Here are six quick steps to cut costs at ambulatory surgery centers.
1. Centralize supply ordering. Many ASCs lose out on potential savings by spreading supply chain duties among two or more people. A scrub tech might do the surgical supply ordering, a post-op nurse might order the pharmaceuticals and an executive assistant might be in charge of office supplies. Each person simply orders what is needed, rather than crafting a coordinated strategy where products are standardized and savings are identified with distributors or group purchasing organizations. "Supply ordering is too important an activity to be left uncoordinated," says Tom O'Bannon, senior director of national accounts at Amerinet. "This work should be overseen by one person at the ASC."
At smaller centers, the person doing this work would still retain her original duties, such as working as a scrub tech, but must be given sufficient time to do her supplies work. Also appoint a backup supply person and give both of them training on the basics of supply chain management. "The people ordering supplies do not need to have a complete knowledge of the products they are ordering, but they do need to be good facilitators," Mr. O'Bannon says.
2. Review office supplies for cost-cutting opportunities. Cost-reduction strategies used to ignore office supplies, but even this area is fair game in the current economy, says Larry Taylor, president and CEO of Practice Partners in Healthcare. Review prices and utilization of the current office supply vendor and estimate potential savings by moving to a smaller chain. Also, consider recycling opportunities for office supplies. Examine the materials the ASC is throwing away and determine whether the center might be able to reuse them. For example, when medical documentation has been scanned into its final digital format and the paper chart is no longer needed, the center might be throwing out charts, files, tabs and other items.
3. Review pharmacy expenses. Pharmacy expenses are a significant line item in most surgery centers. To assure the best pricing, review the potential for changes in drug purchasing. "Surgery centers often get into purchasing routines that are difficult to break," Mr. Taylor says. Invite competing vendors to propose lower prices for drugs. In addition to reviewing their base price, be sure to include other charges such as shipping rates and important services for the center, such as just-in-time inventory, regular shipping days per week and breadth of supply. Centers can even realize savings by contracting with some vendors outside their GPO, Mr. Taylor says.
4. Reduce time spent on pre-op assessment. Staffing is a significant cost for any ASC, so it should always be an area targeted for savings. One particular area within staffing costs surgery centers can find savings is in the pre-op assessment process. Lori Vernon, regional vice president of operations at Health Inventures, says the clinical staff member assigned to conduct pre-op assessment is often a highly paid individual, so finding a way to reduce the time dedicated to pre-op assessment can have a significant financial impact.
"There are a number of products coming on the market now that allow you to do pre-op assessments online," she says. "I know facilities that by implementing that product, they can truly customize the assessment to meet the needs of their facility and the FTE savings is pretty remarkable."
The online pre-registration/pre-op assessment process is more than just obtaining demographics and insurance information. Products are on the market that can collect a patient's history and physical, obtain current insurance information and give patients the opportunity to view, print and sign the patient bill of rights and ownership disclosure form. Having all of that online can helped drop many of our nursing pre-op calls from about 45 minutes to a 10 minute confirmation call.
5. Allow physicians to perform less profitable cases on occasion. An ASC can't consistently perform unprofitable cases without losing money overall, but that doesn't mean your center should reject every less-profitable case, says Dean Brown, MBA, CASC, CEO of Alabama Orthopaedic Clinic and administrator of The Orthopaedic Center at Springhill in Mobile, Ala.. His surgery center tries to look at the totality of a physician's case load rather than nitpicking each individual case. For example, if a physician brings nine profitable cases to the center and wants to perform one less profitable case, the center can accept the tenth case as long as the loss does not offset the earnings provided by the other cases.
He says this approach helps boost physician loyalty, which in turn contributes to center profits. "There are sports medicine cases that we lose a little bit of money on, but if the physician is bringing [overall profitable cases], we don't force them to take one case somewhere else," he says. He says this approach does not work if your center is too lenient with unprofitable cases: At The Orthopaedic Center at Springhill, a spine surgeon who wants to bring only unprofitable cases will not be suitable for the center.
6. Maximize staff productivity. Jesseye Arrambide, RN, BSN, CNOR, executive director of Oregon Outpatient Surgery Center in Tigard, says the staff member in charge of payroll tracks staff productivity on a regular basis. "She has all that information right at her fingertips, and on a two-week basis, when our payroll ends, she looks at the number of hours each staff member has worked," she says. "We then track that across each quarter and set goals for pre- and post-op and the OR." She likes to see the number of FTEs used for base staff decrease as volumes fluctuate. Tracking productivity lets the surgery center leadership compare historical case volumes with staffing levels.
Find projects for staff members to complete on slower days, so that your ASC remains productive while maintaining staff loyalty. Ms. Arrambide says her OR staff members will work on preference cards or complete an assigned monthly chore, such as cleaning out cabinets, wiping down stretchers or cleaning out refrigerators.
"Sometimes we'll have focused studies in our charting for quality improvement, and I'll say, 'You guys need to review this many charts and this is what we're looking for,'" Ms. Arrambide says. She takes staff suggestions for improvement projects, touting a relatively 'flat' management structure that allows for contribution at all levels. "I really like getting suggestions from the staff," she says. "I like to say that collectively, we have hundreds of years of experience."
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1. Centralize supply ordering. Many ASCs lose out on potential savings by spreading supply chain duties among two or more people. A scrub tech might do the surgical supply ordering, a post-op nurse might order the pharmaceuticals and an executive assistant might be in charge of office supplies. Each person simply orders what is needed, rather than crafting a coordinated strategy where products are standardized and savings are identified with distributors or group purchasing organizations. "Supply ordering is too important an activity to be left uncoordinated," says Tom O'Bannon, senior director of national accounts at Amerinet. "This work should be overseen by one person at the ASC."
At smaller centers, the person doing this work would still retain her original duties, such as working as a scrub tech, but must be given sufficient time to do her supplies work. Also appoint a backup supply person and give both of them training on the basics of supply chain management. "The people ordering supplies do not need to have a complete knowledge of the products they are ordering, but they do need to be good facilitators," Mr. O'Bannon says.
2. Review office supplies for cost-cutting opportunities. Cost-reduction strategies used to ignore office supplies, but even this area is fair game in the current economy, says Larry Taylor, president and CEO of Practice Partners in Healthcare. Review prices and utilization of the current office supply vendor and estimate potential savings by moving to a smaller chain. Also, consider recycling opportunities for office supplies. Examine the materials the ASC is throwing away and determine whether the center might be able to reuse them. For example, when medical documentation has been scanned into its final digital format and the paper chart is no longer needed, the center might be throwing out charts, files, tabs and other items.
3. Review pharmacy expenses. Pharmacy expenses are a significant line item in most surgery centers. To assure the best pricing, review the potential for changes in drug purchasing. "Surgery centers often get into purchasing routines that are difficult to break," Mr. Taylor says. Invite competing vendors to propose lower prices for drugs. In addition to reviewing their base price, be sure to include other charges such as shipping rates and important services for the center, such as just-in-time inventory, regular shipping days per week and breadth of supply. Centers can even realize savings by contracting with some vendors outside their GPO, Mr. Taylor says.
4. Reduce time spent on pre-op assessment. Staffing is a significant cost for any ASC, so it should always be an area targeted for savings. One particular area within staffing costs surgery centers can find savings is in the pre-op assessment process. Lori Vernon, regional vice president of operations at Health Inventures, says the clinical staff member assigned to conduct pre-op assessment is often a highly paid individual, so finding a way to reduce the time dedicated to pre-op assessment can have a significant financial impact.
"There are a number of products coming on the market now that allow you to do pre-op assessments online," she says. "I know facilities that by implementing that product, they can truly customize the assessment to meet the needs of their facility and the FTE savings is pretty remarkable."
The online pre-registration/pre-op assessment process is more than just obtaining demographics and insurance information. Products are on the market that can collect a patient's history and physical, obtain current insurance information and give patients the opportunity to view, print and sign the patient bill of rights and ownership disclosure form. Having all of that online can helped drop many of our nursing pre-op calls from about 45 minutes to a 10 minute confirmation call.
5. Allow physicians to perform less profitable cases on occasion. An ASC can't consistently perform unprofitable cases without losing money overall, but that doesn't mean your center should reject every less-profitable case, says Dean Brown, MBA, CASC, CEO of Alabama Orthopaedic Clinic and administrator of The Orthopaedic Center at Springhill in Mobile, Ala.. His surgery center tries to look at the totality of a physician's case load rather than nitpicking each individual case. For example, if a physician brings nine profitable cases to the center and wants to perform one less profitable case, the center can accept the tenth case as long as the loss does not offset the earnings provided by the other cases.
He says this approach helps boost physician loyalty, which in turn contributes to center profits. "There are sports medicine cases that we lose a little bit of money on, but if the physician is bringing [overall profitable cases], we don't force them to take one case somewhere else," he says. He says this approach does not work if your center is too lenient with unprofitable cases: At The Orthopaedic Center at Springhill, a spine surgeon who wants to bring only unprofitable cases will not be suitable for the center.
6. Maximize staff productivity. Jesseye Arrambide, RN, BSN, CNOR, executive director of Oregon Outpatient Surgery Center in Tigard, says the staff member in charge of payroll tracks staff productivity on a regular basis. "She has all that information right at her fingertips, and on a two-week basis, when our payroll ends, she looks at the number of hours each staff member has worked," she says. "We then track that across each quarter and set goals for pre- and post-op and the OR." She likes to see the number of FTEs used for base staff decrease as volumes fluctuate. Tracking productivity lets the surgery center leadership compare historical case volumes with staffing levels.
Find projects for staff members to complete on slower days, so that your ASC remains productive while maintaining staff loyalty. Ms. Arrambide says her OR staff members will work on preference cards or complete an assigned monthly chore, such as cleaning out cabinets, wiping down stretchers or cleaning out refrigerators.
"Sometimes we'll have focused studies in our charting for quality improvement, and I'll say, 'You guys need to review this many charts and this is what we're looking for,'" Ms. Arrambide says. She takes staff suggestions for improvement projects, touting a relatively 'flat' management structure that allows for contribution at all levels. "I really like getting suggestions from the staff," she says. "I like to say that collectively, we have hundreds of years of experience."
More Articles on Surgery Centers:
20 ASC Management & Service Company Leadership Moves
5 Reasons to Conduct Regular ASC Valuations
5 Tips for ASCs to Optimize Accounts Receivable