Lexa Woodyard, administrator of Cabell Huntington Surgery Center in Huntington, West Virginia, discusses how the surgery center managed to cut expenses by $200,000 over one calendar year.
1. Rethought all RN staff in pre/post-op areas. Ms. Woodward's center originally employed an all-RN staff, with the exception of surgical techs that staffed the operating rooms. Ms. Woodyard and the surgery center's general partner decided to hire a licensed practical nurse to work in the pre-op area to gather paperwork, collect test results and perform pre-op phone calls with patients. "LPNs get paid $12-$15 less on the hour than an RN," she says. She says it is important to hire an LPN with a strong pharmaceutical knowledge background to save money and maintain quality.
2. Changed the reporting structure. Previously, the business office staff at Cabell Huntington Surgery Center reported to an office coordinator instead of the administrator. When the office coordinator position became vacant, Ms. Woodyard and the surgery center's general partner decided not to fill the position. Instead, Ms. Woodyard asked the business office staff to report directly to her. "We were lucky, because with the staff we have in the office now, they're well-versed in their job responsibilities and they know how to take care of problems," she says. "They're independent, self-sufficient and cross trained in more than one area in the business office, so it really hasn't been that big of an adjustment." She says asking the staff to hold their issues and questions until a certain time of day, when Ms. Woodyard has the opportunity to answer them, has helped organize time. "I try to equip all the staff with the knowledge and resources they need to fight their own fires," she says.
3. Dissolved an unnecessary position. Ms. Woodyard and the surgery center's general partner also decided to dissolve one of the two nurse manager positions at her center. "We had two nurse managers in the facility, and the facility isn't that big; one nurse manager could easily handle the entire clinical staff," she says. One of the nurse managers was shifted into the role of clinical manager, meaning she oversees all the clinical staff, focuses on administrative duties and occasionally works with patients. This shift let Ms. Woodyard create a charge nurse role in the OR area and pre/post-op area to assist the clinical manager with daily operations and staff scheduling.
4. Implemented a staffing tool to help flex staff hours and reduce FTEs. To make sure the center was spending the appropriate amount of money on staffing, Ms. Woodyard implemented a staffing tool that adjusts staffing levels based on case volume and specialty. "Depending on the cases we're doing, the tool will allot more or less hours, and the clinical staff will flex their hours down to meet the clinical volume for the day," she says. She says the staffing hours will vary significantly depending on case load; sometimes staff will be at the center for four hours a day, and sometimes they'll stay for nine hours. The center looks at predicted case volume in the middle of every week for the following week and then adjusts staffing levels over the course of the week as case volume changes.
The center also flexes hours in the business office area. "We do it according to budgeted case volume," Ms. Woodyard says. "It's harder for the folks that do collections or insurance verification to stop after four hours and expect to keep up with all the caseload. Depending on the budgeted caseload, each office member may each take a few hours off of each week to make it more consistent for them every week." The center's staffing tool also identified the lack of need for a part-time position in the business office. "Our office staff rotates as needed to the registration desk," Ms. Woodyard says. "Our case volume varies from day to day and is such that the staff is well able to handle the workload minus a part-time individual."
5. Adjusted the annual raise pool based on reimbursements. Before Ms. Woodyard and the center's general partner calculates the annual raise pool for surgery center staff, they look at predictions for reimbursement changes over the following year. If the center's top insurers show a reimbursement increase, the annual raise pool is adjusted accordingly. If the insurers show a decrease, the pool is adjusted to meet the center's predicted losses. "In years past, we were giving out salary increases greater than what we were gaining in additional reimbursement," she says. "If we weren't getting the reimbursement increase, we were spending more money than we were getting." She says the center will adjust the raise pool if an insurer raises reimbursement rates significantly in the middle of the year.
6. Extended equipment leases. Ms. Woodyard says her center looked at its equipment leases to determine whether the leases could be restructured. If a piece of equipment was on a five-year lease and the center did not foresee needing additional equipment after the lease ended, they tried to stretch the lease to seven years to decrease the monthly payments.
7. Switched vendors. Cabell Huntington Surgery Center changed linen vendors by bidding out to a local hospital. "The hospital ended up beating the bid from the national chain [we used previously], and they have so far surpassed the national chain in quality, price and dependability," Ms. Woodyard says. Ms. Woodyard says she considers three or four bids for every purchase decision to make sure the center receives a competitive price. The center also switched vendors for its biomed contracts, changing from a national chain to a local hospital. "Some national chains offer premium packages where they claim they'll save you money by managing all your biomed contracts," she says. "To make a long story short, we decided it wasn't worth the extra money to pay them to manage the individual biomed contracts." When she approached the equipment's direct biomed companies individually, she found they would offer lower prices if she bought their services directly, rather than through the national chain.
8. Increased case costing efforts. Cabell Huntington Surgery Center costs out its top volume cases to determine which procedures are profitable according to insurance carrier and which should be sent elsewhere. "For example, there's an ablation procedure that a lot of GYN doctors like to do, and some of them like to use a device that costs around $1,200 for that case," Ms. Woodyard says. "Some insurance companies don't even reimburse enough to cover the device." She says the center looks at case costing on a per-procedure, per-insurance basis and then makes sure to communicate with physicians and office staff about which payor/procedure combinations are appropriate for the center.
9. Worked with its management company to adjust the management fee. Not all surgery centers have a management company willing to adjust its management fee, but Ms. Woodyard found success in asking her management company to assess how the management fee was calculated. "They found there were a number of management firms out there that use bad debt in the calculation of the management fee to help adjust that fee," she says. "That was something they were willing to take on, and that ended up lowering our management fee."
10. Transferred a mini C-arm lease to a local hospital. A change in reimbursement meant Cabell Huntington Surgery Center's top insurers were not reimbursing enough to cover the cost of implants for certain procedures. In response, Ms. Woodyard approached a local hospital and asked if they would like to take over the lease for the center's mini C-arm. "[They took the lease over] at least until we could get contracts negotiated to get better rates or carve-outs," she says.
Conclusion
"Every day is a struggle for ASCs in today's economy," Ms. Woodyard says. "Cooperative staff and surgeons can make or break an ASC. She says her center is blessed with staff and surgeons who are willing to make an effort to cut costs, increase revenue and improve patient and surgeon satisfaction. "The staff are my skilled experts and I trust their input and knowledge," she says. "You don't have to be a nurse to run a surgery center, but you do have to have excellent, highly professional and proactive nurses on staff to help push the center forward."
Read more advice on operating a successful surgery center:
-5 Critical Questions to Ask Before a Surgery Center Invests in Spine
-18 Statistics on Ophthalmology in Ambulatory Surgery Centers
-6 Questions Prospective Surgeons Do Not Typically Ask Recruiting Surgery Centers
1. Rethought all RN staff in pre/post-op areas. Ms. Woodward's center originally employed an all-RN staff, with the exception of surgical techs that staffed the operating rooms. Ms. Woodyard and the surgery center's general partner decided to hire a licensed practical nurse to work in the pre-op area to gather paperwork, collect test results and perform pre-op phone calls with patients. "LPNs get paid $12-$15 less on the hour than an RN," she says. She says it is important to hire an LPN with a strong pharmaceutical knowledge background to save money and maintain quality.
2. Changed the reporting structure. Previously, the business office staff at Cabell Huntington Surgery Center reported to an office coordinator instead of the administrator. When the office coordinator position became vacant, Ms. Woodyard and the surgery center's general partner decided not to fill the position. Instead, Ms. Woodyard asked the business office staff to report directly to her. "We were lucky, because with the staff we have in the office now, they're well-versed in their job responsibilities and they know how to take care of problems," she says. "They're independent, self-sufficient and cross trained in more than one area in the business office, so it really hasn't been that big of an adjustment." She says asking the staff to hold their issues and questions until a certain time of day, when Ms. Woodyard has the opportunity to answer them, has helped organize time. "I try to equip all the staff with the knowledge and resources they need to fight their own fires," she says.
3. Dissolved an unnecessary position. Ms. Woodyard and the surgery center's general partner also decided to dissolve one of the two nurse manager positions at her center. "We had two nurse managers in the facility, and the facility isn't that big; one nurse manager could easily handle the entire clinical staff," she says. One of the nurse managers was shifted into the role of clinical manager, meaning she oversees all the clinical staff, focuses on administrative duties and occasionally works with patients. This shift let Ms. Woodyard create a charge nurse role in the OR area and pre/post-op area to assist the clinical manager with daily operations and staff scheduling.
4. Implemented a staffing tool to help flex staff hours and reduce FTEs. To make sure the center was spending the appropriate amount of money on staffing, Ms. Woodyard implemented a staffing tool that adjusts staffing levels based on case volume and specialty. "Depending on the cases we're doing, the tool will allot more or less hours, and the clinical staff will flex their hours down to meet the clinical volume for the day," she says. She says the staffing hours will vary significantly depending on case load; sometimes staff will be at the center for four hours a day, and sometimes they'll stay for nine hours. The center looks at predicted case volume in the middle of every week for the following week and then adjusts staffing levels over the course of the week as case volume changes.
The center also flexes hours in the business office area. "We do it according to budgeted case volume," Ms. Woodyard says. "It's harder for the folks that do collections or insurance verification to stop after four hours and expect to keep up with all the caseload. Depending on the budgeted caseload, each office member may each take a few hours off of each week to make it more consistent for them every week." The center's staffing tool also identified the lack of need for a part-time position in the business office. "Our office staff rotates as needed to the registration desk," Ms. Woodyard says. "Our case volume varies from day to day and is such that the staff is well able to handle the workload minus a part-time individual."
5. Adjusted the annual raise pool based on reimbursements. Before Ms. Woodyard and the center's general partner calculates the annual raise pool for surgery center staff, they look at predictions for reimbursement changes over the following year. If the center's top insurers show a reimbursement increase, the annual raise pool is adjusted accordingly. If the insurers show a decrease, the pool is adjusted to meet the center's predicted losses. "In years past, we were giving out salary increases greater than what we were gaining in additional reimbursement," she says. "If we weren't getting the reimbursement increase, we were spending more money than we were getting." She says the center will adjust the raise pool if an insurer raises reimbursement rates significantly in the middle of the year.
6. Extended equipment leases. Ms. Woodyard says her center looked at its equipment leases to determine whether the leases could be restructured. If a piece of equipment was on a five-year lease and the center did not foresee needing additional equipment after the lease ended, they tried to stretch the lease to seven years to decrease the monthly payments.
7. Switched vendors. Cabell Huntington Surgery Center changed linen vendors by bidding out to a local hospital. "The hospital ended up beating the bid from the national chain [we used previously], and they have so far surpassed the national chain in quality, price and dependability," Ms. Woodyard says. Ms. Woodyard says she considers three or four bids for every purchase decision to make sure the center receives a competitive price. The center also switched vendors for its biomed contracts, changing from a national chain to a local hospital. "Some national chains offer premium packages where they claim they'll save you money by managing all your biomed contracts," she says. "To make a long story short, we decided it wasn't worth the extra money to pay them to manage the individual biomed contracts." When she approached the equipment's direct biomed companies individually, she found they would offer lower prices if she bought their services directly, rather than through the national chain.
8. Increased case costing efforts. Cabell Huntington Surgery Center costs out its top volume cases to determine which procedures are profitable according to insurance carrier and which should be sent elsewhere. "For example, there's an ablation procedure that a lot of GYN doctors like to do, and some of them like to use a device that costs around $1,200 for that case," Ms. Woodyard says. "Some insurance companies don't even reimburse enough to cover the device." She says the center looks at case costing on a per-procedure, per-insurance basis and then makes sure to communicate with physicians and office staff about which payor/procedure combinations are appropriate for the center.
9. Worked with its management company to adjust the management fee. Not all surgery centers have a management company willing to adjust its management fee, but Ms. Woodyard found success in asking her management company to assess how the management fee was calculated. "They found there were a number of management firms out there that use bad debt in the calculation of the management fee to help adjust that fee," she says. "That was something they were willing to take on, and that ended up lowering our management fee."
10. Transferred a mini C-arm lease to a local hospital. A change in reimbursement meant Cabell Huntington Surgery Center's top insurers were not reimbursing enough to cover the cost of implants for certain procedures. In response, Ms. Woodyard approached a local hospital and asked if they would like to take over the lease for the center's mini C-arm. "[They took the lease over] at least until we could get contracts negotiated to get better rates or carve-outs," she says.
Conclusion
"Every day is a struggle for ASCs in today's economy," Ms. Woodyard says. "Cooperative staff and surgeons can make or break an ASC. She says her center is blessed with staff and surgeons who are willing to make an effort to cut costs, increase revenue and improve patient and surgeon satisfaction. "The staff are my skilled experts and I trust their input and knowledge," she says. "You don't have to be a nurse to run a surgery center, but you do have to have excellent, highly professional and proactive nurses on staff to help push the center forward."
Read more advice on operating a successful surgery center:
-5 Critical Questions to Ask Before a Surgery Center Invests in Spine
-18 Statistics on Ophthalmology in Ambulatory Surgery Centers
-6 Questions Prospective Surgeons Do Not Typically Ask Recruiting Surgery Centers