Edward J. Gorz, CPA, accounting manager for MedHQ, a professional employer organization and business office outsourcing service for ASCs and other providers, provides guidance for six areas ASCs should focus within their supplies and labor costs to identify savings opportunities.
Labor
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Supplies
Supplies, drugs, implants and instruments/equipment hold the most potential for savings.
- Brand. Different brands may have products that perform better than others, offering opportunity to save via quantity or cost.
- Cost. Even though the government is squeezing competition out of other areas of the market, providers should institute a competitive bidding process on supplies purchases or revise their existing policy. As minimizing facility space becomes another method of cost reduction, quantity discounts will need to be carefully analyzed to see if any cost savings are gobbled up by increased lease costs for storing inventory.
- Leverage. Whenever possible and reasonable, providers should consider combining purchasing power to get additional cost savings.
Labor
- Flexibility. Wherever possible, providers should set flexible schedules — flexibility based on scheduled workload. Arranging shifts according to workload will allow labor to vary with volume, avoiding employees with down time on a "normal" shift.
- Cost. With a comprehensive human resources function in place, providers can monitor pay rates and job functions to ensure employees aren't being overpaid. ASCs aren't always large enough to adequately support functions like accounting, A/P, HR, and billing and collecting. Outsourcing may offer cost savings along with an upgrade of talent and performance.
- Cross-training. Often the workload is too much for one employee to handle yet not enough to justify two, or there are important duties that don't justify a full- or part-time position. In these cases cross training an employee to handle various duties can help cover the bases without stretching the budget.
Learn more about MedHQ.