Business Efficiencies: Part I

The San Antonio Spurs had more to celebrate in the spring of 2007 than an NBA Championship. The state-of-the-art Center for Special Surgery at Texas Center for Athletes arrived at the doorstep of the Spurs training facility that March.

For 10 years, the physician partners had served at the surgery center under a previous general management partner. In recent years, the underperforming surgery center’s profits plummeted, and it became apparent that its equipment and structure were outdated. When the decision was made to move the center to its new location near the Spurs complex, the physicians chose to purchase the general partner’s interest in the center and work with a turnaround specialist to improve its finances.

The center turned to Regent Surgical Health to help turn the ASC around. Regent worked with the center’s 12 physician partners to provide the 14,000-square-foot facility’s six operating rooms with the latest equipment and its administration with effective business practices. The collaboration is a stunning success — the new center dramatically increased its monthly volume of cases from 135 in March 2007 to nearly 300 three months later and continues to grow.

After acquiring the center, the physicians turned to Regent to ensure their venture’s profitability. Regent worked with the physician investors to renegotiate insurance contracts, to improve the case mix, and to organize efficient management, accounting and human resource support. With Regent’s assistance, the physicians were able to efficiently transfer to the new facility, losing only one workday in the process. Regent also was actively involved in establishing day-to-day operations and the hiring of surgery center schedulers and other staff.

This turnaround is truly the result of collaboration, teamwork and the use of best practices.

Let’s look at the keys to the turnaround.

The Center for Special Surgery at TCA found its niche in sports medicine. The theme of the building (Texas Center for Athletes) is based around care for the athletic population. The center’s case distribution reflects that fact — in the first six months, 33 percent of the cases seen were related to orthopedics, 18 percent to hands and 10 percent to podiatry. While developing a solid niche in the sports medicine field, Regent helped the Center for Special Surgery explore other specialties that could enhance revenues through more profitable reimbursement and increasing volumes.

The center has added neuro, pain and other orthopedic procedures, which has benefited the center through increased volume and improved reimbursement.

Regent solicited greater commitment from the owners and identified new owners. Recruitment of new surgeons is an ongoing process as is evaluation and periodic resyndication to generate revenue. In San Antonio, Regent sold the old facility and used that revenue to pay down the debt to improve the center’s financial picture.

The center sets its charges to be within the 80th percentile of its market to charge fairly and not fall behind its competitors.

Regent taught the center to use a tool for tracking staff labor costs by the hour. This helps the center anticipate case volumes and adjust its labor needs accordingly.

In order to get the best prices possible, the center tracks all its supply costs. Its goal is to reduce supply costs by 25 percent to 30 percent. Regular meetings with physicians help focus on expenses and how the center can save money on supplies. Sometimes it’s just a matter of education, presenting the facts and alternatives so owners can make a more informed decision.

Management needs to be enthusiastic about the success of the center. This sets a tone for the doctors, patients and staff. The volume of cases seen in the first month at the Center for Special Surgery exceeded the number of cases seen during any month for the center during the previous two years.

The pride of ownership fosters the physicians’ exceptional commitment to the center. The physician owners play a very active role in the development of the center. Success depends on the whole group sharing a good team environment and work ethic.

The center’s quality service and effective business practices will ensure its future success. “Word is getting around the community that this is an exceptional center with a bright future and that we are efficient and patient-oriented,” says administrator Eric Day. “That fact will continue to attract new physicians, patients and employees in the future.”

Following best practices can develop the team and improve financial scores for ASCs, and like the city of San Antonio, be able to celebrate more than one champion.