets back to identifying the statistic that allows the center personnel to act upon it appropriately. In this case, the case volume scheduled by day is the appropriate forward looking statistic. This is updated daily.”
2. Actual cases performed per day
“On the back end, we measure the actual cases performed per day on a weekly and monthly basis,” says Mr. Faust. “A per-day figure is used to normalize the statistic since each month the number of available surgery days varies slightly and thus throws off a comparison of just the gross total case figures on a month-to-month basis. In some situations, such as coming up this fall, the number of days varies by five (October has 23 days versus November with 18). On a center doing 20 cases per day, you might think you had a terrible November if you performed 360 cases when you did 460 in October.”
3. Cases performed each month
4. Cases per room per month
“This helps track the utilization of the available OR and procedure rooms,” says Mr. Faust. “We recommend that this statistic be evaluated as the center considers adding physicians and new specialties.”
5. Cases performed by physician
“Look for trends,” says Joseph Zasa, JD, a partner and the CEO of Woodrum/ASD. “Obviously, the doctors take vacations, but look at a trending report to see if you are losing business and ask why. It could be issues with the equipment or staff.”
6. Cases by top CPT codes
Along with cases performed by physician, these two statistics can signal changes requiring a different clinical staffing model and a change of the medical supply needs of the center, says Mr. Faust.
7. Revenue per patient
Tracking this will allow you to “spot changes in mix of cases or billing/coding issues,” says Mr. Zasa.
8. Staffing hours per patient
“This is mix and specialty dependent,” says Mr. Zasa. “It is a key staffing benchmark.”
9. Payor mix trending
“A movement toward more cases with a certain payor will require the center to evaluate the financial impact, which can lead to renegotiation of contracts or, in some cases, may lead to contracting with a new payor that the physicians have begun to do a significant amount of volume with,” says Mr. Faust.
10. Supply cost per patient
Segregate this data by implants and disposables/drugs, suggest Mr. Zasa. “It is a mix dependent benchmark but can point to issues inherent with supply management and inventory control.”
11. Rate per case
“Once again, similar to other businesses, a center’s top line is dictated not just by volume but by rate as well,” says Mr. Faust. “Thus, centers should monitor their rate per case.”
Some do this in total for the center, he says, but at some point a center will want to account for the…
12. Rate per case by specialty and procedure type (by CPT code)
“Without this, you cannot perform case costing (cost per case by CPT code), which is vital to understanding your center’s business profile (and) how much operating profit do you make per case type,” says Mr, Faust. “We often find centers surprised to discover that a procedure that they are doing such a high volume of is actually costing them money.”
13. Accounts receivable (A/R) days
“The calculation we use is actual net A/R divided by daily net revenue for the past 61 days — use the last two months revenue and divided by 61,” says Mr. Zasa. “Our centers run 40.0 to 42.0 days on average. If they are above the national benchmark of 50.0 (Source: ASC Association), you have a problem.
Mr. Zasa suggests you trend the statistics over at least a 12-month period to spot trends and use accrual accounting for your statistics.
“The matching of revenue and expenses are critical to obtain the most accurate picture of center finances,” he says. “Additionally, we believe that the barometer of a business office is A/R days and accrual accounting is essential to determine a center’s A/R.”
14. Day sales outstanding (DSO)
This is how much of your revenue is tied up in receivables and how quickly is it being collected, says Mr. Faust.
“Cash flow is the center’s lifeline and should be monitored daily,” he says. “This is usually monitored in total and by payor. An increase in the DSO for a particular payor can signal a problem with how a batch was processed and thus can be tackled early through intervention with the payer or third party electronic billing agency.”
15. Collections as a percent of billings
“Centers use different ways of calculating billings, but most use an average of monthly billings over the prior two or three months which should have been collected in the month being monitored based on an average number of DSO that the center is experiencing,” says Mr. Faust.
16. Aging greater than 60 or 120 days
“A change in your A/R is excess of 60 or 120 days can lead you to investigating the individual payor that is not paying in the same amount of days as it had before,” says Mr. Faust.
17. Cash receipts daily
“Always monitor cash receipts daily and report the total receipts month to date and extrapolate out to come up with a monthly prorated collections figure,” says Mr. Faust. “This way you know how well you are going to cover the center’s expenses and the anticipated excess cash that will be available for either reinvestment in the center (such as equipment needs) or for distribution as dividends to physician owners.”
Note: You can learn more about critical statistics to monitor weekly and monthly at the 15th Annual Improving Profits and Business and Legal Issues for ASCs conference by attending Mr. Faust’s talk on “The 10 Key Statistics You Should Look at Each Week and Month” (Saturday, Oct. 25 at 9:45 a.m.).
