Ann Geier, RN, MS, CNOR, CASC, is senior vice president of operations for Ambulatory Surgical Centers of America.
Q: How do we calculate our ASC's OR utilization costs and what is one thing we can do to reduce costs associated with OR utilization?
Ann Geier: Every minute that the physician is in the OR or procedure room costs you money. To calculate your OR cost per minute — the money it costs you to do cases — you calculate the time using the patient-in to patient-out times. Another way to think about it is that you cannot generate revenue in the room while another patient is in the room. Surgeons often challenge this time methodology, as they argue that it only takes them "10 minutes to do a case," and you are showing that it took 30 minutes. You're considering the total time. Therefore, if you use an OR cost of $16-$18 per minute, a physician who operates in 15 minutes versus another who may take 45 minutes to do the same CPT code is being efficient and costs the ASC less money. When you add the costs specific to the case to the OR cost per minute, you know what it costs you to do the case. When you get paid, you deduct the costs and you now know your profit margin.
Scheduling compression is critical to efficiency. If you have large gaps in your schedule, it costs you money, as you have to keep staff in the center while you wait for the next set of cases to start. You are not generating revenue during that time, and the surgeons need to know how this impacts the bottom line. Consider closing days in order to schedule cases in a compact manner. Physicians are reluctant to make changes in their surgery schedules, as this impacts their office schedules, so make sure you educate them.
Learn more about ASCOA.
Read more guidance from the leadership at ASCOA:
- Growing Your ASC, the Path of Least Resistance: Top 4 Easiest Specialties to Transition Into an ASC
- 5 Ways ASCs Lose Money
- Decline in Payments Posted: Q&A With Dr. Brent Lambert of ASCOA
Q: How do we calculate our ASC's OR utilization costs and what is one thing we can do to reduce costs associated with OR utilization?
Ann Geier: Every minute that the physician is in the OR or procedure room costs you money. To calculate your OR cost per minute — the money it costs you to do cases — you calculate the time using the patient-in to patient-out times. Another way to think about it is that you cannot generate revenue in the room while another patient is in the room. Surgeons often challenge this time methodology, as they argue that it only takes them "10 minutes to do a case," and you are showing that it took 30 minutes. You're considering the total time. Therefore, if you use an OR cost of $16-$18 per minute, a physician who operates in 15 minutes versus another who may take 45 minutes to do the same CPT code is being efficient and costs the ASC less money. When you add the costs specific to the case to the OR cost per minute, you know what it costs you to do the case. When you get paid, you deduct the costs and you now know your profit margin.
Scheduling compression is critical to efficiency. If you have large gaps in your schedule, it costs you money, as you have to keep staff in the center while you wait for the next set of cases to start. You are not generating revenue during that time, and the surgeons need to know how this impacts the bottom line. Consider closing days in order to schedule cases in a compact manner. Physicians are reluctant to make changes in their surgery schedules, as this impacts their office schedules, so make sure you educate them.
Learn more about ASCOA.
Read more guidance from the leadership at ASCOA:
- Growing Your ASC, the Path of Least Resistance: Top 4 Easiest Specialties to Transition Into an ASC
- 5 Ways ASCs Lose Money
- Decline in Payments Posted: Q&A With Dr. Brent Lambert of ASCOA