It's National ASC Week, when ambulatory surgery centers around the country will work to raise community and federal awareness of the benefits of choosing an ASC. A more convenient alternative to hospital outpatient departments, ASCs provide high quality, cost-effective surgical care.
Two physicians established the first ASC over four decades ago. Their goal was to provide timely, convenient and comfortable surgical services to patients in their community. Goal achieved! Today there are more than 6,000 ASCs in the United States and the goal remains the same. ASCs have a strong track record of providing affordable, quality care and positive patient outcomes which are the reasons for this expansive growth.
As the broader healthcare industry struggles with the transition towards value-based care, the ASC is a great example of a successful care delivery model that supports the 'Triple Aim' of improving the experience of care, improving the health of populations and reducing per capita costs of health care. All, however, has not been easy for this thriving industry.
Creativity is key
Creative cost management strategies have been the key to ASCs surviving the test of time. Some of the strategies are deemed unorthodox by those outside of the ASC industry and have even led to ridicule. Without creative adjustments, many ASCs would not exist today nor would they be thriving.
In response to shrinking reimbursements, ASCs have been forced to figure out new ways of doing things. Treating more cases is not the only solution. Another way to make money is to control costs. One of the most innovative adjustments to control costs has been staffing. Similar to hospitals, ASCs have historically relied on full-time staff working a five day week. With creative approaches to scheduling, some ASC leaders realized a five day week is not always the best choice.
After examining surgery schedules, these leaders determined significant cost savings could be achieved by eliminating nursing downtime and consolidating cases into fewer work days. The consolidated cases are staffed using vertical scheduling which means no idle downtime between cases. ASCs that compress their schedules to a shortened week also enjoy a reduction in labor costs. While this approach will not work for every center, ASCs with a lower case volume have certainly benefited from a shortened work week.
The case for inventory management
The most significant cost savings have resulted from a change in how ASCs manage inventory, which is a key variable in case costing. With reimbursements for ASCs on the decline, doctors and especially the owners of centers, quickly realized that more sophisticated inventory management was essential to survive. After all, it is impossible to know if a center is getting paid enough to cover expenses if the costs are unknown.
For example, consider an orthopedics case that has many implants. Supplies may easily cost $900; then there are staff and other charges associated with the procedure. If the overhead to treat the case is $1200, and insurance pays $1000, is the case affordable? If the surgeon performs enough cases at a center, it can help dilute the overhead costs of this case; that is, if the other cases are profitable. However, if the case is standalone, the facility will lose money. If the supplies are already paid for, it may make more sense to treat the case to cover the cost of the supplies sitting on the shelf. However, if inventory is not properly tracked, it is impossible to know if a case makes financial sense. Inventory management also helps facilities avoid needless cancellations and delays by ensuring all necessary supplies are readily available when needed.
Technology plays a critical role in helping centers take inventory management to the next level. When used properly, inventory management systems track information necessary to optimize the cost of acquiring and holding inventory while satisfying a center’s requirements for supplies. By eliminating manual inventory management processes, facilities benefit from consistent and accurate data in one central location, greater efficiency and improved staff productivity. The result? Lower expenses and a healthier bottom line, which positively impact every stakeholder in the care continuum from patient to physician to payer.
As we celebrate the storied legacy of ASCs this week, it is encouraging to reflect upon this thriving industry and see how – despite initial skepticism – they have withstood the test of time and continue to deliver the success they always knew was possible. What other types of innovative cost management strategies have you seen work at an ASC?
More articles on surgery centers:
Bryan Health breaks ground on $25M ASC, medical building — 5 things to know
Physicians Endoscopy partner East Side Endoscopy adds pain management services through NAPA: 5 notes
3 things to know about Dr. Robert LaTerra's cosmetic surgery center in Exton, Pa.