As reimbursements decline, ASCs need to be even more conscious of their bottom lines. Joseph Zasa, JD, managing and founding partner of ASD Management; Susan Curtis, RN, BSN, CASC and the administrator at the Surgical Center for Excellence; and Richard McGill, administrator at Shelby Baptist ASC, outline 10 often overlooked cost-cutting measures.
1. Use custom packs. A custom pack is a pre-packaged mixture of supplies for a specific specialty or procedure, such as urology, orthopedics or laparoscopy. "Custom packs are usually less expensive than buying each item separately," Mr. McGill says.
Ms. Curtis says her center only uses basic packs because of its specialized case load. The center is also very small and does not have room to store packs. However, she says if a center will use each item in a custom pack, they're worth the buy.
2. Purchase refurbished capital equipment. "Depending on the equipment needed, large savings can be realized through buying refurbished versus new capital equipment," says Mr. McGill.
Ms. Curtis' center was recently in the market for an OR bed. When she looked at the cost of a new bed, the price was $13,000. The center ultimately purchased a refurbished bed for $8,000.
"It's just like getting a brand new piece of equipment and you save thousands of dollars," she says.
Along the same line, Ms. Curtis' center had leased endoscopes that were not being used. The center was losing money because they were making payments on equipment they weren't using. Another center managed by ASD needed the endoscopes and took over the lease. This deal resulted in $35,000 savings for Ms. Curtis' center as well as savings for the center who acquired the lease.
3. Use a GPO and take advantage of group buys. A group purchasing organization allows smaller practices and surgery centers to buy supplies for less than market price because the GPO buys in bulk and sells to individual facilities. "This can really have a positive impact on your supply cost bottom line," Mr. McGill says. "This is one of the many benefits of partnering with a management company."
Ms. Curtis, whose center is managed by ASD Management, says her center gets discounts when purchasing from specific dealers because the management company has an established relationship with them.
4. Negotiate with vendors. Ms. Curtis always compares prices from different vendors when looking for new supplies. When she finds the best price, she goes back to her current representative and asks them if they can match the price. If they can match the price, great. If they can't, Ms. Curtis goes with the other vendor. "Even if it's $100 [in savings] a year, it's still 100 to our bottom line," she says.
Ms. Curtis also says administrators should not feel stuck with their current vendor. "It doesn't matter if you've been with a company a long time," she says. "If they're not going to help me with my pricing, I am going to go somewhere else."
5. Reprocess single-use devices. Reprocessing a single-use device often costs half as much as purchasing the device new. Ms. Curtis' first experience with reprocessing single-use devices was with compression hoses. New, the hoses cost $550, but the cost to repurpose the hose with a certified reprocessing company was only $250. Certain devices can be reprocessed more than once, she adds. If you're unsure about the process, Ms. Curtis recommends sending the device to the reprocessing center.
"The reprocessing center is the one that decides," she says. "They'll look at everything."
6. Use certified ASC coders. A certified ASC coder has passed an exam developed by ASC leaders and offered by AAPC that covers translating procedural notes into ICD-9-CM codes, applying rules for reimbursement and knowledge of procedures are appropriate for completion of an ASC.
"Your staff works hard providing quality care, and it is important to receive full reimbursement for each case your center performs," says Mr. McGill.
Ms. Curtis' center uses certified coders and follows up on submitted claims to make sure the surgery center is reimbursed correctly for each procedure.
"We don't leave any money lying on the table," she says.
7. Cross-train your staff to make your center runs efficiently. You won't have to use temp agencies as often if you ensure that your nursing and office staff can fill in personnel gaps. For example, you might consider training your pre-operative nurses in recovery room procedures. This is especially important in an ASC with a smaller staff.
Ms. Curtis says one of her staff members is pregnant, and even though she won't be leaving for three months, they have already started cross-training. "Because we are so small, we have limited resources," Ms. Curtis says.
8. Remove unnecessary insurance coverage. Every center should have medical malpractice, general liability, director and officer insurance, business interruption insurance and hired and non-owned insurance, but more "exotic" coverage — such as terrorism insurance — isn't needed, Mr. Zasa says.
9. Train staff to service equipment. Centers can spend a lot on preventive maintenance contracts, Mr. Zasa says. If possible, train staff to service the equipment by putting them through certified training programs.
10. Pay attention to employee healthcare plans. "There have been 13 percent increases on health insurance premiums at our centers," Mr. Zasa says. "That's something that's not typical."
Mr. Zasa says administrators should consider offering a HSA plan for employees or shopping around for insurance every year.
"United or Blue Cross Blue Shield will give you a cheap introductory rate for one year," he says.
Related Articles on ASC Turnarounds:
Solutions for the Biggest ASC Concerns in 2012: Q&A With Arise Healthcare's Jared Leger
5 Strategies to Minimize Damage from Same-Day Cancellations
Social Media Use by Surgery Centers: Q&A With Kim Woodruff of Pinnacle III
1. Use custom packs. A custom pack is a pre-packaged mixture of supplies for a specific specialty or procedure, such as urology, orthopedics or laparoscopy. "Custom packs are usually less expensive than buying each item separately," Mr. McGill says.
Ms. Curtis says her center only uses basic packs because of its specialized case load. The center is also very small and does not have room to store packs. However, she says if a center will use each item in a custom pack, they're worth the buy.
2. Purchase refurbished capital equipment. "Depending on the equipment needed, large savings can be realized through buying refurbished versus new capital equipment," says Mr. McGill.
Ms. Curtis' center was recently in the market for an OR bed. When she looked at the cost of a new bed, the price was $13,000. The center ultimately purchased a refurbished bed for $8,000.
"It's just like getting a brand new piece of equipment and you save thousands of dollars," she says.
Along the same line, Ms. Curtis' center had leased endoscopes that were not being used. The center was losing money because they were making payments on equipment they weren't using. Another center managed by ASD needed the endoscopes and took over the lease. This deal resulted in $35,000 savings for Ms. Curtis' center as well as savings for the center who acquired the lease.
3. Use a GPO and take advantage of group buys. A group purchasing organization allows smaller practices and surgery centers to buy supplies for less than market price because the GPO buys in bulk and sells to individual facilities. "This can really have a positive impact on your supply cost bottom line," Mr. McGill says. "This is one of the many benefits of partnering with a management company."
Ms. Curtis, whose center is managed by ASD Management, says her center gets discounts when purchasing from specific dealers because the management company has an established relationship with them.
4. Negotiate with vendors. Ms. Curtis always compares prices from different vendors when looking for new supplies. When she finds the best price, she goes back to her current representative and asks them if they can match the price. If they can match the price, great. If they can't, Ms. Curtis goes with the other vendor. "Even if it's $100 [in savings] a year, it's still 100 to our bottom line," she says.
Ms. Curtis also says administrators should not feel stuck with their current vendor. "It doesn't matter if you've been with a company a long time," she says. "If they're not going to help me with my pricing, I am going to go somewhere else."
5. Reprocess single-use devices. Reprocessing a single-use device often costs half as much as purchasing the device new. Ms. Curtis' first experience with reprocessing single-use devices was with compression hoses. New, the hoses cost $550, but the cost to repurpose the hose with a certified reprocessing company was only $250. Certain devices can be reprocessed more than once, she adds. If you're unsure about the process, Ms. Curtis recommends sending the device to the reprocessing center.
"The reprocessing center is the one that decides," she says. "They'll look at everything."
6. Use certified ASC coders. A certified ASC coder has passed an exam developed by ASC leaders and offered by AAPC that covers translating procedural notes into ICD-9-CM codes, applying rules for reimbursement and knowledge of procedures are appropriate for completion of an ASC.
"Your staff works hard providing quality care, and it is important to receive full reimbursement for each case your center performs," says Mr. McGill.
Ms. Curtis' center uses certified coders and follows up on submitted claims to make sure the surgery center is reimbursed correctly for each procedure.
"We don't leave any money lying on the table," she says.
7. Cross-train your staff to make your center runs efficiently. You won't have to use temp agencies as often if you ensure that your nursing and office staff can fill in personnel gaps. For example, you might consider training your pre-operative nurses in recovery room procedures. This is especially important in an ASC with a smaller staff.
Ms. Curtis says one of her staff members is pregnant, and even though she won't be leaving for three months, they have already started cross-training. "Because we are so small, we have limited resources," Ms. Curtis says.
8. Remove unnecessary insurance coverage. Every center should have medical malpractice, general liability, director and officer insurance, business interruption insurance and hired and non-owned insurance, but more "exotic" coverage — such as terrorism insurance — isn't needed, Mr. Zasa says.
9. Train staff to service equipment. Centers can spend a lot on preventive maintenance contracts, Mr. Zasa says. If possible, train staff to service the equipment by putting them through certified training programs.
10. Pay attention to employee healthcare plans. "There have been 13 percent increases on health insurance premiums at our centers," Mr. Zasa says. "That's something that's not typical."
Mr. Zasa says administrators should consider offering a HSA plan for employees or shopping around for insurance every year.
"United or Blue Cross Blue Shield will give you a cheap introductory rate for one year," he says.
Related Articles on ASC Turnarounds:
Solutions for the Biggest ASC Concerns in 2012: Q&A With Arise Healthcare's Jared Leger
5 Strategies to Minimize Damage from Same-Day Cancellations
Social Media Use by Surgery Centers: Q&A With Kim Woodruff of Pinnacle III