Four surgery center leaders discuss strategies to cut costs and increase profitability at pain management-driven surgery centers.
1. Invest in technology to increase efficiency and cut staff costs. Standiford Helm II, MD, of Pacific Coast Pain Management in Laguna Hills, Calif., says his practice cuts costs by concentrating on staff efficiencies. "We do still look to procedures as a major revenue source, but in an environment in which getting authorization for procedures is increasingly difficult and in which reimbursement is decreasing, we have had to look to increased efficiencies," he says. "Specifically, since our major overhead is staff, we look for efficiencies in the office as the means to stay profitable."
Dr. Helm says his practice has invested heavily in technology in order to improve efficiency. "[This is] not only electronic medical records, which I have been using for over a decade, but also technology to manage the other information flow, phones and document management," he says. In some cases, technology can replace an entire staff member by automating a process that requires significant staff member time.
2. Concentrate on orthopedics to bring more pain management cases. According to Brent Ashby, administrator of Audubon Surgery Center in Colorado Springs, Colo., concentrating on orthopedic physicians can bring additional revenue through pain management. Since his surgery center opened, Mr. Ashby has attracted three orthopedic physician groups to the center — the bulk of orthopedics in the community.
"[The presence of orthopedic physicians] has driven some of our pain management volume as well," he says. He says controlling much of the orthopedic outpatient case volume in the community is useful because the physician-investors talk up the surgery center to related sub-specialists and then benefit from their colleagues bringing more cases to the center.
3. Use a repair/maintenance vendor that can provide multiple services. Charles Friedman, MD, an anesthesiologist at West Park Surgery Center in Pinellas County, Fla., says his surgery center is regularly checked for maintenance by a biomedical technician. In order to comply with AAAHC standards of equipment maintenance, Dr. Friedman says the maintenance and cleaning services are outsourced to one vendor who is able to offer those services for a large number of the equipment.
"When we look at our maintenance contracts, we try to use a vendor that provides multiple services, as opposed to one vendor that cleans monitors, one vendor that repairs C-arms and one vendor that repairs electronic beds," he says. "We use a service that does a majority of our equipment, repairs our heating and AC, checks sterilization and so on. Also, repair/maintenance vendors are very responsive and can loan you a piece of equipment before a new pieces comes in."
West Park also uses laundry services instead of tasking staff members to clean linens. Dr. Friedman says the surgery center saw a savings of $0.40-$0.50 per piece of linen by hiring laundry services. "It may seem like a small amount of savings, but every small saving eventually adds up."
4. Opt for spinal cord implants rather than pain pumps. Spinal cord implants are increasingly attractive to patients and physicians because of the problems that can arise with pain pumps, says Robert Saenz, CEO of Tulsa Pain Consultants. "The problem with pumps is that while they can be very effective in helping a patient control medication flow, refills are necessary and there are complications that go along with the pumps," he says. "These include the possibility of infection and blockage, which could have serious consequences."
Refills for pain pumps are also not reimbursed well by federal or commercial insurers, he says. In many cases, there is no incentive for the physician to perform a refill because the cost of the medication outweighs the reimbursement. Spinal cord implants do not need to be refilled and receive better reimbursement than pumps, he says.
5. Modify hours of availability based on case volume. When there are not enough procedures scheduled in one day's work, Dr. Friedman suggests closing the center to save on staffing costs, which are arguably the biggest expense at an ASC. West Park aims to schedule at least 16 procedures for one day at West Park.
"We look at our schedule on a daily basis, and we schedule 25 cases for a full day and 16 cases for a half day," he says. "We start by booking a full morning, and once a full morning is booked, we book an afternoon. If the afternoon doesn't book up, we usually shift the patients to another day, turn off the lights and equipment, and go home early."
Related Articles on Profitability:
5 Spine Surgeons on Responding to Coverage Denials
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1. Invest in technology to increase efficiency and cut staff costs. Standiford Helm II, MD, of Pacific Coast Pain Management in Laguna Hills, Calif., says his practice cuts costs by concentrating on staff efficiencies. "We do still look to procedures as a major revenue source, but in an environment in which getting authorization for procedures is increasingly difficult and in which reimbursement is decreasing, we have had to look to increased efficiencies," he says. "Specifically, since our major overhead is staff, we look for efficiencies in the office as the means to stay profitable."
Dr. Helm says his practice has invested heavily in technology in order to improve efficiency. "[This is] not only electronic medical records, which I have been using for over a decade, but also technology to manage the other information flow, phones and document management," he says. In some cases, technology can replace an entire staff member by automating a process that requires significant staff member time.
2. Concentrate on orthopedics to bring more pain management cases. According to Brent Ashby, administrator of Audubon Surgery Center in Colorado Springs, Colo., concentrating on orthopedic physicians can bring additional revenue through pain management. Since his surgery center opened, Mr. Ashby has attracted three orthopedic physician groups to the center — the bulk of orthopedics in the community.
"[The presence of orthopedic physicians] has driven some of our pain management volume as well," he says. He says controlling much of the orthopedic outpatient case volume in the community is useful because the physician-investors talk up the surgery center to related sub-specialists and then benefit from their colleagues bringing more cases to the center.
3. Use a repair/maintenance vendor that can provide multiple services. Charles Friedman, MD, an anesthesiologist at West Park Surgery Center in Pinellas County, Fla., says his surgery center is regularly checked for maintenance by a biomedical technician. In order to comply with AAAHC standards of equipment maintenance, Dr. Friedman says the maintenance and cleaning services are outsourced to one vendor who is able to offer those services for a large number of the equipment.
"When we look at our maintenance contracts, we try to use a vendor that provides multiple services, as opposed to one vendor that cleans monitors, one vendor that repairs C-arms and one vendor that repairs electronic beds," he says. "We use a service that does a majority of our equipment, repairs our heating and AC, checks sterilization and so on. Also, repair/maintenance vendors are very responsive and can loan you a piece of equipment before a new pieces comes in."
West Park also uses laundry services instead of tasking staff members to clean linens. Dr. Friedman says the surgery center saw a savings of $0.40-$0.50 per piece of linen by hiring laundry services. "It may seem like a small amount of savings, but every small saving eventually adds up."
4. Opt for spinal cord implants rather than pain pumps. Spinal cord implants are increasingly attractive to patients and physicians because of the problems that can arise with pain pumps, says Robert Saenz, CEO of Tulsa Pain Consultants. "The problem with pumps is that while they can be very effective in helping a patient control medication flow, refills are necessary and there are complications that go along with the pumps," he says. "These include the possibility of infection and blockage, which could have serious consequences."
Refills for pain pumps are also not reimbursed well by federal or commercial insurers, he says. In many cases, there is no incentive for the physician to perform a refill because the cost of the medication outweighs the reimbursement. Spinal cord implants do not need to be refilled and receive better reimbursement than pumps, he says.
5. Modify hours of availability based on case volume. When there are not enough procedures scheduled in one day's work, Dr. Friedman suggests closing the center to save on staffing costs, which are arguably the biggest expense at an ASC. West Park aims to schedule at least 16 procedures for one day at West Park.
"We look at our schedule on a daily basis, and we schedule 25 cases for a full day and 16 cases for a half day," he says. "We start by booking a full morning, and once a full morning is booked, we book an afternoon. If the afternoon doesn't book up, we usually shift the patients to another day, turn off the lights and equipment, and go home early."
Related Articles on Profitability:
5 Spine Surgeons on Responding to Coverage Denials
5 Strategies for Successful Orthopedic ASCs From ASC Administrator Karen Cannizzaro