Although human resources is one of the largest line items for ASCs, it's often a missed opportunity for savings, according to MedHQ's 10-Point HR Audit.
Here are 10 HR inefficiencies ASCs can target to result in significant savings.
1. 401K. Three components of 401K plans drive up costs: third- party management, investment fees and the registered investment advisor. Wrap RIA and TPA/compliance services into one program to save between $3,500 and $12,000 annually.
2. Health plan. Limit annual increases to 2 to 4 percent a year rather than 10 to 20 percent to save up to $36,000 annually. Track the monthly insurance bill to ensure former employees are removed from coverage when they should be, which can save $8,000 to $20,000 each year.
3. Paid time off. ASCs should employ process automation such as outsourcing PTO administration and employee self-service. When a center reduces the hours managers spend on administering programs such as PTO, onboarding and offboarding, it can generate savings of $5,000 to $10,000 annually, depending on employees' salaries.
4. Worker's compensation insurance. Worker's compensation claims might materially impact an ASC's insurance premium about 20 percent of the time. Promote workplace safety to reduce the risk of accidents, which can translate to $3,000 to $25,000 in insurance premiums for a $1 million payroll.
5. Vendor consolidation. Many ASCs use 20-plus vendors for support services. Bundle services for discounted fees and fewer mistakes to save management hundreds of hours yearly.
6. Open enrollment. It can cost 40 to 80 hours to prepare for and administer an open enrollment period. Combine open enrollment preparation with outsourced evaluation and benefits renewal decision-making to save up to $10,000 annually.
7. Employee relations risk management. Ignoring or improperly managing underperforming employees comes with many risks and significantly impacts operating income. Address risk areas such as discrimination, employee attendance, inappropriate work behavior and sexual harassment to avoid claims amounting to as much as $100,000.
8. Compensation. Help employees understand the rationale behind compensation programs to reduce the likelihood of turnover and consequential replacement costs, resulting in savings of up to $12,000 per person.
9. Unemployment claims management. The tax rate percentage for unemployment claims can be negotiated to a lower rate. Centers can save $3,500 to $10,000 each year by better managing unemployment tax.
10. Good culture. Recruit a group of 20 to 40 individuals with similar values, and establish good HR practices, compensation plans and benefits to reduce employee turnover. Retaining one full-time employee saves $10,000 to $12,000 worth of replacement costs.