Brian Brown, regional vice president of operations of Meridian Surgical Partners, identifies 10 ambulatory surgery center physician statistics to track and benchmark and shares some insight into what surgery centers should do with the data. Note: Mr. Brown will present on "10 Statistics Your ASC Should Review Each Day, Week, and Month and What to do About Them" at the 9th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference (June 9-11, 2011; Chicago).
1. Case volume by physician. Mr. Brown says this should be examined monthly, and ASCs should also have 12 months of trailing case volume data when gathering and examining monthly financials. "What we're looking for is practice trends within the individual physicians," Mr. Brown says. "Are their practices growing? Are they losing referrals? Where are their case trends growing?"
By studying this data, you will more likely identify if you have physicians that want to reduce their caseload, perhaps in preparation for retirement; if physicians are sending more of their cases to the hospital; and to identify the young physicians who are most likely to drive the success of the ASC in the future. "These are the guys we can put our stock in and bank on," Mr. Brown says. "They're the ones you can put your focus into as to what is going to be their needs in the future of their practice and ASC."
2. Total net revenue by physician. Like case volume, Mr. Brown says you should track this monthly and also examine the previous year's worth of data. "With this figure, we'll look at revenue by physician … and if one physician is doing the same case number as another but one surgeon's revenue is way ahead of the other, we're looking at that and working to identify what it is that physician is doing that the other is not."
This is a great way to examine the types of cases each physician performs in the same specialty, he says. "Just because you have orthopedics as specialty, it doesn't necessarily guarantee you high reimbursements. If your physicians are performing a majority of hand cases or simple knee arthroscopies, your total revenue may be lower than you would initially expect just looking at case volumes with 'orthopedics' as the specialty next to it, he says. You can also evaluate the payor mix of each physician by analyzing total net revenue.
3. Revenue per case by physician. By comparing revenue per case by physician by specialty, you will most likely observe significant practice patterns causing differences in reimbursement per case. "In pain management, for example, if you have one physician that's receiving $500 per case reimbursement and then you have another pain physician who is getting $750 per case, then you're going to want to look at those cases," Mr. Brown says. "In pain, you can do one level injections, two levels of injections, three levels. All of a sudden you're going to start to find that one surgeon is more advanced in techniques than another surgeon." Also, in some pain cases, surgeons will use fluoroscopy while others will not, he says. Those that use the C-arm typically receive higher reimbursement than those that do not use fluoroscopy, and examining and comparing revenue per case will help reveal such differences.
After identifying what is causing the differences in revenue, you can visit with your physicians and talk to them about their techniques, Mr. Brown says. "If you present the numbers to physicians, sometimes they'll be interested … to know they can get more money on the physician side as well, and that may change their technique."
4. Supplies per case by physician. Mr. Brown says ASC should look at supplies per case for physicians by like procedures. He suggests ASCs case cost these procedures and compare costs between physicians. One of the better ways to bring about change is to share this data with physicians, but he says you should not identify the physicians by name when doing so. Mr. Brown suggests ASC "blind the case cost," which means identifying physicians by letter or number (e.g., Dr. A, Dr. B, Dr. C).
"For example, let's say you have three ophthalmologists in your ASC," he says. "You have one that's running about $400 in supplies per case, one that's $300 and one that's $550. If you put those figures in front of [the surgeons], they're going to figure out who is who very quickly. When they do that, they never want to be the highest cost physician; they don't want to be the one that's costing the partnership money unless it's a valid reason.
"For example, when it comes to cataracts, you're talking about a fairly straightforward procedure that can be compared very easily," he says. "If you have a physician using a lot of high dollar supplies like your viscoelastics, there are different ones that cost more than the others; or maybe the lens they're using costs more than the others; it stands out fairly quickly."
By sharing the data and what's driving the cost differences, physicians will be more likely to make similar supply choices as their partners. "That really produces some healthy discussion," Mr. Brown says. "Whenever they're talking peer-to-peer, they can usually convince each other about the quality of products and they'll often switch (to a lower cost supply)."
5. Contribution margin by physician. This figure takes into account the other four statistics discussed. It's the collectible revenue from the case, the variable supplies and variable costs for the case which would include your direct labor as well, Mr. Brown says. "Then you come up to what is the contribution of that case to the partnership (before you apply any overhead)," he says. "That's what that case is contributing to the profitability of the center. We can really hone it down and see if there's a physician that's break-even or less; then we can get into those numbers and figure out why those cases not being profitable to the center. Is it supplies? Is it that cases take too long? Is it the reimbursement of the case?"
One example Mr. Brown has seen this work well is for GYN physicians performing ablations. Thermal ablation has a disposable supply that costs around $1,000, he says. That case has a Medicare reimbursement rate of around $1,100-$1,200, depending upon where in the country you are located. Once you included other supplies used on top of disposable supply and add in the direct labor costs associated with the case, you're more than likely losing money and that's even before overhead.
"While we may not be able to do those Medicare cases in our center but we'll try to work with our commercial payors and see if we can get a carve out for that supply item or for that CPT code," Mr. Brown says. "We ask if they will pay us $2,500 instead of $1,100-$1,200. That takes into account the $1,000 supply item and now you have a very nice, substantial contribution margin. The doctor didn't have to change anything, we just worked to obtain a carve out and then that case becomes a very profitable case."
This can also help to identify physicians who are performing many highly profitable cases the ASC should work to ensure those cases remain in the ASC. "What you want to be able to achieve is a certain contribution margin at the end of the day from these physicians," Mr. Brown says. "Let's say they have one of those Medicare cases they were going to lose money on but they had four other commercial cases. Why inconvenience our partner and make them go to the hospital to do one case versus coming to the ASC" and performing all five of the cases as their book of business, a book of business that is highly profitable for the ASC and convenient for the physicians and their patients."
6. Physician satisfaction. This is a statistic Mr. Brown says is critical for ASCs to monitor closely. "It's very important to try to keep a finger on the pulse our physicians," he says, and that's for both physician-investors and physician-users. "Along with patients, they're your major customers."
Physician satisfaction is a challenge to track, which is why ASCs should, at least annually, send out a formal survey to all physicians. Mr. Brown says Meridian asks physicians at its surgery centers to rate the following 10 areas of their ASC's performance:
- Efficiency of business office.
- Ease of scheduling.
- Availability of operating room time.
- Procedure start time as scheduled (did the physicians procedure start when it was supposed to).
- OR turnover time
- Availability of equipment to do your cases.
- Quality of equipment.
- Adequacy of nurse staffing.
- Nursing staff knowledge and expertise.
- Staff morale.
The Meridian survey offers five categories of ratings: excellent, above average, average, below average and poor. "Anything that gets less than an above average rating, you want to follow up first with the administrator and then team management and identify what's going on in those areas and how you should respond," Mr. Brown says.
He says it's also worthwhile to have physicians rate, in those five categories, the quality of patient care delivered by the staff by department: pre-op, OR, PACU, anesthesia and administration. On the bottom of the survey, provide a comments section where physicians have the option to share additional thoughts.
If an ASC undergoes significant changes, Mr. Brown says it might be worthwhile to conduct the survey more frequently.
7. Top five CPT codes by physician. In all patient accounting/billing systems, Mr. Brown says you should be able to track CPT codes by physician. What this information will allow you to do is analyze the subspecialty mix of your physicians. "For example, does your ASC have an orthopedic physician who focuses on shoulders or a physician who is doing heavy cases like ACL repairs," Mr. Brown says. "[That data] will let you be able to prepare for that physician's patients in a unique fashion, whether it be scheduling time, looking to see if that physician needs more block time, the cost of doing those cases and it will let you be able to examine your physician base at the ASC and identify what could be a nice compliment through recruiting a new physician."
For example, if you have several orthopedic surgeons but none focusing on hand surgery, that's a very efficient orthopedic subspecialty you can work to add to your ASC, he says.
8. Physician payor mix. Mr. Brown says this is a very important statistic from a top line perspective as it will allow you to determine your net revenue per case (i.e., the specific reimbursement). "For example, if you're managing an ASC in South Florida, the payor mix is probably heavy Medicare and Medicare HMOs, which are mostly paying Medicare rates," he says. "You've got to manage block times, staffing and your costs well because you know you're in a very low reimbursing area of the country."
While you do not want to make any changes which will compromise patient care, understanding your payor mix will allow you to identify areas you should focus upon to increase efficiency and bring your ASC to a place where it can operate effectively while still delivering profits.
9. Collections by physician. This statistic can reveal a number of areas for your ASC to focus on for improvement, Mr. Brown says. Looking at it from an operational perspective, are you struggling to collect for one physician versus another? Can you identify a particularly difficult payor who is paying you at a slow rate or at a rate that you need to get paid? If so, do you need to go back to the negotiating table to renegotiate some of these contracts with these payors based on the mix that physicians are bringing to your ASC (looking at payor mix by CPT codes)? Do you have carve-outs on all of our payors, which might be critical if, for example, your surgery center focuses heavily on podiatry?
This statistic, like many you should track, can help your ASC improve its ability to cater to your physicians' needs. "We want the ASC to serve primarily as an extension of the physician's practice," Mr. Brown says. "If we're not able to accommodate a physician's cases and he or she has to jump all over town to do cases because the ASC can only allow them do some of the cases, the physician's practice efficiency is affected negatively.
"Can we funnel this down to where we can take this information — the collections, payor mix, CPT code — and create a more efficient operation for physicians, their practices and also physicians' patients," he says. "As we all know, outpatient cases are best served in an efficient surgery center."
10. Hours per case by physician. This is a statistic which should be noted for every case in the OR record. Your ASC should then go the extra step and have a staff member enter it into your patient accounting system. "Now you can compare it to physicians doing similar or the same cases," Mr. Brown says. "This will help you identify how you can be more efficient and productive for the care you provide."
You can benchmark this statistic against industry averages and identify if there is a physician you can work with to achieve a better time per case. Or perhaps your ASC can conduct a quality study using the data you gather.
Just be careful not to jump to conclusions if one of your physicians is taking longer on similar cases than other physicians. "There may be nothing wrong with what the physician is doing," Mr. Brown says. "Make sure you accommodate all physicians appropriately. There are some times where a physician may take longer and you might just need to manage the cases differently and make sure your staffing is scheduled appropriately. For faster physicians, do the same thing — move those cases through the system to accommodate the pace that physician is operating at."
Learn more about Meridian Surgical Partners.
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