Daily Ways to Save Money Abound at ASCs

Sage Advice

An overall financial plan is vital, but is impotent without the day-to-day operational efficiencies that can make or break any business, including ambulatory surgery centers (ASCs). In the end, the little things really do matter.

Some steps that ASC owners or administrators can take to keep costs down include offering flexible staffing hours to meet scheduling needs without incurring overtime, says Edward Hetrick, president of Facility Development & Management. He says that ASC team members should:

• Get involved with group purchasing organizations (GPOs) 
• Conduct a pre-operative interview with a patient one week prior to the procedure, and confirm appointments on the phone the night before a scheduled case (to minimize last-minute cancellations) 
• Hire a well-trained and organized materials manager to work directly with the site administrator 
• Scan all materials that need to be kept. 

This reduces paper and storage costs Use e-mail correspondence instead of faxing Make certain all office supplies are ordered and distributed by the business office manager 

• Require that surgical packs and equipment are not opened prior to patient and physician arrival 
• Do not hire more staff than necessary 

A huge cost is payroll, and wages need to be competitive if you are going to recruit and retain the right staff, says Roger Pence, BBA, MHA, administrative consultant president of FWI Healthcare. A delicate balance must be met and can be found by trading benefits for an hourly rate.

“For example, if an employee’s spouse has health insurance coverage, offer the employee a few more cents per hour versus your insurance coverage,” Pence says. “Hire as many part-time/ PRN persons as practical with no benefit costs. And do not forget, your competition may offer more/broader benefits but you offer better work hours and ‘no call.’”

Pence suggests that overtime should be obsolete, and that if an employee comes in early, they should leave early, or make up for it the next day by working a shorter schedule.

Greater staff flexibility can be found when members are cross-trained, says Stephanie Ellis, RN, CPC, president of Ellis Medical Consulting, Inc. She recommends analyzing the facility’s work flow for efficiencies — for example, examine use of procedure rooms. She also has the following advice:

• With implants and supplies, try to standardize inventories, and don’t keep large inventories of items that are not used often 
• Examine GPO membership to see if there are possible improvements in buying arrangements 
• Review physician preference cards 

Owners and administrators can constantly monitor their expenses on a monthly, biweekly or weekly basis, depending on the type and activity of the expense, according to Susan Hollander, BSN, MBA, FACHE, vice president of operations at National Surgical Care.

“For example, staff costs should be managed and monitored weekly, but the biweekly payroll report is your evidence of success,” Hollander says. “Medical and implant supply costs can have wide variations based on your case volumes and specialty mix, so monitoring them biweekly or monthly will eliminate any surprises.”

The good news is that since most ASCs are much smaller than hospitals, they are also much easier to manage, says Keith A. Bolton, president of Nashville-based Specialty Surgery Centers of America.

“To me, the joy and beauty of our industry is that we who own, manage and operate surgery centers, really run small businesses,” Bolton says. “Unlike a 1,000-bed hospital, our businesses are simple, fairly predictable, and not difficult to understand. We don’t have big committee structures, matrix management, and a complicated organizational structure.”

It’s still important to get in the trenches, however, if efficiency is to be maintained.

“As small business managers and owners, we have to get down and dirty in the detail,” Bolton adds. “I look at every invoice that comes in the door. I sign every check that goes out; I regularly sit down with our business office staff and review the status of every open account on our books. I know how many overtime hours were worked yesterday. I also get a productivity report monthly showing cost per case, overtime, hours, etc. In short, the data required for us to operate and manage day-to- day is readily available. It just goes to show you that ‘small is beautiful.’”

Pitfalls

One common problem is when the surgery center serves as the lending institute for patients who have co-payments, deductibles and coinsurance, Hollander says.

“There are companies who will serve as a lender for the qualified patient, eliminating the need for the surgery center to assume the risk, chase the patient and in the end, spend dollars on a daily basis for a low return,” she says.

ASC owners and administrators should avoid the following money pits when it comes to day-to-day circumstances, Hetrick cautions:

• In terms of the ASC verifying all insurance coverage and deductibles, do not count on the office to perform this task 
• Pay special attention to cases that have a high disposable procedure component and/or a high rental fee

Waste Not, Want Not

One of the best ways to save money is to look at costs periodically, and to make use of what you already have. The bigger the dollar amount, the more frequent the assessments should be, Pence says. It is smart to form a list of items that are frequently used, and a list of request bids from vendors at least every other year, if not annually.

“Progress through the list (from high - to lowuse items) to check prices,” Pence advises. “Can you get better deals, even over the purchasing group? Do not price all items at the same time. Pick your top-used … items (five to 20) for comparison today, then move down the list tomorrow and the next day. This way you will not burn out.”

Inventory should be as non-existent as possible since it takes up shelf space and revenue. Vendors should deliver “just-in-time,” or should maintain your stock under consignment, Pence says.

Everything (within reason) should be standardized.

“Did all your surgeons not agree to help keep costs low by selecting the same brand of gloves, implants from the same manufacturer, and to use no more than three antibiotics?” Pence asks. “Remind them to cut back on differences (and to) not order special items without approval.

Implement a policy that requires surgical staff consensus to add to or change standard items or make special orders.”

Fortunately, what is good for the bottom line is sometimes what’s good for the environment. Reuse should be considered, Hollander says.

“I think the most wasted material in both the office and clinical components of a surgery center is not recycling,” she adds. “In other words, we are wasting our precious natural resources. Take paper, for instance, or instrument tray wraps. When surgery centers are located in communities without mandatory recycling, we fail to reuse all the cardboard, paper and plastics.”

Pence agrees that the most wasted resource is paper, followed by electricity.

“How many lights are on in rooms not in use?” he asks. “Can you identify all the equipment items that are plugged in right now, spinning that meter dial? How about after hours? Or better yet, all weekend? If it is not in use, turn it off. If you are not using a room, especially an OR (operating room), why even open the door and turn on the lights?”

Petty Cash

The most simple way to keep track of money is to, well, keep track of money. All petty cash purchases should be approved by an administrator prior to being made, Hetrick says.

Ellis agrees that petty cash needs to be in the hands of one trusted employee, and needs to be locked. She also believes that a ledger should be kept, and that it should include all deposits and disbursements.

“It needs to be counted and balanced on a regular basis by two people,” Ellis says. “If it is used as a cash box for patients who pay cash, written receipts need to always be given.”

Petty cash use should be clearly outlined in policy and a form, Hollander adds. The money should be counted on a routine basis, and should not be in excess of what is needed for one month.

At Clarksville Surgery Center in Clarksville, Tenn., the staff treats petty cash as a bank would, says Kristy Zimmerman, the center’s business office manager.

“First, we keep it under lock and key so that only a limited number of people have access to it,” Zimmerman says. “Second, we have a log that we keep which shows what came in and what went out. Finally, we require a receipt for all expenditures. We do not mix our petty cash with our patient cash.” 

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