Owning and operating an ASC is a challenging undertaking, but there are some steps administrators can take to cut inefficiencies and maximize profitability.
Three healthcare experts offered their insights on the subject June 14 during Becker's 16th Annual Future of Spine + The Spine, Orthopedic and Pain Management-Driven ASC Conference in Chicago. David Posch, president and CEO of American Surgical Centers;
Tammy Blackburn, BSN, RN, director of nursing at Surgical Center of DuPage Medical Group; and Mark Misplay, vice president of sales at Cardinal Health, were the panelists.
Here are three insights from the panel:
1. "Some big projects work and some don't. It depends on the number of practices you're getting involved in. I'd rather build smaller and better centers than bigger and fewer. You have to be mindful of how many specialties you're bringing in and be leaner if you're not necessarily a single specialty," said Mr. Posch. "I would also advise highly against setting up the entity that owns [a] surgery center as a private corporation. If you do that you can't bring [a] corporate partner in down the road. After your first three years, your facility should be maxed on [the] amount it can bring in, and you might want to think about bringing in a corporate partner. You have to know when to hold them and know when to fold them."
2. "The challenges are getting the contracts with the payers. It can be profitable, but then the biggest challenge there is getting all your physicians on board to standardize procedures. You really need one vendor, but at our surgery center we literally used every vendor out there that makes implants and that was not good for us at all. We finally got all of our physicians together in the same room to try and standardize," said Ms. Blackburn. "I've sat through talks like this before where you get everyone together and open up the trays and pick one, but that's not close to how that works. It was a huge struggle, and it probably took us six to 12 months to vet out all the vendors."
3. "When you consider supply cost for ASCs as a percentage to net revenue range from 17 percent – 25 percent, it's no small undertaking managing inventory cost while looking for opportunities to drive waste out of your supply chain. Whether you're dealing with physician preference items or commodity items, there is often duplication and lack of data or inventory control systems, that can help a center know what to look for or where to start" said Mr. Misplay. "Centers who manage their supply cost successfully have a supply chain savings strategy. They baseline their current spend, what they want to target, how they want to target it, and benchmark and measure success."