1. Encourage frequent communication between the ASC and physician offices. A key to improving the efficiency of orthopedic cases is opening and encouraging frequent communication between ASC front-office staff and physician offices, says Timothy Kremchek, MD, medical director at Beacon Orthopedics and Sports Medicine and a physician-owner of the clinic’s surgery center. Frequent communication helps ensure that the ASC schedules cases properly, obtains accurate and complete patient information and understands physicians’ preferences. For example, if a physician is performing a meniscus repair, his or her office staff should automatically communicate information about the instrumentation the ASC so that there is no missing instrumentation during the surgery, says Dr. Kremchek.
“Develop a relationship between the people in your office and those at the ASC so that information can easily go back and forth, and there are no lapses in communication,” says Dr. Kremchek.
2. Physician partners owning too much of the ASC. Physicians who own 10-20 percent of a center worth $12 million-$14 million are probably “overweight,” says Jon Vick, president of ASCs Inc. By that he means an excessively high proportion of their overall assets are in the ASC. This isn’t desirable because the center is an “illiquid” asset that cannot easily be turned into cash when needed. He advises investing more of one’s wealth in liquid assets such as stocks. “When you have $5 million in total assets and $3 million of that is invested in the ASC and the real estate, then you’re considered overweight,” Mr. Vick says. Ideally, 40 percent of investments should be in stocks, 30 percent in bonds and only 30 percent in other assets, including an ASC.
3. The absence of a human resources staff. According to Robin Lacine, the executive director of business development at MedHQ, providers can improve efficiency and reduce cost by using expert HR, payroll and accounting services that also specialize in the medical industry. Such specialists already have an understanding of the unique accreditation and compliance issues, industry standards and potential areas of risk commonly confronted by ASCs.
In HR, it’s important to maintain a healthy balance between serving the company and serving the employees. John Merski, the executive director of HR services at MedHQ, says that favoring one over the other may result in ineffective service to both “clients.” In addition, HR should bolster rather than burden managers and employees. As Mr. Merski says, “You know HR is good when you don’t know it’s there.”
Many people view administrative services as an expensive necessary evil — barely necessary at that. But in order for any organization to succeed, the bills need to be paid, the money collected, the performance tabulated and recommendations for improvement implemented. Administrative services, good administrative services, can help to identify and capture real savings in addition to the blocking and tackling any organization needs every day.
4. Letting payor contracts roll over for another year. ASCs must stay on top of their contracts to ensure the payment rates cover their costs and provide adequate profit. Eric J. Woollen, vice president of managed care for Practice Partners in Healthcare, says an ASC should never pass up an opportunity to renegotiate a contract upon renewal. “You always want address these because cost structure changes every year, such as changes in case mix and changes in overall costs,” he says.
Jay Rom, president of Blue Chip Surgical Center Partners, recommends ASCs administrator work with payors to negotiate rates that cover costs and provide a reasonable profit. If these negotiations fail, administrators should educate their physicians about which cases from which payors are not financially feasible in the ASC because the reimbursement is less than the cost, he says. Mr. Woollen echoes his sentiment. “Our challenge is to demonstrate to payors that we’re providing value and costs savings for plans and for the patients because our setting is more cost-effective than the hospital,” he says. “Because of co-insurance, rising deductibles and increased cost sharing, we’re ultimately saving both the plan and the patient money.”
