5/28/2013. Objectives. CASCA 2013 ASC Efficiencies An Advanced Perspective. I. Evaluating the Operations and Efficiencies of an ASC.

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1 CASCA 2013 ASC Efficiencies An Advanced Perspective Dawn Q. McLane-Onofrio RN, MSA, CASC, CNOR Health Inventures VP Consulting, Development and Integration Objectives I. Evaluate operations and efficiencies of an ASC II. Determine when the business has reached a critical mass is it time to expand the business & conversely the when to shrink the business III. Advanced look at management efficiencies HR tools Position Control labor management benchmarking process management 1 The Surgery and Physician Services Experts 2 I. Evaluating the Operations and Efficiencies of an ASC Rounding The Magic of Rounding: Quint Studer Brings a Leadership Technique from Medicine into the World of Business Rounding take a walk for an hour a day Make personal connections with staff and physicians 3 gather information in a structured way reinforce positive and profitable behaviors identify problems ongoing assessment evidence based leadership study: demonstrated that rounding works to accomplish the 5 things employees need from their leaders 4 1

2 Bonding with our Employees 5 Things Employees Need from Leaders 1. A manager who cares about and values them rounding builds relationships retention 2. Systems that work and tools and equipment to do their jobs ask if they have everything they need a time for evaluation a time to identify opportunities 3. Opportunities for professional development observe, intervene identify and provide training and/or mentoring praise high performers Things Employees Need from Leaders 4. Recognized and rewarded for doing a good job observe, ask and share builds greater productivity 5. Work with high not low performers requires you to manage the process low performers drive high performers out the door Management Foundation Tell employees what you expect of them Evaluate and tell them frequently how they are doing in regard to your expectations Reward them accordingly 7 8 2

3 Rounding Skills Part of the culture of the organization Requires training and self discipline Communication getting started tell employees what you will be doing scouting report list of known problems make a personal connection genuine individual information show that you are addressing specific issues that have been identified Rounding Skills Ask 5 questions: 1) what is working well? 2) is there anyone I should recognize? 3) do you have the tools you need? 4) is there anything we could do better? 5) what else would you like me to know? 9 10 Rounding Skills The Business of ASCs Sincere effort to address problems as they are raised provide assurance to employees during the process demonstrate improvement where possible Record issues in a rounding book Recognize and reward those identified by peers as high performers Program: Warm Fuzzies Repeat daily when possible make it part of your routine part of the culture or the leadership team 11 Approx 70% of surgery is outpatient 70% of outpatient surgery is ASA I and II ASA III is increasing due to technology Where surgeries are performed: Hospital 38%...50% could be ASC cases ASC 60% Physician office 2% McGuire Woods: >1/3 of ASCs break even or lose $ 12 3

4 The World of ASCs 5876 freestanding ASCs at end of % owned or managed by a corporate chain / partner Medicare Certified ASCs: % average growth per year ============================================= % growth % growth % growth ============================================= Avg of 319 new ASC 58 closed 13 Critical isions What separates a successful center from the 1/3 who are breaking even or losing $? Architectural Design and Facilities Management Leadership and Governance (culture) Anesthesia Services Patient Scheduling & EMR Staffing Equipment & Technology Supply Standardization & Inventory Control Volume and Case Costing Performance Measurement (clinical and financial) Payor Contracting Reimbursement Communication through the Organization 14 Architectural Design & Facilities Management If you build it, they will come!!! Cardinal sin overbuilding Realistic expectation by partners re: number of cases per OR ( case mix dependent: d 1000/ OR / yr avg) Plan patient & visitor comfort, materials & support svcs productivity, clinical functionality = attractive, warm, comfortable and functional without extras ASC ket Trends ~20 million surgeries are performed each year in the more than 5,000 surgery centers across the United States Low to no growth in the total number of licensed ASCs in the U.S. Nearly every ASC has significant excess capacity the industry is overbuilt More than 70% of eligible physicians are already invested in an ASC (up from 30% in 1990) More employment of physicians and expected 15% surgeon attrition in the next five years exacerbates the biggest problem facing ASCs lack of recruitable physicians Consolidation is accelerating The Surgical and Physician Services Experts 4

5 ASC ket Trends Freestanding ASC Growth Increasingly challenged reimbursement environment Medicare reimbursements for ASCs have declined from 87% of HOPD rates in 2003 to 56% in 2013 Commercial payer rates being driven towards Medicare levels Costs aren t likely to trend down with reimbursement, squeezing margins and profitability Only the best managed centers will survive Increasing trend to partner with hospitals/health systems for reimbursement and physician recruiting leverage /28/2013 reasing ASC Eligible Surgeons Drivers: economy market saturation geographic areas physician supply reimbursement cuts mature businesses succession planning ASC Eligible Surgeons per ASC in the US Source: The Advisory Board Company E The Surgical and Physician Services Experts 5

6 Leadership and Governance Culture Culture eats Strategy for lunch! transparency shared financial information accountability responsibility meet regulatory requirements: QAPI & Infection Control involved (knowledgeable) in the management of the ASC 21 Anesthesia Services Anesthesia providers can make or break the success of an ASC must be willing to be a fully productive member of the team willing to start IV, push a stretcher, help turn over a room Anesthesiologists and/or CRNAs Board approved panel independent providers, group(s), national provider Dedicated to ambulatory anesthesia practice patients awake in the OR or upon admission to PACU regional blocks Participate in medical staff governance- MEC / COC 22 Patient Scheduling Creative scheduling Open scheduling Block Scheduling Modified Block Scheduling Eliminate where possible, the scheduling gaps Utilization goal 75-85% Manage the blocks quarterly Medical Director actively involved in leading the block management Block release: 1 week, 3 days, 1 day Cases start on time (in room within 5 minutes of scheduled time) Turnover times avg 9-12 minutes 23 Medical Staff Rules & Regs Scheduling policies define patients appropriate to the ASC Medical screening by RN staff anesthesia staff Low incidence of same day cancellations Surgeons available in the ASC 15 minutes prior to scheduled surgery time Surgeon assumes leadership role in marking the site an time out processes participation in quality improvement and credentialing committees willing to work toward efficiencies: standardization of instrumentation and supplies, implants supports and participates in compliance and regulatory requirements : infection control practices and surveillance 24 6

7 Staffing The right person in the right seat on the bus!! Management team members must be on the same page. Create an organizational culture..goals Effective leadership is measured by efficiencies and outcomes; management with integrity Work ethic is imperative in these times Employee expenses represent 37% of total expenses (VMG) 25 Staffing Staffing Philosophy Position Control (see next slides) FT.. PT.. prn.. Agency. Travelers maximize continuity with the most flexibility for your setting stagger shifts to avoid OT ================================================ FT & PT most continuity, competency, team spirit, participate in meeting center s goals with less time spent managing the HR processes mature center with reliable case volume so you can flex staff PT & prn more flexibility and offers potential to reduce benefits costs agency and travelers increase costs on a per FTE basis but offers maximum flexibility new ASC just building volumes difficult recruitment area 26 Non-productive time vs Low Census Meet regulatory requirements Licensure requirements Medicare certification requirements Infection Control QAPI Accreditation requirements Cleaning, stocking, checking outdates, resterilization Special Projects 27 Staffing Efficiencies Position Control identify positions needed for each area including budget Job Descriptions Identify cross-training opportunities Expectations clear from date of hire and reinforced at appraisal time Share financials with staff and reward excellence Flow Charts to identify best practices and efficiencies in process flow Preference cards up to date Instrument inventory list that minimize the number of instruments in a tray easier to turnover 28 7

8 Staffing Position Control for ANY ASC 2011 FTE Budget Position Rank Name Min Salary Mid Salary Max Salary Salary Expense ADMINISTRTION Administrator OPEN ,000 0 Director of Nursing OPEN ,000 90,000 99, ,000 0 Business Office Mgr OPEN ,000 54,080 60,173 79,997 0 Medical Director ,000 0 $ ,000 #DIV/0! OR Min Hourly Mid Hourly Max Hourly RN OPEN ,000 0 RN Phase II Hire RN Phase II Hire RN Phase II Hire RN OPEN , RN OPEN , RN Phase II Hire RN Phase II Hire RN OPEN prn 16, ,400 #DIV/0! 0 CST / ORT ORT OPEN , ORT Phase II Hire ORT Phase II Hire ORT Phase II Hire ORT Phase II Hire ORT OPEN prn 10, ,000 #DIV/0! 0 Peri op Staff Peri op Coordinator OPEN , RN Pre op OPEN , RN Pre op Phase II Hire RN Pre op Phase II Hire RN PACU OPEN , RN PACU Phase II Hire RN Phase II Recovery OPEN , RN Phase II Recovery Phase II Hire RN Peri op Float Phase II Hire RN Peri op Float Phase II Hire RN Peri op prn OPEN prn 16, RN Peri op prn OPEN prn 16, ,800 #DIV/0! 0 Staffing Position Rank Name FTE Budget Min Salary Mid Salary Max Salary Salary Expense Clinical Support Materials Coordinator OPEN , Instrument Tech OPEN , Instrument Tech Phase II Hire ,000 #DIV/0! 0 Business Office Scheduler OPEN , Patient Accounts Rep Biller OPEN , Patient Accounts Rep Collections Phase II Hire Patient Accounts Rep MR Phase II Hire Registration Receptionist Phase II Hire ,000 #DIV/0! 0 TOTALS ,026, Process Flowchart - Scheduling ANY SURGERY CENTER Process Flowchart - Registration ANY SURGERY CENTER -- REGISTRATION/ADMITTING PROCESS SCHEDULING PROCESS FLOWSHEET Receive Call from Surgeon Office Scheduler Update Patient Demographics Data Entry Admitting Clerk Receive Fax from Surgeon Office Scheduler Verify Information on Fax and Schedule into Block or Open Time/ Conflict Checking Scheduler Notify Materials Manager if Resource Needed (equipment or implant) Scheduler/Materials Manager Patient Pre-authorization Validated A/R Representative/Admitting Clerk Patient Presents Day of Surgery Patient Registered Admitting Clerk Complete Patient Demographics in Scheduling Program Scheduler Registration/Financial Responsibility Signed Admitting Clerk Pre-op Worksheet to Registration and AR Scheduler Insurance Verification/ Patient Call if Necessary regarding Co-Pay AR Specialist Financial Contract Signed (if applicable) A/R Representative/Admitting Clerk Pre-op Phone Call for Patient History and Demographic Record Completed Pre-op RN /Admitting Clerk Co-pay/Deductible Collected/Receipt Given Admitting Clerk Patient Chart Completed Pre-op RN 31 Cash Drawer Contents Balanced and Given to A/P Clerk or Admin. Assistant for Deposit Admitting Clerk 32 8

9 Copy of P.O. & Packing Slip to A/P Materials Coordinator Payments Posted to Patient Accounts from Photocopy of Checks & RA/Adjustments Made Accounts Receivable Representative Weekly Past Due Report 45 days Collections Procedures Initiated with Approval of Manager Accounts Receivable Representative Paid or Adjusted Accounts Receivable Patient Account Closed Accounts Receivable Representative 5/28/2013 Process Flowchart - AP ANY SURGERYCENTER-- ACCOUNTS PAYABLE PROCEDURES Process Flowchart - AR- ANY SURGERY CENTER -- ACCOUNTS/RECEIVABLE PROCEDURES Surgery Scheduled Clinical/Billing Chart Created Scheduler Pre-certified Insurance or Cash Arrangement A/R Representative Incoming Mail Sort & Distribute Administrative Assistant Pre-op Phone Call Clinical Chart Updated/Financial Arrangements Pre-op Nursing/Anesthesia Financial Arrangements A/R Representative Match P.O. to Receiver Materials Assistant Match Invoice to P.O. Verify Price Approve and Schedule for Payment A/P Clerk Data Entry to IS (Quick Books) A/P Clerk 2nd Approval for Administrative Purchases Executive Director Medical Director Board Chairman Patient Arrives/Registers/Financial Forms Signed Collect Co-Pays Registration Clerk Surgery Completed Clinical Chart Completed Clinical Personnel Clinical Staff Data Entry Clinical Personnel Clinical Chart & Billing Charts arated Registration Clerk Billing Data Entry Patient Accounts Representative OP Report Dictated Surgeon Transcription to Chart and Coded A/R Representative Billing Generated/Transmitted to Responsible Party (24 o ) after Coding and Invoice Mailed (48 o ) Patient Accounts Representative Computer Checks Generated A/P Clerk Incoming Mail/Deposits Listed Administrative Assistant Sign Checks Executive Director Medical Director Board Chairman Payments Received, Photocopied and Deposited Accounts Payable Clerk or Administrative Assistant Deposit Receipt to AP/Checkbook Accounts Payable Clerk Mail Checks and File Paid Bills A/P Clerk Process Flowsheet - Materials Equipment, Technology and Supplies ANY SURGERY CENTER MATERIALS MANAGEMENT PROCEDURES Purchase Order Initiated Materials Coordinator >$5,000 Approval < $5,000 Approval Clinical /Medical Director Executive Director Order Placed Materials Coordinator Order Received Materials Coordinator Complete Shipment? No Yes Copy of P.O. & Packing Slip to A/P Complete Materials Coordinator Shipment? No Reconciles P. O., Packing Slip and Invoices Accounts Payable Clerk To A/P Procedures 35 Standardization of instrumentation and supplies Supply Expense accounts for 28% (VMG) total expense JIT inventory Implant consignments Case cost analysis best practices among surgeons and benchmarks Open only what is needed hold supplies until needed keep preference cards up to date 36 9

10 29% 29% 28% 26% 38% 35% 34% 29% 37% 30% 29% 25% 0% 0% 0% 0% 0% 0% 0% 0% Ophthalmology 2% GY N 20% Oral and Dental 4% Ortho Pain 11% Management 2% Gen 50% Urology 10% ENT 0% % 0% 0% 0% 0% 0% 0% 0% 5/28/2013 Volume and Case Costing Accurate budgeting and projections Case costing (knowing what it costs to do cases) leverage when negotiating payor contracts and supplier contracts Value Analysis Committee decides when new supplies, implants, equipment will be considered for purchase 37 Performance Measurement (clinical and financial) External benchmarking ASCA AAAHC Quality Institute VMG State DOH State associations management company Internal benchmarking study within your organization a physician or process over time to determine best practice within your organization Clinical and financial outcomes transfers, infections, adverse occurrences financial ratios (cost of staffing or supplies % of total expense or % of NR) 38 Dashboard DASHBOARD for il 2010 NUM BER OF CASES isions % 30% 20% 10% 0% Supply Cost as a % of Net Revenue Total Personnel Cost as a % of Total Operating Cost 40% YEAR to DATE CASES by SPECIALTY 1% Podiatry 120% 100% 80% 60% 40% 20% 0% Total Costs as a % of Net Revenue 108% 104% 87% 98% 43 ACCOUNTS RECEIVABLE DAYS 30% % 3 CLINICAL LABOR HOURS PER CASE Any Surgery Center TOTAL LABOR HOURS PER CASE Total Personel Cost as a % of Net Revenue 50% 40% 30% 20% 10%

11 Grow or Control: Challenges? Reaching a critical point can t get cases on the schedule in a timely manner? good problem to have you ve maximized productivity and efficiencies discussed to expand on site or build denovo infrastructure can handle it LSC built with additional shelled OR(s) designed for future growth 41 Shrinking: Challenges? Case volumes have declined and you are faced with new problems? gaps developing in the schedule Hrs / Case growing profitability is declining distributions not possible or decreasing in frequency or $$ Tough decisions: close a room adjust schedule to fewer or shorter days changes in staffing philosophy 42 ASC Ownership 43 Affordable Care Act History: ASC payments frozen for past 7 of 9 years HOPD vs ASC % HOPD payment methodology % HOPD % HOPD % HOPD % HOPD % HOPD (per ASCA 1) HOPD = 2.1% vs ASC 0.6% increase» 1.4% inflation increase CPI 0.8% productivity reduction Geographical adjustments may decrease further 44 11

12 Quality Reporting Reimbursement Quality Reporting began ober 1, 2012 to determine payment in 2014 (2% reduction for non-compliance) Quality Measures adopted by CMS Developed by the ASC industry ASC Quality Collaboration Endorsed by National Quality Forum /ASCFocusMagazine/Medicare2012Measures/ Based on participation in reporting G codes Quality Measures Specifications Manual - Manualhttps://higherlogicdownload.s3.amazonaws.com/ASCACONNE CT/ASCSpecsManual%20_Updatedy2012.pdf?AWSAccessKeyId=A KIAJH5D4I4FWRALBOUA&Expires= &Signature=KKuQC% 2FM8r6i2JRqvCmgBUaXf1GY%3D Quality Measure Implementation Plan 45 ASCA website No new measures added 1, ASCA website Definitions 47 Considerations.. What is our long term strategy for the ASC? Is the ASC a financial investment or a low cost site of care where the physicians have significant input and control of their environment?... Why are they invested? What is our succession plan? What is happening in our community that may impact the ASC volumes and reimbursement over the next 5 years. Or longer? (physician loyalty, payor contracts) Who are our competitors? What kinds of challenges or constraints might we face? (location or age of the physical plant) Are we the best we can be: efficient, cost conscious, standardized, etc 48 12

13 Thank You! Questions? 49DQM 13