Matt Kraemer, administrator of Northern Arizona Healthcare in Flagstaff, joined Becker's to discuss his team's strategy in handling the obstacle of rising overhead paired with stagnating ASC reimbursements.
Editor's note: This response was edited lightly for clarity and length.
Question: What is your strategy for tackling rising costs paired with stagnating reimbursements?
Matt Kraemer: The big obstacles are the cost of medical supplies, the cost of implants and the cost of employees. Those are the three big buckets of operating costs. On the medical supplies and implant supplies piece, the key is managing the contracts and managing those vendor relationships. We want to create highly aligned and highly beneficial vendor relationships with our partners so that it's a win-win situation for both of us. One can't survive without the other, and so we try to create a relationship where we both work collaboratively in order to achieve a very similar outcome.
On the side of the employee overhead, that comes down to engagements, training and investment in your work staff. Those costs have also gone up — there's an increase in hourly wages and salaries for those employees, paired with a shortage in just about every specialty. Having people that are highly engaged and even cross trained to different areas is critical. For example, a pre-admissions nurse that's able to assist in the preoperative space or the post-anesthesia care unit space, depending on what your needs are any particular day, makes you a much stronger workforce. So while you're not reducing cost on the surface level, you're reducing the cost when it comes to turnover. It's more about how you're able to leverage the resources that you already have in place.
We also create carve outs with our third party payers for some of the costs of reimbursement. By working with our payers on to achieve carve outs for certain cases that we're performing in the ASC, we see a huge patient and provider experience improvement.