A few years ago, a multispecialty surgery center in Florida with two operating rooms that focused on orthopedics, ENT and dental was losing $150,000 every month. It was nearly bankrupt, but it now it stands viable today. How did it manage the turnaround?
At the 20th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 24, Joe Zasa, co-founder and managing partner of ASD Management, explained how that ASC righted its ship and is now back to profitability.
The four cornerstones
Mr. Zasa and ASD Management found out about this ASC a few years ago and decided to try and help it recover because "it had potential," he said.
Every facility has four cornerstones — clinical, risk management, business office and managed care. For an ASC to be solvent, it has to be successful in all four areas. Mr. Zasa said the ASC in Florida had good clinical/patient care quality, but the other three areas were very problematic.
The center had low revenue per case and an inaccurate accounts receivable. The facility's owners had no idea what their A/R days were, a measure Mr. Zasa said is one of the most important for an ASC to monitor. The ASC was also accumulating large amounts of debt, and it almost maxed out its $2 million line of credit. Vendors stopped delivering services, payer contracts were poor and there was no accounting system or general ledger. "It was a mess," Mr. Zasa said.
So he and others performed an on-site visit and line item analysis of all expenses. Mr. Zasa also created a multistep plan focused on improving managed care, collections, coding, expense control, bank relations, legal matters and several other areas to stabilize the four cornerstones.
The plan was vetted, bankruptcy was no longer feared and the volumes supported a new profitable future for the ASC. However, Mr. Zasa said the only way the turnaround went from paper plan to reality was because everyone at the ASC — physicians and staff — bought into the idea. They all wanted to see the surgery center make a comeback, and Mr. Zasa said their commitment and loyalty was key. Consequently, it led to bonus programs and dividends, which he said are essential to keeping a happy staff.
"When the staff is motivated to do work, that's how you know your ASC is doing well," Mr. Zasa said. "Take care of your people."
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At the 20th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 24, Joe Zasa, co-founder and managing partner of ASD Management, explained how that ASC righted its ship and is now back to profitability.
The four cornerstones
Mr. Zasa and ASD Management found out about this ASC a few years ago and decided to try and help it recover because "it had potential," he said.
Every facility has four cornerstones — clinical, risk management, business office and managed care. For an ASC to be solvent, it has to be successful in all four areas. Mr. Zasa said the ASC in Florida had good clinical/patient care quality, but the other three areas were very problematic.
The center had low revenue per case and an inaccurate accounts receivable. The facility's owners had no idea what their A/R days were, a measure Mr. Zasa said is one of the most important for an ASC to monitor. The ASC was also accumulating large amounts of debt, and it almost maxed out its $2 million line of credit. Vendors stopped delivering services, payer contracts were poor and there was no accounting system or general ledger. "It was a mess," Mr. Zasa said.
So he and others performed an on-site visit and line item analysis of all expenses. Mr. Zasa also created a multistep plan focused on improving managed care, collections, coding, expense control, bank relations, legal matters and several other areas to stabilize the four cornerstones.
The plan was vetted, bankruptcy was no longer feared and the volumes supported a new profitable future for the ASC. However, Mr. Zasa said the only way the turnaround went from paper plan to reality was because everyone at the ASC — physicians and staff — bought into the idea. They all wanted to see the surgery center make a comeback, and Mr. Zasa said their commitment and loyalty was key. Consequently, it led to bonus programs and dividends, which he said are essential to keeping a happy staff.
"When the staff is motivated to do work, that's how you know your ASC is doing well," Mr. Zasa said. "Take care of your people."
More Articles on the 20th Annual ASC Conference:
Consumerism and Price Transparency: How It Affects ASCs
ASC-CAHPS is Coming: Is Your ASC Prepared?
Legal Issues Involving ASCs: The False Claims Act and Physician Buyouts