5 Ways Surgery Centers Can Rein in Costs and Build Physician Relationships

Ross Alexander, MBA, the administrator of The Surgery Center of Fort Collins (Colo.), a multi-specialty ASC owned and managed by a group of surgeons, Poudre Valley Health System and Surgical Care Affiliates, shares some ideas on how surgery centers can trim costs and foster fruitful physician relations as these efforts become more critical under healthcare reform.

1. Make sure staff size fits your center's needs. It is critical for an ASC to maintain the correct number of staff to meet its case volume and mix. The best way to do this is to benchmark against other comparable centers and make sure staff levels are monitored often. "It's more important to know how many nurses you're using than what you're paying them," Mr. Alexander says. "Most surgery centers pay market rates; it's knowing how many nurses you need to provide care efficiently and safely."

2. Make efficient use of block time and scheduling. Block time and scheduling of ORs should be managed to allow for the most contiguous use of case times, Mr. Alexander says. "The more contiguous your schedule, the better." In the course of preparing for and receiving AAAHC accreditation, Mr. Alexander's surgery center did extensive benchmarking of its OR use. While the center ultimately increased OR use rate and block utilization rate, it had to balance efficiency against physicians' desire to have operating room time available when they wanted it, which Mr. Alexander concedes can be a delicate balancing act.

Measuring utilization rates is necessary to improve efficiency. "It is something we now track on a quarterly basis," Mr. Alexander says. Measurement, however, is only the starting point. The goal is maintaining and continually improving upon what has been measured.

3. Be aggressive in dealing with supply costs. Focusing on supplies can bring significant savings, Mr. Alexander says. This is especially true of a center like the Fort Collins ASC, which performs neurospine procedures and can have large implant costs. Developing relationships with a group purchasing organization and with vendors is a must, as is monitoring GPO contracts to ensure you continue to receive the best prices.

Remaining vigilant about supply costs also means staying open to alternative products and services and maintaining a willingness to push back against vendors who impose price increases even in a low-inflation environment, Mr. Alexander says. "You really have to stand up and explain to vendors ASCs receive fixed case rates and say we really can't take this kind of price increase."

At times it is also worth looking into outsourcing some functions if there is value to be gained. For example, the Fort Collins center outsources its payor contracting to Eveia Health Consulting & Management. "They bring a national perspective in dealing with payors that we just don't have," Mr. Alexander says. SCA has also been helpful in providing access to corporate level vendor contracts that can  often lead to savings a center would not otherwise have been able to tap into, he says.

4. When building physician relationships, focus not only on recruiting, but also on retaining. Physicians with an existing relationship to a center are often the most likely to bring in additional case volume, Mr. Alexander suggests. For that reason, fostering relationships and open communication with physician partners should be a top priority. If physicians say a new piece of equipment or a contract with a different payor would help them bring more business to your center, it is worth following up on their suggestions, he says.

Since most physicians already have relationships with a surgery center, focusing on existing physician partners increases the likelihood they will notify the center of new surgeons joining their practice who may be interested in bringing cases to your ASC, Mr. Alexander says.

5. Spread the word about ASCs. In this highly-politicized climate, and with healthcare reform beginning to take shape, it is more important than ever for ASC owners to join their state and national associations and get to know their legislators to educate them about the role ASCs play in the broader healthcare arena. "In my opinion, we ARE healthcare reform," Mr. Alexander says. "It was disappointing not to see more in the healthcare reform bill about ASCs. If everyone in the industry stood up and made their voices heard, we'd be in a better position."

Contact Mr. Alexander at ralexander@surgerycenterftcollins.com