Long-term cost management is among the greatest challenges for out-of-network ASCs. As the administrator of an out-of-network surgery center that performs more than 300 cases per month in a one-room OR, Toni Rambeau, CASC, has developed the necessary cost management strategies her center requires to sustain long-term profitability.
"Cost containment is how we are able to thrive and expand as an out-of-network-only center," said Ms. Rambeau, administrator of SurgCenter in Glen Burnie, Md. "Orthopedics can be very costly, but we work well together to find what the surgeon needs and also provide a price that makes us profitable at the same time."
Ms. Rambeau shared five essential strategies for eliminating unnecessary costs, securing reimbursements and educating center staff on the importance of cost containment in an out-of-network center.
1. Encourage physicians to test less expensive surgical tools. Though physicians may be partial to the surgical tools used during training and medical school, nudging them in the direction of less expensive alternatives with the help of a vendor is an effective cost-cutting strategy for the long term.
Ms. Rambeau will ask a sales vendor to come to the office with surgical tools ready to sample. She can then sit down with the vendor and the physician to compare two items side by side, allowing the physician to personally handle and assess the potential alternative.
"Ultimately it's their decision, but nine times out of ten they see that it's less expensive to go this route, and we'll move toward a less expensive item," said Ms. Rambeau.
2. Reprocess single use items. By using a consistent medical supply reprocessing company, surgery centers can save around 50 percent per item by sending in single use items and purchasing them back. SurgCenter uses Medisiss for its reprocessing needs, according to Ms. Rambeau.
"Once a procedure is finished, we clean the products and ship out a box of single use items every week to Medisiss," Ms. Rambeau said. "They run items through a battery of tests and clean and process them before sending them back to us. We purchase the products back from them, paying only half of what they initially cost."
Some items — including ENT shavers, blades, arthroscopic shavers and trocars for endoscopy — can be used many times over with this process.
3. Train other employees to be cost-conscious. Passing on cost cutting strategies to other employees in the center is crucial for maintaining a cost-conscious culture. When Ms. Rambeau and her employees perform equipment price comparison searches online, for instance, she ensures that the employees are aware of drastic price differences between companies and the need to persist in a search for a less expensive option.
For example, a company may be selling a simple shoulder traction kit for $400. But after several internet searches and phone calls to other companies, Ms. Rambeau will find that the same item is sold for $200, and then, eventually, $100. Throughout this process, it’s important to emphasize to employees that money saved will benefit them in the long term.
"I try to explain to an employee that spending the center's money is like spending her own money," Ms. Rambeau said. "The less you spend, the more benefits you get in the center in terms of raises and merit increases."
4. Work with a device management company to recover implant costs. When insurance companies such as Medicare and Blue Cross Blue Shield do not reimburse surgical centers for implant costs, a device management company such as Implantable Provider Group can be used to recover some of these funds, Ms. Rambeau said. IPG contracts with Blue Cross Blue Shield, for instance, and is able to negotiate for lower pricing due to its size and scope as a national company.
"If a patient with Blue Cross Blue Shield has a fractured ankle and comes to our center, the insurance company won't reimburse for the plate and screws," Ms. Rambeau said. "But IPG will bill Blue Cross Blue Shield for the cost and reimburse us."
5. Ensure staff is cross-trained and able to work flexible hours. On lighter case days, center staff should have the flexibility to leave when work is done to save money on staffing — a policy that can be established as early as during the initial job interview.
"It's the first thing out of my mouth in the interview – they have to be flexible," said Ms. Rambeau. "We can't guarantee 40 hours because there might be a couple of slow days here and there. I also cross-train my whole staff so that everybody can do everybody else's job if necessary."
More Articles on Orthopedic Surgery:
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5 Cost Cutting Strategies in Out-of-Network Orthopedic Surgery CentersWritten by Taryn Tawoda | March 14, 2012
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