In a presentation at the 9th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference in Chicago on June 9, Chris Bishop, senior vice president, acquisitions and business development, Blue Chip Surgical Partners shared five tips, focusing on decreasing costs and increasing revenues, to improve the profitability of a surgery center.
1. Compress scheduling. Compressing the ASC's schedule to fewer days per week can lower clinical staffing costs by 20 percent. Although staff may be resistant to the change, the center can leave the door open to reopening on certain days if additional surgeons and their cases are recruited to the center.
2. Contracts. Analyze contracts quarterly to ensure volume expectations are met. Mr. Bishop said, however, success with contracting lies largely with the profitability of initial contract terms, which are made annually at best. As such, Mr. Bishop recommended centers bring in experts to negotiate contracts and never accept an insurer's initial offer.
3. Capturing cases. "Never stop recruiting new surgeons until you're at capacity," says Mr. Bishop. If the center meets capacity, he encourages centers to consider doing cases on Saturdays.
4. Case-mix enhancement. Consider adding specialties that draw high-paying cases, such as spine. Centers in states with 23-hour stay capability have an increased opportunity to shift higher paying, higher acuity cases to the outpatient setting, says Mr. Bishop. He recommends centers that add spine also consider adding pain management, which is a complementary specialty.
5. Case costing. Mr. Bishop says centers should case cost every case. To determine case costs, add the cost of supplies for the case to the cost of OR time (roughly $18 per minute, according to Mr. Bishop). This amount is then subtracted from reimbursement to determine net profit. Case costing should be presented monthly at board meetings, recommends Mr. Bishop.
1. Compress scheduling. Compressing the ASC's schedule to fewer days per week can lower clinical staffing costs by 20 percent. Although staff may be resistant to the change, the center can leave the door open to reopening on certain days if additional surgeons and their cases are recruited to the center.
2. Contracts. Analyze contracts quarterly to ensure volume expectations are met. Mr. Bishop said, however, success with contracting lies largely with the profitability of initial contract terms, which are made annually at best. As such, Mr. Bishop recommended centers bring in experts to negotiate contracts and never accept an insurer's initial offer.
3. Capturing cases. "Never stop recruiting new surgeons until you're at capacity," says Mr. Bishop. If the center meets capacity, he encourages centers to consider doing cases on Saturdays.
4. Case-mix enhancement. Consider adding specialties that draw high-paying cases, such as spine. Centers in states with 23-hour stay capability have an increased opportunity to shift higher paying, higher acuity cases to the outpatient setting, says Mr. Bishop. He recommends centers that add spine also consider adding pain management, which is a complementary specialty.
5. Case costing. Mr. Bishop says centers should case cost every case. To determine case costs, add the cost of supplies for the case to the cost of OR time (roughly $18 per minute, according to Mr. Bishop). This amount is then subtracted from reimbursement to determine net profit. Case costing should be presented monthly at board meetings, recommends Mr. Bishop.