With reim
bursements declining and business expenses rising, surgery centers are looking for new ways to cover costs. For some surgery centers, the answer might be building a program for cash-pay patients to attract and accommodate for people without insurance or with high-deductible plans that are looking for more affordable healthcare options.
"I think as the effects of ObamaCare begin to play out, we will see a skyrocketing of medical costs," says Keith Smith, MD, anesthesiologist and chief medical director at Surgery Center of Oklahoma in Oklahoma City, which has a cash-pay program. "The costs are going to be very high and the premiums for insurance will be high, but surgery centers with a cash-pay program can intercept some of those patients with low costs that are transparent and fair. The ability to embrace the free market and adopt a model like this has a much greater change of being successful than facilities that sign a lot of insurance contracts, go in-network and deal with government payors."
Here are eight steps to build a cash-pay program at ambulatory surgery centers.
1. Deter
mine your goals for the cash-pay program. In the very beginning stages of the discussion about cash pay, make sure you define your goals for the program and discuss them among the physician partners. Reed Martin, COO of Surgical Management Professionals, recommends surgery center administrators consider these questions to reach the heart of their goals:
• Do you want a reasonable price for cash pay?
• Can you accommodate those patients who pay cash?
• Do you have a charity or hardship plan developed?
• Can you be flexible for individuals within the cash pay structure?
Considering these points will help administrators and physician partners reach their goals and begin planning the structure of their program. Dr. Smith began quoting prices to patients in 1997 and later published their prices online to reach a wider audience.
"We began quoting prices to primarily uninsured people who needed elective procedures and then decided to put those prices online so that people outside of our area could see them and bring their business our way," says Dr. Smith. "This was also an attempt to break the strangle hold big insurance companies and hospitals have on the healthcare business."
2. Set a discount for cash-pay. Surgery centers can offer cash-pay patients a discount on services, but you must make sure the discount is acceptable. "The price must be higher than Medicare payments but still reasonable," says Mr. Martin. "The suggestion is a percent above Medicare."
Dr. Smith says prices at Surgery Center of Oklahoma are listed anywhere from an eighth to a tenth of the prices charged at local non-profit hospitals, which is attractive for patients who are paying out of pocket. "By virtue of the price difference, our practice is in the range people can afford," he says. "The price includes the surgeon, anesthesia and facility charges so we are able to attract business because our prices are much lower and more affordable for people with no insurance or high deductible plans."
There are several factors coming together to reach an acceptable and competitive price for procedures, and surgeon partners should work together to arrive at the appropriate price. "At our surgery center, we had to come to a consensus with the surgeon partners on what the price should be for their professional services," says Dr. Smith. "We had to calculate the average time it took to complete cases, figure out anesthesia charges and compile costs incurred for each surgery to determine the facility component. A lot of things have to be pulled together to come to a rational price."
After calculating each price you can attract patients by posting those prices on your surgery center's website or distributing them to patients upon request.
3. Develop a process for traveling patients. If patients are traveling long distances for your services, have a plan ready for their pre-surgical examination and post-surgical follow up. This might include some long-distance communication to make sure they are an appropriate surgical candidate before they travel many miles to your facility.
"Typically there is a telephone consultation prior to making the trip and that gives us a good idea if they are a candidate for outpatient surgery and the procedure they need," says Dr. Smith. "After surgery, they stay for the appropriate number of days as decided by the physician and patient before traveling back home. Their follow-up depends on how far away they are, and patients that are too far to travel back to us see their primary care physicians in their hometown."
There are currently three primary care surgeons from across the country that have developed a relationship with surgeons at Surgery Center of Oklahoma because their patients chose to travel for surgery and then do the follow up at home; now, those primary care physicians recommend their cash-pay patients travel to Surgery Center of Oklahoma for an affordable procedure.
"We have referrals from these people who aren't even affiliated with us and we have seen multiple patients from them," says Dr. Smith. "These primary care physicians have large cash pay practices and they are a good resource for us."
4. Communicate payment plans with patients. Decide which payment methods your surgery center will accept and how to communicate these methods to patients. The surgery center may want to accept promissory notes or another form of credit so patients can make payments over an extended period of time instead of paying on lump sum.
"One acceptable area of flexibility might be accepting half of the payment upfront and the other half over six months or a year," says Mr. Martin. "This method could cover the variable costs of the facility while affording patients a reasonable payment plan."
Flexibility within these plans should be available to accommodate for individual patients.
5. Appoint an authority figure to exercise payment flexibility. Every unique patient situation can't be predicted beforehand, so appoint someone within the program's structure to have authority over how much payment flexibility will be given. This can be done within the surgery center's board of directors.
"The board needs to decide who has the authority at the facility to exercise this flexibility," says Mr. Martin. "This person can decide how much flexibility exists, which could range from no upfront cash and full promissory note over a two or three year period to the least flexible payment option, which would be full payment at the time of service."
This person should be appointed early in the process before the program is launched. "There needs to be a good understanding of who has the authority and what the level of authority is," says Mr. Martin. "Everyone should know where the facility is on the flexibility continuum."
6. Develop a charity care policy. Make sure you are ready to provide a charity care policy for patients who need those services. "The charity and hardship policy development and utilization will be important," says Mr. Martin. "These are often based on guidelines for federal hardship and poverty cases, and are relatively easy to calculate."
Having the charity care policy in place before launching the cash pay program prepares the surgery center to accept those patients and educate them about their options as soon as they arrive.
7. Market your services online for increased exposure. In addition to posting the surgery center's prices online, ASCs can attract more cash-pay patients by participating in marketing efforts and enhancing its online presence. Dr. Smith has a blog where he writes almost daily about different issues in the healthcare space and is able to reach potential patients through that forum.
"My blog has gained some national attention and helped us get more exposure to the website," says Dr. Smith. "The blog posts are like op-ed pieces on the healthcare industry. I have also appeared in numerous journals or magazines, including the journal for the Association of American Physicians and Surgeons, talking about my ideas. I'm writing articles about the free market medical practice, with a free market bias not just in medicine but in all aspects of the economy."
To attract the local audience, Dr. Smith also serves as an expert source for newspapers and at town hall meetings in his community. "I would encourage any surgery center that is inclined to do this to try it and I think they'll find it won't hurt the business they have and may bring in extra business," he says.
8. Prepare for national and international patients. Once your cash pay program goes public, patients will begin coming from across the country and all over the world to receive affordable healthcare at your surgery center. You should be able to accommodate this medical tourism when necessary.
"When we put our prices online, the first thing that happened was Canadians started showing up," says Dr. Smith. "We also bring in people from all over the country. The price list was a huge project to go through, but since we finalized it there has been almost no change."
Since these patients are traveling, they will be looking for a hotel to stay in for several nights and other attractions around the city. The surgery center can help these patients make those arrangements as well as provide the medical care.
"We actually help patients with their lodging arrangements when they travel," says Dr. Smith. "We don't pay for them, but we assist them in finding a location. We help patients with flight arrangements and have directions on our website about how to get to the surgery center. It's a reverse of medical tourism."
More Articles on Surgery Centers:
12 Keys to Financial Success—Ambulatory Surgical Centers
5 Steps to Prepare for ICD-10 Starting Now
15 Steps for Surgery Centers to Strategically Align With Hospitals
bursements declining and business expenses rising, surgery centers are looking for new ways to cover costs. For some surgery centers, the answer might be building a program for cash-pay patients to attract and accommodate for people without insurance or with high-deductible plans that are looking for more affordable healthcare options.
"I think as the effects of ObamaCare begin to play out, we will see a skyrocketing of medical costs," says Keith Smith, MD, anesthesiologist and chief medical director at Surgery Center of Oklahoma in Oklahoma City, which has a cash-pay program. "The costs are going to be very high and the premiums for insurance will be high, but surgery centers with a cash-pay program can intercept some of those patients with low costs that are transparent and fair. The ability to embrace the free market and adopt a model like this has a much greater change of being successful than facilities that sign a lot of insurance contracts, go in-network and deal with government payors."
Here are eight steps to build a cash-pay program at ambulatory surgery centers.
1. Deter
mine your goals for the cash-pay program. In the very beginning stages of the discussion about cash pay, make sure you define your goals for the program and discuss them among the physician partners. Reed Martin, COO of Surgical Management Professionals, recommends surgery center administrators consider these questions to reach the heart of their goals:• Do you want a reasonable price for cash pay?
• Can you accommodate those patients who pay cash?
• Do you have a charity or hardship plan developed?
• Can you be flexible for individuals within the cash pay structure?
Considering these points will help administrators and physician partners reach their goals and begin planning the structure of their program. Dr. Smith began quoting prices to patients in 1997 and later published their prices online to reach a wider audience.
"We began quoting prices to primarily uninsured people who needed elective procedures and then decided to put those prices online so that people outside of our area could see them and bring their business our way," says Dr. Smith. "This was also an attempt to break the strangle hold big insurance companies and hospitals have on the healthcare business."
2. Set a discount for cash-pay. Surgery centers can offer cash-pay patients a discount on services, but you must make sure the discount is acceptable. "The price must be higher than Medicare payments but still reasonable," says Mr. Martin. "The suggestion is a percent above Medicare."
Dr. Smith says prices at Surgery Center of Oklahoma are listed anywhere from an eighth to a tenth of the prices charged at local non-profit hospitals, which is attractive for patients who are paying out of pocket. "By virtue of the price difference, our practice is in the range people can afford," he says. "The price includes the surgeon, anesthesia and facility charges so we are able to attract business because our prices are much lower and more affordable for people with no insurance or high deductible plans."
There are several factors coming together to reach an acceptable and competitive price for procedures, and surgeon partners should work together to arrive at the appropriate price. "At our surgery center, we had to come to a consensus with the surgeon partners on what the price should be for their professional services," says Dr. Smith. "We had to calculate the average time it took to complete cases, figure out anesthesia charges and compile costs incurred for each surgery to determine the facility component. A lot of things have to be pulled together to come to a rational price."
After calculating each price you can attract patients by posting those prices on your surgery center's website or distributing them to patients upon request.
3. Develop a process for traveling patients. If patients are traveling long distances for your services, have a plan ready for their pre-surgical examination and post-surgical follow up. This might include some long-distance communication to make sure they are an appropriate surgical candidate before they travel many miles to your facility.
"Typically there is a telephone consultation prior to making the trip and that gives us a good idea if they are a candidate for outpatient surgery and the procedure they need," says Dr. Smith. "After surgery, they stay for the appropriate number of days as decided by the physician and patient before traveling back home. Their follow-up depends on how far away they are, and patients that are too far to travel back to us see their primary care physicians in their hometown."
There are currently three primary care surgeons from across the country that have developed a relationship with surgeons at Surgery Center of Oklahoma because their patients chose to travel for surgery and then do the follow up at home; now, those primary care physicians recommend their cash-pay patients travel to Surgery Center of Oklahoma for an affordable procedure.
"We have referrals from these people who aren't even affiliated with us and we have seen multiple patients from them," says Dr. Smith. "These primary care physicians have large cash pay practices and they are a good resource for us."
4. Communicate payment plans with patients. Decide which payment methods your surgery center will accept and how to communicate these methods to patients. The surgery center may want to accept promissory notes or another form of credit so patients can make payments over an extended period of time instead of paying on lump sum.
"One acceptable area of flexibility might be accepting half of the payment upfront and the other half over six months or a year," says Mr. Martin. "This method could cover the variable costs of the facility while affording patients a reasonable payment plan."
Flexibility within these plans should be available to accommodate for individual patients.
5. Appoint an authority figure to exercise payment flexibility. Every unique patient situation can't be predicted beforehand, so appoint someone within the program's structure to have authority over how much payment flexibility will be given. This can be done within the surgery center's board of directors.
"The board needs to decide who has the authority at the facility to exercise this flexibility," says Mr. Martin. "This person can decide how much flexibility exists, which could range from no upfront cash and full promissory note over a two or three year period to the least flexible payment option, which would be full payment at the time of service."
This person should be appointed early in the process before the program is launched. "There needs to be a good understanding of who has the authority and what the level of authority is," says Mr. Martin. "Everyone should know where the facility is on the flexibility continuum."
6. Develop a charity care policy. Make sure you are ready to provide a charity care policy for patients who need those services. "The charity and hardship policy development and utilization will be important," says Mr. Martin. "These are often based on guidelines for federal hardship and poverty cases, and are relatively easy to calculate."
Having the charity care policy in place before launching the cash pay program prepares the surgery center to accept those patients and educate them about their options as soon as they arrive.
7. Market your services online for increased exposure. In addition to posting the surgery center's prices online, ASCs can attract more cash-pay patients by participating in marketing efforts and enhancing its online presence. Dr. Smith has a blog where he writes almost daily about different issues in the healthcare space and is able to reach potential patients through that forum.
"My blog has gained some national attention and helped us get more exposure to the website," says Dr. Smith. "The blog posts are like op-ed pieces on the healthcare industry. I have also appeared in numerous journals or magazines, including the journal for the Association of American Physicians and Surgeons, talking about my ideas. I'm writing articles about the free market medical practice, with a free market bias not just in medicine but in all aspects of the economy."
To attract the local audience, Dr. Smith also serves as an expert source for newspapers and at town hall meetings in his community. "I would encourage any surgery center that is inclined to do this to try it and I think they'll find it won't hurt the business they have and may bring in extra business," he says.
8. Prepare for national and international patients. Once your cash pay program goes public, patients will begin coming from across the country and all over the world to receive affordable healthcare at your surgery center. You should be able to accommodate this medical tourism when necessary.
"When we put our prices online, the first thing that happened was Canadians started showing up," says Dr. Smith. "We also bring in people from all over the country. The price list was a huge project to go through, but since we finalized it there has been almost no change."
Since these patients are traveling, they will be looking for a hotel to stay in for several nights and other attractions around the city. The surgery center can help these patients make those arrangements as well as provide the medical care.
"We actually help patients with their lodging arrangements when they travel," says Dr. Smith. "We don't pay for them, but we assist them in finding a location. We help patients with flight arrangements and have directions on our website about how to get to the surgery center. It's a reverse of medical tourism."
More Articles on Surgery Centers:
12 Keys to Financial Success—Ambulatory Surgical Centers
5 Steps to Prepare for ICD-10 Starting Now
15 Steps for Surgery Centers to Strategically Align With Hospitals