Several factors can affect base salary and overall compensation for ASC administrators, leading to such variations as seen above. In this article, Greg Zoch, partner with Kaye/Bassman, discusses three key factors affecting ASC administrator compensation.
1. Bonuses have been impacted by the economy. Many surgery centers have used the recent economic downturn as an opportunity to evaluate processes and see how they can improve revenue. Part of this has been cutting bonuses or reducing compensation, according to Mr. Zoch.
ASCs have felt the real impact of the economy through a drop in procedure volume, as some patients have chosen to postpone procedures due to unemployment. Other centers are still doing well but are concerned over future impact of the economic downturn on the ASC. Administrators in this situation are not seeing their salaries cut, but they aren't receiving raises either, according to Mr. Zoch. "Some bonuses have been eliminated as a pre-emptive measure against potentially falling case volumes. The centers are also choosing to forgo raises, but if the center continues to be profitable, they will make up ground on the bonuses," he says.
2. Reimbursements have affected compensation. Similar to the effects of a down economy, unemployment and poor reimbursements have also affected ASC adminstrators' compensation and bonuses, according to Mr. Zoch. "Many ASCs are seeing lower reimbursements through Medicare and third-party payors as well as more patients who are unemployed or have no insurance," he says. "Like with the down economy, some ASCs have seen their volume affected more than others."
Common trends in how patients schedule surgery also may affect bonuses, according to Mr. Zoch. For example, ASCs often see a seasonal dip in the first quarter when deductibles are reset for many patients. Likewise, there is an upward trend in the fourth quarter as patients want to schedule surgery before the deductibles reset. As a result, many ASCs rely on compensation through bonuses.
3. Base compensation has continued to grow. Basic supply and demand has led base compensation for ASC administrators to grow. "There are not enough people who can successfully manage an ASC," Mr. Zoch says. "Competition equals increased pricing, and ASCs will continue to pay for these experienced professionals."
Healthcare reform may also drive this competition, according to Mr. Zoch. "The ASCs that are most adaptable and can meet the needs of A-list talent, including surgeons and patients, will be the ones that continue to thrive."
Tips for ASCs when setting administrator salaries
Mr. Zoch notes that there is always a slight disconnect between what a job should pay and what the market says it should pay. Therefore, ASCs should be flexible when determining base salaries and should not go below market value.
"There will always be candidates who think they should be paid more than what the market says and employers who think they should pay less," Mr. Zoch says. "The market is what the market is, and it really does no good to go against it. Likewise, in order to keep talent, ASCs should not pay 'just enough' to keep administrators there."
Mr. Zoch suggests using the ASC Association's ASC Employee Salary & Benefits Survey as a starting point, but he notes that ASC's should consider the limitations of the data of any survey. "Averages typically represent good-to-average talent and are accurate in terms of those who respond to the survey," he says. "ASCs should want to pay above average for above average talent."
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