Applying Moneyball to Your ASC Use meaningful KPIs to help drive your business forward BY NADER SAMII

Going . . . going . . . gone! Everyone wants the home- run hitting hero on their team. And, for many years, professional base-

ball teams paid big money to sign up the likes of Barry Bonds, Hank Aaron, Alex Rodriguez and Sammy Sosa. Michael Lewis’ 2003 book, Mon-

eyball, however, explains how Oak- land Athletics General Manager, Billy Beane, did not buy into the typical baseball mindset. Indeed, Beane went beyond common metrics, such as home runs, to predict which players were most valuable in terms of actually helping the team win games. In essence, Beane zeroed in on metrics that really mat- tered—not what most people thought counted—and from this was empow- ered to make better decisions about where to direct his limited resources. More specifically, Beane turned away from conventionally accepted activity- focused metrics such as RBIs, stolen bases and batting average and turned toward achievement-focused metrics such as on-base percentage and slug- ging average—a true measure of the batting productivity of a player. As such, Beane signed up players that could make his team extraordi- narily competitive at a fraction of the cost required to pull in the traditional heavy hitters. This approach enabled the Oakland Athletics, with a payroll of just $41 million, to compete with the likes of the New York Yankees, a team that had $125 million to cover payroll expenses. My presentation at ASCA 2018, April 11–14, in Boston, Massachusetts, discusses how the Moneyball approach provides a practical lesson not only to baseball teams but to other sports teams and many other businesses as


desired results and then zero in on the KPIs that will get you there. More specifically, you need to develop and implement KPIs that: ■■

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help your organization define and track progress toward its end goals; are measurable; and

serve as the critical factors driving the success of your operation. To truly get to Moneyball-type met- rics, though, you need to take your KPI development a step further, focus- ing on metrics that will help you rap- idly grow your revenue, minimize your costs and ensure that you are maximiz- ing your cash flow while remaining highly compliant.

well. That being: Commonly accepted key performance indicators (KPI) are not always the ones that lead to suc- cess, rather, there are other less com- monly known KPIs that are ultimately more accurate in tracking true success for your organization and at a fraction of the cost.

Moneyball in Your ASC

What does this all mean for your ASC? While some might argue that there is a big difference between man- aging a baseball team and a surgery center, you would probably do very well to take the Moneyball lesson into account. As such, your ASC should go beyond using only common KPIs to assess progress and start leveraging more meaningful KPIs that will genu- inely help drive your business forward. To get started, you need to focus

keenly on your organization’s overall objectives, thoroughly describe your


One of the most commonly dis- cussed metrics in board meetings and with accountants is “days in accounts receivable (AR).” Days in AR is used to track the average number of days it takes to collect payments. So, on its face, it makes great sense that it would be a critical financial metric. That said, days in AR can be manipulated easily, thus making it a dangerous KPI to rely on too heavily. For example, if your payment posters are posting strictly according to the explanation of ben- efits (EOB), rather than analyzing the managed care contracts and appeal- ing any and all underpayments, includ- ing implants, then your days in AR will reduce, but it is highly likely that your all-important cash collections and cash-per-case metrics also will shrink. Thus, organizations that rely too heav- ily on days in AR might accomplish this goal at the cost of leaving money on the table. Similarly, another heavily used met- ric is “days to bill.” This metric tracks the average number of days from date of service of the procedure to the actual bill date, thus attempting to track the

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

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