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DOING BUSINESS


OR Utilization The double-edged sword BY ARNE BROCK-UTNE, MD


Everyone wants their ASC to be busy, their operating rooms (OR) full and their profits rolling in. What is the definition of “full” and


can a center be “too full” or “too busy?” When we talk about how busy a center is, we are talking about OR uti- lization. How well are you using your fixed capacity (ORs) to drive your revenue (cases)?


So, what is OR Utilization? OR Utilization = total cases time sched- uled (set-up/breakdown + case time + turnovers)/total OR time available (8–10 hours per day per OR). A center can be under-utilized, optimally utilized or over-utilized. Let us start with under-utilization.


This would be less than 50 percent uti- lization. The problems here are you have fixed costs—rent, maintenance, utilities, administrative staff—that are not changing, and you are not fill- ing your ORs with revenue generating cases to cover these fixed costs. As you add cases, your variable costs—staff, equipment, medications etc.—rise. There is a point at which your revenue starts to reach above these costs and bring profits. An underutilized center might be just hitting break-even or sit- ting just underneath. Why is a center under-utilized?


And what can be done if your center is under-utilized?


A center can be under-utilized for reasons that are out of the center’s control. For example, the center just opened, a physician just left, a com- petitor opened next door, etc. How can you mitigate the impacts of these uncontrollable events? Time to think like a start-up com-


pany: cut all the fixed costs you can. When was the last time you looked at


your phone bill? Your Internet service provider (ISP) fees? Are these compa- nies tacking on random charges? How is the interest rate on any loans you have? It is time to pull out and dust off those old contracts. Consider staff- ing. Do you have too many full-time employees (FTE)? This might happen, and you might have to move some peo- ple to part-time or lay off some people. These are not easy decisions to make, and there are calculations to figure out how many people you need in each position depending on your current volume and projections.


What about other reasons for


under-utilization, things that you can control. If you have six ORs at your facility and your volume has dropped by 20 percent, do not continue to schedule all six ORs every day. Why?


20 ASC FOCUS JANUARY 2018 |www.ascfocus.org


You will be staffing all those six ORs with only partial days scheduled. I know all surgeons want to start at 7:30 am, but try to work with your physi- cian partners to see if they can follow each other, instead, or maybe do their cases in the afternoon. This is the time to sit down with your physician own- ers and go over the financial side of things. Remember, in medical school, how many days of finance training did we receive? Uh, that would be the big egg: zero. So, haul those physicians into your office and show them the hard numbers and let them know that if they want to continue the venture, they might need to make some adjustments. Of course, try to get more patients and more surgeons. Have you done any marketing? How is your website and your presence on social media? What


The advice and opinions expressed in this article are those of the author and do not represent official Ambulatory Surgery Center Association policy or opinion.


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