Christy Franck, administrator of Montgomery Surgery Center, a Surgical Care Affiliates center in Rockville, Md., cites seven exceptional ideas for cutting costs in an ambulatory surgery center.
1. Make cutbacks across all staff. When volume starts falling, many ASCs cut back hours of their clinical staff but not of other staff. "Cutting every staff member's hours is not only fair, but it helps everyone understand the need for volume and efficiency in the ASC," Ms. Franck says.
When volume fell during the recession, she routinely cut back staff hours across the board, including in the business office. "If the center has fewer cases to verify, business office staff have less to do and can be sent home earlier," she says. Cutting staff at the front desk is more challenging, because someone is always needed there, but it can be done by rotating other staff through the front desk.
2. Hire more part-time staff. "Now that our volume is up from last year, we are doing some new hiring," Ms. Franck says. But rather than hire a lot of full-time staff, the center has increased its pool staff, the PRNs who work 24 hours a week. And when she hires full-time staff, Ms. Franck now makes it clear they may be working less than a full 40-hour week at times. "We're trying to be flexible from the start," she says. "It could happen that we have lower volumes again."
3. Reopen service contracts. Many ASCs don't bother to reexamine contracts for such services as medical gasses, HVAC, cleaning service and waste removal, but there are plenty of opportunities here. "Companies are calling us every day, asking for our business here," Ms. Franck says. In the past few years, she has switched vendors for HVAC, transcriptions and cleaning services, and the center is getting ready to change its linen vendor. Changing transcription services alone netted a savings of $300-$400 a month, she said.
However, be sure the new vendor can meet the center's standards. For example, there is a great deal of variation in the quality and experience of housekeeping vendors. "You need a company that understands the ASC environment, who knows how to clean a medical facility," Ms. Franck says. "There are a lot of cleaning companies that have no clue on how to clean an OR. I'm very clear on what our expectations are."
4. Make vendors compete with each other. Entertaining a quote from a another vendor or even going so far as cancelling the contract with the current one can shake things up. "You can call the current vendor and say, 'We're getting close on a contract with another vendor and I wanted to let you know,' " Ms. Franck says. The current vendor usually comes back with a counter-offer of some kind, and sometimes it is a valuable improvement. "Vendors want to keep your business," she says. "You want a vendor who will go above and beyond its usual obligations to help you out."
For example, the center's waste removal company had been billing a different amount every month and didn't explain the extra charges. Ms. Franck got a quote from a competing company that was a couple of hundred dollars a month lower than the current vendor, without any extra charges tacked on. When she told the existing vendor of her intentions to switch, she says, "They came back and said to us, 'We really want your business. What can we do for you?' I told them, 'I'm looking for someone who is not going to charge me an additional fee, but will help me out.' They were very apologetic and they ended up giving me a comparable quote." Ms. Franck decided to stay with the current vendor.
5. Air your unhappiness with a vendor. If the surgery center has had problems with its vendors, make sure to let them know. "As an ASC, we're very focused on customer service for our physicians and patients, and we expect our vendors be so as well," Ms. Franck says. "I give them a fair chance, but if they are still not coming through on customer service, we drop them."
6. Keep trying out supplies. Ms. Franck says physicians at her center have trialed a lot of different companies. "There are a lot of vendors out there who can save us money," she says. Before each trial, the company sends in a rep to discuss the product and see if the physicians would like to try it. "There are hundreds of different products you can do this with and they are significant products, like intraocular lenses for cataract surgeons or orthopedic anchors," she says.
7. Get an energy audit. Ms. Franck recently signed the ASC up for an energy audit and was given a variety of possible cost-cutting steps, such as turning off the lights whenever everyone leaves an area. But the center's biggest energy savings came from reducing use of the heating and air conditioning system. Many HVAC systems have automatic timers on them that allow them to be turned down on evenings and weekends. "We didn't know we had these switches until we went through the audit," Ms. Franck says. "We saved thousands of dollars in energy expenses on this one step alone." She has still not carried out some steps recommended in the audit, such as planting trees outside the building to block the sun.
Learn more about Montgomery Surgery Center.
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