Five ambulatory surgery center industry leaders share tips for cutting costs and boosting profits.
1. Ask volunteers to participate at the ASC. "Many people look for opportunities to volunteer and help people in their community, and we utilize volunteers who contact our facility through a partnership with nearby hospitals to do general office work," says Tina Troxel, business office manager at Physician Surgery Center in St. Louis, Mo.
Volunteers may be assigned to tasks such as creating brochures, filing or performing general office duties. School partnerships are another option to consider. "We partner with local schools to provide students externship opportunities within our center," says Ms. Troxel. "This helps us with completing medical coding, billing and transcriptions while providing the students applicable, relevant experience in the medical industry. We recently hired an employee from this program who had experience with us."
2. Negotiate for lower credit card processing fees. "If patients pay their co-payment by credit card, there's a good chance that the practice's merchant processor is keeping more than the risk model says that they need to," says Yosef Rabinowitz, the managing director of TBRC Cost Recovery in New York City. "That extra amount is pure profit to the merchant processor and purely unnecessary expense to the ASC."
Merchant negotiation firms can typically arrange for a better margin with the processing firm without the ASC having to change providers or swap out equipment, he says. "If the ASC processes $100,000 per month in credit or debit card transactions — other than American Express — and the negotiator knocks half of a percentage point off of the discount rate, the ASC can save several thousand dollars per year," says Mr. Rabinowitz.
3. Continually evaluate the cost of commonly used products. "We are always comparing our current products with competitor's offerings, and once our quality standards are met, we are often able to negotiate local agreements that offer substantial savings," says Patti Hoheisel, the materials manager at Minnesota Valley Surgery Center in Burnsville. "One example is disposable laryngeal mask airways. Competition is fierce in that market, but we've been able to reduce our cost per mask by 40 percent."
4. Consolidate products ordered through vendors. "Consolidating products ordered through vendors allows for more cost-efficient purchases," says Don Fox, vice president of supply chain for Nueterra, an ASC development and management company based in Leawood, Kan. ASCs can find large discounts when they consolidate orders under one vendor to increase bulk purchasing power. "Begin by creating a supply value committee of five to six members, including a physician and a clinician chairman, and with an initial focus on smaller-cost initiatives everyone can agree upon," he says.
5. Hone in on marketing efforts to attract new patients. ASCs can send marketing personnel to educate potential patients at civic healthcare forums, says Robert Saenz, president of VIP Medical Consulting in San Antonio, Texas.
"The ASC community must be more aggressive in educating patients about the benefits of using an ASC versus a hospital," he says. "Many people outside the healthcare business are often not aware of the closer care and attention they can receive by having their procedure performed at an ASC, not to mention the cost savings to the patient." Educating patients about the level of personal care in an ASC compared to a hospital with higher patient-to-nurse ratios will result in better awareness of the benefits of using an ASC, he says.
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1. Ask volunteers to participate at the ASC. "Many people look for opportunities to volunteer and help people in their community, and we utilize volunteers who contact our facility through a partnership with nearby hospitals to do general office work," says Tina Troxel, business office manager at Physician Surgery Center in St. Louis, Mo.
Volunteers may be assigned to tasks such as creating brochures, filing or performing general office duties. School partnerships are another option to consider. "We partner with local schools to provide students externship opportunities within our center," says Ms. Troxel. "This helps us with completing medical coding, billing and transcriptions while providing the students applicable, relevant experience in the medical industry. We recently hired an employee from this program who had experience with us."
2. Negotiate for lower credit card processing fees. "If patients pay their co-payment by credit card, there's a good chance that the practice's merchant processor is keeping more than the risk model says that they need to," says Yosef Rabinowitz, the managing director of TBRC Cost Recovery in New York City. "That extra amount is pure profit to the merchant processor and purely unnecessary expense to the ASC."
Merchant negotiation firms can typically arrange for a better margin with the processing firm without the ASC having to change providers or swap out equipment, he says. "If the ASC processes $100,000 per month in credit or debit card transactions — other than American Express — and the negotiator knocks half of a percentage point off of the discount rate, the ASC can save several thousand dollars per year," says Mr. Rabinowitz.
3. Continually evaluate the cost of commonly used products. "We are always comparing our current products with competitor's offerings, and once our quality standards are met, we are often able to negotiate local agreements that offer substantial savings," says Patti Hoheisel, the materials manager at Minnesota Valley Surgery Center in Burnsville. "One example is disposable laryngeal mask airways. Competition is fierce in that market, but we've been able to reduce our cost per mask by 40 percent."
4. Consolidate products ordered through vendors. "Consolidating products ordered through vendors allows for more cost-efficient purchases," says Don Fox, vice president of supply chain for Nueterra, an ASC development and management company based in Leawood, Kan. ASCs can find large discounts when they consolidate orders under one vendor to increase bulk purchasing power. "Begin by creating a supply value committee of five to six members, including a physician and a clinician chairman, and with an initial focus on smaller-cost initiatives everyone can agree upon," he says.
5. Hone in on marketing efforts to attract new patients. ASCs can send marketing personnel to educate potential patients at civic healthcare forums, says Robert Saenz, president of VIP Medical Consulting in San Antonio, Texas.
"The ASC community must be more aggressive in educating patients about the benefits of using an ASC versus a hospital," he says. "Many people outside the healthcare business are often not aware of the closer care and attention they can receive by having their procedure performed at an ASC, not to mention the cost savings to the patient." Educating patients about the level of personal care in an ASC compared to a hospital with higher patient-to-nurse ratios will result in better awareness of the benefits of using an ASC, he says.
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