Thomas R. Yerden, CEO of TRY Health Care Solutions in North Fork, Idaho, outlines six steps an ASC can take to become more profitable.
1. Don't get complacent. As this recession is showing, it's easy to be successful when times are good but it's harder the rest of the time, when you have to actually work at it. A high volume of cases can hide the fact that ASC leadership has not done enough to help the center stay profitable in the long run. Avoid the "Red Bull effect," in which the ASC makes a couple of minor improvements, everyone celebrates and leadership stops thinking about more significant ways to improve. "The savings from finding a less expensive vendor for a supply is insignificant compared to the added income from recruiting a new surgeon," Mr. Yerden says.
2. Make time for strategic planning. For many ASCs, the yearly budget process is about as close as they get to planning for the future. Owners need to go to a retreat and spend significant time consciously planning for the future. "Get away from your center, roll up your sleeves and spend some time strategizing," Mr. Yerden advises. "Get everyone in the room and talk about it." Consider inviting key non-owner physicians and even some managers. "It helps to be more inclusive," he says.
3. Use data to evaluate operations. Mine your data, drilling down for specific ASC operations, and compare your numbers to benchmarks, which can often be obtained for free or at low cost. "Data tells you where you can make money, what to pay the staff, what supplies you have and what you quality levels are," Mr. Yerden says. Use this information to hold management accountable. Set goals for managers on such factors as physician recruitment, A/R days and reducing debt.
4. Focus on scheduling. "The principle commodity that an ASC sells is OR minutes," Mr. Yerden says. To make your commodity more valuable, the ASC should maintain an efficient, up-to-date schedule, but this is often overlooked. "Most ASCs do not schedule the day very well," Mr. Yerden says. Staff should be constantly looking over the schedule, making sure not to underblock or overblock. Leave some available times open for last-minute additions. The scheduler at each surgeon's office has a lot to do with making the ASC schedule on time. Form a relationship with these schedulers and pay them a visit. Ask to take them on a tour of your ASC. Not only will this enhance your relationship but it will also give the schedulers insights into your operations.
5. Refresh ownership constantly. Physician-owners should not have "a country-club mentality," Mr. Yerden says. "I see it all the time," he says. "The board doesn't want to bring anyone else in." If a young physician is interested, they will raise the share price, even though a new physician can least afford it. Instead, Mr. Yerden advises ASCs to actively seek out young physicians and create an exit strategy for aging partners. Recruitment requires administrators to be out pounding the pavement, but too often they are just sitting in their offices. Administrators should be offered a bonus for recruitment. The ASC's aim should be to add physicians before they are needed. When they are needed, it will be too late to start looking.
6. Find physicians who can fit into your culture. Look for physicians who can contribute positively to the center. Avoid disruptive physicians because it will be very difficult to unwind them from your ASC. While its worthwhile to recruit another partner from one of your physician-owner's practices, finding a physician from another group is even better. This outside physician represents untapped volume and new recruitment opportunities inside his group or hospital. If you are partnering with a hospital, a physician from another hospital represents totally new volume. "Your hospital partner would love this," he says.
Learn more about TRY Health Care Solutions.
Read more best practices to improve profitability:
- Critical Metrics for Successful ASCs
- 5 Ways ASCs Can Keep in the Black
- 10 ASC Best Practices From 10 ASC Physicians