6 Key Practices for Growing Volume and Profits: Bayou Region Surgical Center

Bayou Region Surgical Center, in Thibodaux, La., is a multispecialty ASC that operates as a 50-50 partnership between physician investors and a subsidiary of the local community hospital, Thibodaux Regional Medical Center, and is managed by ASD Management. Here's how it increased patient revenue by 8 percent and net income by 20 percent last year, according to Tona Savoie, the ASC's administrative director.

1. Increase cases, procedures and staff. Bayou Region opened in mid-2007. In its first year, it performed 1,153 cases. In 2008, it performed 3,356, and in 2009, it performed 3,834. This growth was measured and deliberate, Ms. Savoie says. The center's biggest service lines are orthopedics and ENT.

"Last year we bought more equipment for orthopedics so we could do some of these bigger cases," Ms. Savoie says. "We've just been keeping a close eye on our costs and reimbursements."

To be able to perform more cases, Bayou Region brought on more physicians. In 2008, it added four, and in 2009, it added six more. Bringing in more physician-investors necessitated adding a whole new OR crew, including a nurse, an OR technician and a person to handle decontamination. This enabled the center to staff three ORs per day for three days a week, up from two ORs staffed two days a week the previous year, which helped manage the growth in volume. "You can't do cases when the doctors want to if you don't have the staff," Ms. Savoie says. "It's all about making everybody happy."

2. Create a positive environment that prioritizes education and communication. With the center relatively new, physicians were coming from very different backgrounds and viewpoints. "We sent out surveys to our physicians and our staff members and reviewed everything," says Ms. Savoie. On the surveys, physicians and staff were given an opportunity to rate and comment on atmosphere, communication and teamwork within the center. Educating staff and physicians about regulatory requirements and reimbursement challenges also went a long way toward clearing up disagreements about how to run the center, she adds.

3. Educate physicians on expenses and revenue generated. Physicians are given a quarterly report on costs and reimbursement. The center's physicians appreciate this educational tool, which includes both a summary and a case-by-case breakdown, because it allows them to track the cost of supplies for a given case, the reimbursement for that case and their performance compared to other physicians. "It makes them more aware, and they really like that a lot," Ms. Savoie says.

4. Continually evaluate managed care contracts. Bayou Region did not add any new managed care contracts last year, and it is currently renegotiating three that were initially signed in 2007 and 2008. Giving careful consideration to each contract is essential for the success of a center, Ms. Savoie says. "There are a few we still have not signed yet because we're just not going to sign bad contracts."

Keeping track of reimbursement and cost data helps a center stay on top of potentially detrimental contracts, Ms. Savoie explains. "I think you have to be choosey, I think you have to know your market, you have to know your physicians' markets and you pick your big players."

5. Pay special attention to the purchasing manager and other business office functions. Hiring a skilled purchasing manager will help keep costs under control, Ms. Savoie says. Bayou Region purchases through a GPO and now has an in-house purchasing agent who is devoted to placing orders, staying on top of new vendors entering the market, meeting with physicians to discuss their needs and keeping track of how often certain procedures are performed. "One of the biggest problems with revenue when a center doesn't do well is because they purchase lots of supplies that their physicians don't use," Ms. Savoie says. Other key staff positions include a collector to keep on top of billing issues and a business office manager. Diligent collection efforts by the business office staff have helped Bayou Region keep its accounts receivables in the more-than-90-days category below industry standards, Ms. Savoie says.

6. Stay on top of regulatory changes. ASD Management helps keep the center abreast of changes in regulatory policy from CMS and the state on a monthly, and sometimes weekly, basis, Ms. Savoie says. "Keeping constantly updated with CMS and federal regulations is a must," she says. Otherwise, one audit could bring operations to a halt while a center remedies compliance issues it should have been on top of in the first place. "That will definitely affect your bottom line, as well as the happiness of your surgeons," she says.

Thank you to ASD Management for arranging this story.