Cost-cutting is a continual task for surgery center administrators. Here Connie Casey, administrator of North Point Surgery & Laser Center in West Palm Beach, Fla., discusses five fresh ideas to stay within a tight budget this year.
1. Demonstrate cost savings to payors by providing details about where physicians take their cases. Most surgery center leaders agree that payors are more likely to increase your reimbursement rates if you can demonstrate that your ASC is less expensive for the payor than the local hospital. Unfortunately, making this claim without evidence might not be enough.
Ms. Casey says she recently started presenting the payor with clear evidence about where her physicians take their cases if they can't be performed at the ASC due to reimbursement issues. "I say, 'I have this doctor taking his cases to the hospital right now. This is his name; this is the hospital's name. You can look at his cases at the hospital and see what you're paying for the procedure,'" she says. She says when the payor can actually see where the patient is going, they are more likely to offer a reimbursement increase.
2. Consolidate suppliers to give them higher volume. The more volume you can give a supplier, the better pricing you can achieve, Ms. Casey says. If you use one vendor for a certain supply, you can give them monthly case volume numbers and demonstrate how much money they will make from you in a month. "They really have to know how much work they're going to get out of the facility," she says. "You can say, 'We love the anchors you're putting in the shoulders, but we can't pay that much. If we're going to do this many cases a month, we will need a lower price.'"
If you consolidate suppliers, you will also likely build a better relationship with the vendors you use, Ms. Casey says. It's important that you stay close with your vendor representative to hear about discounts and negotiate deals. Ms. Casey says she has been able to achieve significant cost savings by working with local companies rather than national ones. When you have a relationship with a supplier, she says, "you can explain to them that some payors won't pay for implants, so you need a discount on the implant from the supplier."
3. Hold a scheduler "happy hour" to bring more cases to the ASC. Schedulers are the gatekeepers of physician cases, and without them, your ASC volume can suffer. Ms. Casey says she holds a scheduler happy hour every six months to refresh their relationship with the ASC.
"The scheduler is the person who gives you those cases, who says, 'I can send that to North Point,'" she says. "We put a lot of emphasis on keeping schedulers and physicians happy so that when a new physician joins the practice, they fall into place at the ASC and you don't have to work hard for their cases." If your surgery center, like Ms. Casey's, is in an area that suffers from low population growth, you may want to focus on getting more cases from your existing physicians rather than on new physician recruitment.
4. Promote from within. Promoting an employee from within can save money in hiring and training — and you won't have the same lag time as the new employee gets used to your surgery center. Ms. Casey says her materials manager has been with her for 16 years and started at the ASC as a receptionist. "I saw she had much more potential, and she started building relationships with the local companies whose contracts beat out corporate contracts," she says. "I took her and started teaching her, and she caught on so fast that I can give her other jobs as well." Don't limit your employees by deciding they can only do one job from the start; watch for particular strengths and determine if they could benefit your ASC in a different area.
5. Target insurance companies with low reimbursement immediately for new procedures. When starting a new procedure, Ms. Casey says it's essential to approach your payors immediately to start negotiating reimbursement increases. When Ms. Casey's surgery center started performing urology last year, she went to her insurance companies to explain the situation and ask for carve-outs for the procedures. "All but one really helped us," she says. "They know it's a lot more money if the case goes to the hospital."
She says it's important to target insurance companies with predictable low reimbursement in particular. "I have to see if I'm going to be profitable or not," she says. "I write every code down and put it in the system so I can look and see exactly what payors are going to pay for a procedure side-by side."
Related Articles on ASC Turnarounds:
20 New Statistics on Surgery Center Staffing Costs
How to Turn Around an ASC Through Internal and External Physician Recruitment
8 Characteristics of Highly Successful Surgery Centers
1. Demonstrate cost savings to payors by providing details about where physicians take their cases. Most surgery center leaders agree that payors are more likely to increase your reimbursement rates if you can demonstrate that your ASC is less expensive for the payor than the local hospital. Unfortunately, making this claim without evidence might not be enough.
Ms. Casey says she recently started presenting the payor with clear evidence about where her physicians take their cases if they can't be performed at the ASC due to reimbursement issues. "I say, 'I have this doctor taking his cases to the hospital right now. This is his name; this is the hospital's name. You can look at his cases at the hospital and see what you're paying for the procedure,'" she says. She says when the payor can actually see where the patient is going, they are more likely to offer a reimbursement increase.
2. Consolidate suppliers to give them higher volume. The more volume you can give a supplier, the better pricing you can achieve, Ms. Casey says. If you use one vendor for a certain supply, you can give them monthly case volume numbers and demonstrate how much money they will make from you in a month. "They really have to know how much work they're going to get out of the facility," she says. "You can say, 'We love the anchors you're putting in the shoulders, but we can't pay that much. If we're going to do this many cases a month, we will need a lower price.'"
If you consolidate suppliers, you will also likely build a better relationship with the vendors you use, Ms. Casey says. It's important that you stay close with your vendor representative to hear about discounts and negotiate deals. Ms. Casey says she has been able to achieve significant cost savings by working with local companies rather than national ones. When you have a relationship with a supplier, she says, "you can explain to them that some payors won't pay for implants, so you need a discount on the implant from the supplier."
3. Hold a scheduler "happy hour" to bring more cases to the ASC. Schedulers are the gatekeepers of physician cases, and without them, your ASC volume can suffer. Ms. Casey says she holds a scheduler happy hour every six months to refresh their relationship with the ASC.
"The scheduler is the person who gives you those cases, who says, 'I can send that to North Point,'" she says. "We put a lot of emphasis on keeping schedulers and physicians happy so that when a new physician joins the practice, they fall into place at the ASC and you don't have to work hard for their cases." If your surgery center, like Ms. Casey's, is in an area that suffers from low population growth, you may want to focus on getting more cases from your existing physicians rather than on new physician recruitment.
4. Promote from within. Promoting an employee from within can save money in hiring and training — and you won't have the same lag time as the new employee gets used to your surgery center. Ms. Casey says her materials manager has been with her for 16 years and started at the ASC as a receptionist. "I saw she had much more potential, and she started building relationships with the local companies whose contracts beat out corporate contracts," she says. "I took her and started teaching her, and she caught on so fast that I can give her other jobs as well." Don't limit your employees by deciding they can only do one job from the start; watch for particular strengths and determine if they could benefit your ASC in a different area.
5. Target insurance companies with low reimbursement immediately for new procedures. When starting a new procedure, Ms. Casey says it's essential to approach your payors immediately to start negotiating reimbursement increases. When Ms. Casey's surgery center started performing urology last year, she went to her insurance companies to explain the situation and ask for carve-outs for the procedures. "All but one really helped us," she says. "They know it's a lot more money if the case goes to the hospital."
She says it's important to target insurance companies with predictable low reimbursement in particular. "I have to see if I'm going to be profitable or not," she says. "I write every code down and put it in the system so I can look and see exactly what payors are going to pay for a procedure side-by side."
Related Articles on ASC Turnarounds:
20 New Statistics on Surgery Center Staffing Costs
How to Turn Around an ASC Through Internal and External Physician Recruitment
8 Characteristics of Highly Successful Surgery Centers