Through the end of the year, ASC administrators and executives will be planning for big changes in 2020 and beyond.
Whether the budget is devoted to offering competitive staff compensation packages, supplies and implants, or expansion, leaders are taking stock of what they have today and what they need in the future.
Here are eight administrators answering the questions: Where do you spend the most in your budget and what is changing year-over-year?
Brooke Day. Administrator of Hastings (Neb.) Surgery Center: Salaries and benefits are consistently our highest expense, but our employees are our greatest asset, so it is justified. The general public may not understand the importance of having competent staff to support the surgeon performing their surgery, but we realize the impact they can have on outcomes. The workforce is changing and competitive salaries along with adequate benefits are key factors to retaining staff.
We have a management agreement and the benefits provided to us on an annual basis that are much more competitive than we would be able to offer on our own. Our employees understand the importance of this management agreement and are very supportive of the relationship we have with them. Salaries increase annually so we are constantly considering new service lines, new procedures and ways to decrease expenses.
Christine Washick, RN, CASC. Administrator of Triangle Orthopaedics Surgery Center (Raleigh, N.C.): For our center next year, we plan to spend most of our budget on staffing, implants and supplies. Increased demand for ASC setting access due to high deductible plans. Extended hours, weekend access, in addition to physical plant expansion are becoming more of a norm in ASCs. Cross training staff and creative scheduling are key to retain talented staff and provide work/life balance.
Kirsten Anderson. Administrator of Parkway Surgery Center (Myrtle Beach, S.C.): The majority of our expenses are in medical supply and implant costs as well as staff costs and benefits. As our volume increases, our medical supply costs and implants cost increase. Managing staff overtime and benefit costs is always an ongoing process.
In 2020 we plan to spend more time on case costing, managing costs, and analyzing surgeon use of OR block times. We try to be efficient in our processes but there is always room for improvement. We spent a lot of time in 2019 on upgrades to our facility and equipment. While you can never say you won't have to worry about equipment breakdowns and facility repairs, it feels like we are better prepared for the year ahead.
Jeffra Kinniard, BSN, RN, CNOR, ONC. Director of Operations-Parkview SurgeryONE (Fort Wayne, Ind.): I am anticipating 2020 to be a year of challenge with reimbursements. The center is focusing on a financial clearance program with the health system that owns us. We are hoping to provide patients with a better understanding of their insurance plans, deductibles, copays and out of pocket expenses prior to their surgical procedure. Unexpected financial responsibilities often disrupt the great outcomes of an elective procedure. We've trialed this on a small scale and received positive feedback from patients and families. The challenge will be to scale this to all of our patients while building a process that is efficient.
JoAnn M. Vecchio. Administrator and CEO of ASC of WNY (Amherst, N.Y.): We are always making room in our budget for new technology. As a multispecialty center, it is important to distribute focus among all specialties. As technology changes over all specialties we plan to utilize specialty committees to help the board navigate through it all.
Chariesse Fizer, RN, MSN, FACHE. Vice President of Clinical Operations and Ambulatory Services for AtlantiCare, a member of Geisinger Health (Atlantic City, N.J.): I plan to spend the most time on those same day and ambulatory surgeries that were inpatients in the previous budget. There has been an overall reimbursement for the shift from in- to outpatient, yet our processes have not changed for how we deal with the pre-op and immediate post-op for these patients. Some procedures, of course, will move to the ASC.
Chris Flores. CEO of East Loop Surgery Center (Odessa, Texas) and Vista Surgery Centers (Midland, Texas): Labor is generally driven by market factors. ASCs enjoy a structural advantage over our largest labor competitor the hospital as we have 'no call, no nights, no weekends,' unless you are doing 23-hour observations. I work for a large ASC chain that equalizes the benefit costs the hospitals enjoy over independent ASC owners.
As we chase the best and brightest, we do so in hopes of not escalating the labor cost for the entire market. We have a major unique cost driver: being located in the most productive oil field on the continent has created hyper wage inflation that has some carryover into the healthcare market. Supply costs are somewhat a commodity with multiple vendors for most products. The efficient use of supplies is mostly a function of guiding and managing the physicians. The concept of herding cats is operative here.
Beyond that, basic inventory control and wise buying are systemic processes. The 'everything else' in many ASCs has seen relief from lower interest rates. In my center this component is largely structurally fixed. The biggest change to answer that part of your question is the price/cost squeeze. Labor is increasing at above the consumer price index, supplies and everything else is tracking CPI. Medicare and third-party payers are increasing payments at less than CPI rates.
The sequester remains and the large payers are in the payment driver's seat. This squeeze makes it critical for us to find margin. For most ASCs this is a search for implant related procedures. For us due to unique factors we are working on pain management cases for the immediate future with replacement of fluoro and related equipment due to high use.
R. Todd Warren. CEO of GI Associates & Endoscopy Center (Flowood, Miss.): Our biggest expense could be the possible expansion of an additional room in one of our centers and scopes. The center's lease will also be ending so we'll face the decision to either lease or buy.