David Schlactus, CEO of Hope Orthopedics of Oregon and Willamette Surgery Center in Salem, publishes internal benchmarks based on CPT code and shares them with his physicians to incent them to cut costs. Here are three internal benchmarks he feels are essential to ensuring case profitability in an ambulatory surgery center.
1. Cut-to-close times. Mr. Schlactus says he publishes physician cut-to-close times because they represent a statistic the physician can control. If you include time spent in the pre-op and PACU areas, the information may be less useful because physicians cannot control the timeliness of other staff members or whether the patient experiences post-operative nausea or pain. Cut-to-close times, on the other hand, will allow physicians to compare their surgery times to their peers. If one physician takes significantly longer to perform a knee arthroscopy, he may want to look into his process to determine whether the time spent is clinically valuable.
Mr. Schlactus says in his experience, most physician outliers discover pockets of time that could be better spent during surgery. "A big issue for us was physicians talking on their cell phones in the OR," he says. "Or a colleague might come in and they get totally distracted. The patient is never in jeopardy, but it wastes 10 minutes." He says physicians may not realize that they spend time on the phone in the operating room until they see their cut-to-close times are significantly longer than their colleagues'. "Nobody wants to be the slowest guy," he says.
He says publishing cut-to-close times can also prompt important clinical discussions in the ASC. For example, for an ACL repair, the surgeon must choose between harvesting an extra tendon from the patient (an autograft) or shipping one in pre-made (an allograft). The pre-made tendon can cost around $2,000, but harvesting the patient's tendon takes an extra 20 minutes. "It really prompts the guys to have important clinical conversations about the best and most effective ways to do that surgery," he says.
2. Implant costs. Mr. Schlactus says his ASC has realized dramatic savings by sharing implant costs with physicians. "When the physicians started looking at implant costs, they would say, 'Hey, my implant cost is double yours. How are you doing that?'" he says. Mr. Schlactus says there are two basic factors that influence which implants physicians used: where they trained and who they know. If the physician trained at a university that used Arthrex instead of Mitek, for example, he might simply be more comfortable using the former brand of implant.
However, Mr. Schlactus runs into more problems with what he calls the "donut Joe" relationships — the ties between physicians and implant sales representatives that drive up costs for the ASC. "The doctors might meet them for drinks, play golf, go fishing or see them at the [American Academy of Orthopedic Surgeons] conference, and they come back saying, 'We have to use this new thing,'" he says. He publishes implant costs to show physicians how their choices affect total case profitability. He says while some implants may not be worth arguing over, those with significant price differences between brands are cause for a discussion.
3. Supply costs per case. Mr. Schlactus shows his physicians how much they spend on medical supplies per case to demonstrate that some brands are more expensive — and that wasted supplies only cut into case profitability. He says physicians may be incented to consider generic supplies or cheaper brands if they can see that their choices have a direct impact on surgery center profitability. He says the information is usually more influential with surgery center physician investors, who have a direct stake in the center's profitability — but non-investors can be swayed too if they see that their colleagues are performing cases at a lower cost.
Related Articles on Surgery Center Benchmarks:
50 Benchmarks on Surgery Center Case Volume
10 Metrics for Measuring Physician Performance
Appropriately Using Benchmark Collections Data
1. Cut-to-close times. Mr. Schlactus says he publishes physician cut-to-close times because they represent a statistic the physician can control. If you include time spent in the pre-op and PACU areas, the information may be less useful because physicians cannot control the timeliness of other staff members or whether the patient experiences post-operative nausea or pain. Cut-to-close times, on the other hand, will allow physicians to compare their surgery times to their peers. If one physician takes significantly longer to perform a knee arthroscopy, he may want to look into his process to determine whether the time spent is clinically valuable.
Mr. Schlactus says in his experience, most physician outliers discover pockets of time that could be better spent during surgery. "A big issue for us was physicians talking on their cell phones in the OR," he says. "Or a colleague might come in and they get totally distracted. The patient is never in jeopardy, but it wastes 10 minutes." He says physicians may not realize that they spend time on the phone in the operating room until they see their cut-to-close times are significantly longer than their colleagues'. "Nobody wants to be the slowest guy," he says.
He says publishing cut-to-close times can also prompt important clinical discussions in the ASC. For example, for an ACL repair, the surgeon must choose between harvesting an extra tendon from the patient (an autograft) or shipping one in pre-made (an allograft). The pre-made tendon can cost around $2,000, but harvesting the patient's tendon takes an extra 20 minutes. "It really prompts the guys to have important clinical conversations about the best and most effective ways to do that surgery," he says.
2. Implant costs. Mr. Schlactus says his ASC has realized dramatic savings by sharing implant costs with physicians. "When the physicians started looking at implant costs, they would say, 'Hey, my implant cost is double yours. How are you doing that?'" he says. Mr. Schlactus says there are two basic factors that influence which implants physicians used: where they trained and who they know. If the physician trained at a university that used Arthrex instead of Mitek, for example, he might simply be more comfortable using the former brand of implant.
However, Mr. Schlactus runs into more problems with what he calls the "donut Joe" relationships — the ties between physicians and implant sales representatives that drive up costs for the ASC. "The doctors might meet them for drinks, play golf, go fishing or see them at the [American Academy of Orthopedic Surgeons] conference, and they come back saying, 'We have to use this new thing,'" he says. He publishes implant costs to show physicians how their choices affect total case profitability. He says while some implants may not be worth arguing over, those with significant price differences between brands are cause for a discussion.
3. Supply costs per case. Mr. Schlactus shows his physicians how much they spend on medical supplies per case to demonstrate that some brands are more expensive — and that wasted supplies only cut into case profitability. He says physicians may be incented to consider generic supplies or cheaper brands if they can see that their choices have a direct impact on surgery center profitability. He says the information is usually more influential with surgery center physician investors, who have a direct stake in the center's profitability — but non-investors can be swayed too if they see that their colleagues are performing cases at a lower cost.
Related Articles on Surgery Center Benchmarks:
50 Benchmarks on Surgery Center Case Volume
10 Metrics for Measuring Physician Performance
Appropriately Using Benchmark Collections Data