1. Start with a good pro forma. Creating a high quality patient care environment that is both efficient and profitable begins before construction with the pro forma, advises Jim Reichheld, MD, board-certified gastroenterologist and director of the Northeast Endoscopy Center in Lowell, Mass.
“The pro forma is more than a budget, it’s a plan,” Dr. Reichheld says. “Included should be how much space, how to staff the ASC and fill it with equipment and patients. To me, the pro forma is a living document. Every center has one at some point, but I’ll bet fewer than half ever redo it. We redo ours at least twice each year. The pro forma can tell you where your money is going.”
2. Pick the right size space. “There are only two ways to make square footage work: either get it right in beginning, or sublet to make it work later,” Dr. Reichheld says. “There are many restrictions on subletting space for other uses, so that can be difficult. Not building a Taj Mahal is critical because your building is a fixed, recurring expense and you can’t change that. Also, with the high cost of development, it makes sense to be sage about who you choose to partner with. We chose not to give up ownership. The profit in the ASC is found in the last 25-30 percent of revenue and we didn’t want to give that away. We wanted to leave plenty of room to be cost effective and provide the very highest quality care.”
3. Invest in a good staff. An ASC’s biggest cost is staff, but paradoxically, it’s also the biggest asset.
“You staff will drive quality of medical care and patient satisfaction and the happiness of the doctors working there,” Dr. Reichheld says. “Nothing beats a good staff. Skillfully placing your staff flows from good design and can be done upfront — how you staff the rooms with how many people. I believe in investing in our staff. Even if your staff costs more, you will receive far more than that in return from really good personnel than from poor or marginal choices. Staff well with the best people, as many as you need and no more. You don’t want to overstaff, either.”
He says with cuts in Medicare reimbursement, profit margins can be tighter.
“Your schedule for each room should be full,” he says. “Your fixed costs are already there whether patients are there or not. So it’s really important to keep the place full. We discovered that doing just two more procedures a day would significantly increase revenue.”
Catherine Sayers, director of clinical operations for Pinnacle III, a national ASC development and management company, agrees that managing staff is vital to an ASC’s efficiency and profitability.
“Staff should be sent home if the center is not busy,” Ms. Sayers says. “If you take over a center without that mentality, it can be a problem. You want to be busy enough not to send people home and there is a fine line.”
She recalls one center that employs a rotating list of who was cancelled or sent home for low volume.
“You have to explain when hiring staff that that is a possibility. Hopefully, nobody is sent home more than once a month,” she says, noting the importance of good scheduling. “That center allows employees to trade and encourages flexibility.”
Consultant Ken Camerota, a Boston-based former ASC administrator who has provided development and management services to ASCs for more than 20 years, says the centers he’s worked with pay staff by the day.
“And whatever it takes to accomplish that (day’s) schedule will happen,” Mr. Camerota says. “What that means is that physicians move at a pace they’re comfortable with. People aren’t punching or watching a clock, but completing the schedule. We pay on a 10-hour day schedule. If you work 10 hours, fine, but if you can accomplish the schedule in eight hours, you can go home early and still be paid for 10 hours. Nurses can’t control the schedule, but they can control turnaround, how quickly a patient is cared for and sent home and they are incentivized the same way our doctors are.”
4. Cross train your staff. Mr. Camerota says cross training has become a mantra.
“You hear it often, but aligning staff with the physicians, in terms of pace and worth ethic, is vital,” he says. “Cross training on equipment is key. If someone is not there, someone else needs to know how to operate the equipment and process the patients. Everyone needs to know what everyone else does.”
Pinnacle III’s Ms. Sayers concurs.
“Medicare cuts have reduced our profit margins and forced us to employ more economies of scale and become even more efficient,” she says. “We try to cross train everyone. Within GI centers there are many nurses who were trained to be flexible and understand equipment and patient needs. We train them how to clean scopes, work the front desk, verify benefits and assist. We do as much cross training as we can in our facilities. It’s exceptionally valuable and a key factor in keeping costs down and being as efficient as possible.”
Debi Chinderle, a nurse and the endo charge manager for the Surgery Center of Joliet, Ill., says she and another endo nurse share duties between her center’s OR and endoscopy rooms with two OR nurses cross trained to endoscopy work.
“If our endo schedule is low at our ASC, we go into the ORs and if the OR schedule is low, they come here,” Ms. Chinderle says. “We’re on the low end of being right-staffed, but we have not had to use any agency nurses in quite a while. We do staff a few nurses who like working part time or who are retired to fill in when we need them.”
5. Consider leasing equipment. New scopes are expensive, $25,000-$40,000 if purchased. Mr. Camerota recommends leasing them from manufacturers who install the equipment and charge a per procedure use fee.
“We provide a procedure count to the manufacturer and they bill us accordingly,” he says. “There’s no purchasing capital upfront and the lease agreement includes a service agreement. You can also upgrade a little easier to newer versions.”
6. Develop good relations with primary care doctors and other referring physicians. “These are the doctors who are screening their patients and referring them to gastroenterologists,” Ms. Sayers says. “Building a strong relationship with them is key to getting patients into the door.”
She says Pinnacle III centers build relations between the front desks of those doctors and Pinnacle III ASC front desk staff, making it easy to schedule patients, reducing the number of forms to complete and smoothing the process.
7. Get paid. Ms. Sayers advises ASCs to develop processes for getting paid as quickly as possible to reduce accounts receivable days and maintain adequate cash flow.
“Do a good job of getting accurate financial information in advance and make sure patients know their responsibility early on and pay on the day of the procedure,” she says. “We mail out forms detailing the patient’s insurance benefit information and financial responsibilities and confirm that by phone in advance and make sure they without any surprises.”
Also critical is billing promptly for procedures. She says Pinnacle III’s billing office typically bills on the day of the procedure or the morning after.
“GI procedures are pretty easy to code,” she says. The physician inputs the information on the software system that creates the procedure report and assigns the correct CPT code. This is sent to Pinnacle III’s billing office, which verifies that the physician has coded accurately before submitting the claim.
“We try to get a pretty fast turnaround on reimbursement,” she says.
8. Manage supply costs. Ms. Sayers says securing agreement from physicians in standardizing supplies they use is important to controlling costs.
“We can’t bill separately for many high dollar items (like some dilating balloons) and have to absorb their costs,” she says. “In some procedures you can’t make any money. So it’s key to rationalize your purchases. A good materials manager negotiates fair pricing with vendors, keeps an eye on inventory and talks with doctors to keep a handle on preferences.”
Joliet ASC nurse and manager Ms. Chinderle says her center has computerized its entire supply list to make ordering faster and easier.
“All our materials are on a checklist on the computer, so we just have to check and order. It helps us to keep better inventory,” she says. “We know immediately what supplies we’ve used and not used and are not paying extra surcharges on emergency deliveries or wasting money in overstocking.”
9. Don’t neglect pre-op. Ms. Chinderle says many potential problems faced in GI can be avoided by addressing them early in the pre-op process.
“It’s important in that screening process to identify patients with defibrillators or pacemakers because they could affect the procedure,” she says. “You need to know all of this ahead of time. We talk to the patients, bring them to the endo suites and apprise the staff of what to look for. It makes the work flow so much easier. If you don’t know, you have to call later and that can result in delays and cancellations.”
Staff prepares a checklist of drugs, previous surgeries, allergies and takes an in-depth patient history, she says, inquiring about current medications.
“If a patient is dependent, for example, on narcotics for back pain or something else, it helps us to know that because they may need more medicine.” she says. “The pre-op nurse asks each patient who is taking them home and other questions. The physicians go through the charts quickly, so it’s good to have something to background them with.”
Ms. Chinderle says it’s really helpful to have a dedicated endo team that knows the routines of the physicians and staff.
“They’re familiar with the equipment, some of which is pretty state of the art scopes and it makes everything go smoother,” she says. “You can train people, but it’s easier to start with a well-trained and dedicated staff.”
10. Coordinate care. Roseanne Silvestri, executive director of the Holy Redeemer Ambulatory Surgery Center in Huntington Valley, Pa., says that properly coordinating care is the secret to success in the GI outpatient world.
“By that I mean coordination with the physician’s office, as well as coordination with the patient,” Ms. Silvestri says. “With the continual decline in reimbursement from Medicare, you have to be super efficient and expedient, but also ‘high touch’ from the patient’s perspective. The ASC staff needs to know the physicians and their idiosyncrasies, the equipment and the different procedures. The process needs to be well-planned and methodical, leaving no room for error while creating efficiencies.”
She says the anesthesia component is also crucial.
“Anesthesia staff must provide appropriate coverage during the procedure, but not overdo it, since the patient needs to recover quickly so discharge can occur shortly (under an hour on average) after the procedure is completed.”
She says that the physician’s office must provide very clear instructions to the patient regarding the preps for the procedure. She also recommends that the ASC have copies of the various preps used by that ASC so they can review them with patients during the pre-op phone call and interaction. She says that helps to avoid rescheduling procedures because patients misunderstood or failed to properly take their preps, the products used before the procedures to “clean out” the patients.
Contact Mark Taylor at mark@beckersasc.com.