1. Stay updated on trends in the device industry to cut implant costs. John Cherf, MD, president of OrthoIndex, says although the cost of orthopedics-related supplies, such as implants and other devices, continues to rise, orthopedic-driven ASCs could combat this by learning more about the device industry, as well as effectively coding and managing the cost of orthopedic devices. Orthopedic-driven ASCs can also manage costs by consulting third-party orthopedic technology management specialists.
“A third-party firm can educate ASCs that don’t have the experience or knowledge to capture appropriate pricing,” Dr. Cherf says. “These firms can help propagate buyer power, develop and manage supply chain contracts, leverage provider alignment, maintain compliance and much more.”
2. Implement energy efficiency to decrease energy use. One of the ways practices can save the most money is by decreasing the amount of energy used in the facility, says Miguel Burbano de Lara, vice president of healthcare operations at The Neenan Company. While the practice needs to use a certain amount of power to perform daily functions, measures can be taken to decrease the amount of energy necessary. Slocum uses radio efficient lighting to perform imaging services. The building also monitors temperature control so it does not warm or cool quickly as the temperature changes outside. “It’s a big staff adjustment, knowing that the temperature inside isn’t going to change,” says Whitney Churchill, design manager with The Neenan Company.
In addition to watching the temperature, the building should also install light fixtures with sensors activating one, two or three bulbs depending on the amount of natural light coming through the window. By implementing energy-saving techniques, Slocum Orthopedics went from paying $1.69 per square foot for energy in the old 32,000-square-foot building to paying $1.06 per square foot on the new 80,000-square-foot building for electricity. This represents a 37 percent savings on energy Slocum experienced during the first year.
3. When building physician relationships, focus not only on recruiting, but also on retaining. Physicians with an existing relationship to a center are often the most likely to bring in additional case volume, Ross Alexander, MBA, the administrator of The Surgery Center of Fort Collins (Colo.) suggests. For that reason, fostering relationships and open communication with physician partners should be a top priority. If physicians say a new piece of equipment or a contract with a different payor would help them bring more business to your center, it is worth following up on their suggestions, he says.
Since most physicians already have relationships with a surgery center, focusing on existing physician partners increases the likelihood they will notify the center of new surgeons joining their practice who may be interested in bringing cases to your ASC, Mr. Alexander says.
4. Install coding technology. There is an infinite number of ways ASCs can adopt technology to cut costs and generate more revenue. Midlands Orthopaedics is pursuing implementation of new software as part of a facility-wide goal to improve scheduling and case costing. The software will allow Ann Margaret McCraw, CEO, and Belinda Rutledge, administrator, of Midlands Orthopaedics Surgery Center in Columbia, S.C., to better measure cost per CPT and per surgeon. Now only is this information valuable for insurance contracting, but it is useful to influence physician behavior.
“We will be able to evaluate the supply and staffing cost for each case per CPT code. Even if the same CPT code is performed by different surgeons, there can be significantly different cost outcomes. So there’s a benefit in showing and knowing what particular procedures are costing you on average,” she says. “And if you have a surgeon who is an outlier, the data may encourage him to consider different techniques or supplies without compromising quality.”
5. Examine rent and taxes. According to Laura Smith, administrator of the Tampa Bay Specialty Surgery Center, the center realized significant savings by looking more closely at the center’s lease agreement. The center shares its facility with a physician-owned group and was paying rent, electric, water, hot water and maintenance fees to the group. “I started looking into it and realized there were a lot of issues with the rent,” Mrs. Smith says. “We were paying an extra 400 square feet in rent, which [cost us] $22 per square feet.” She says the for three years, the center had paid taxes based on an “estimated tax bill,” which the center had accepted as accurate. “Instead of somebody looking at it, it was just being paid,” she says. “We were challenged at our national [management company] meeting to decrease the cost in all our centers without foregoing patient care, and I thought this would be the best place to start.”
Once Mrs. Smith looked more closely at the tax bill, she realized the center was overpaying almost $5,000. With the rent and the taxes adjusted, the center saved around $13,000 — all from simple vigilance and research.
