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FEATURE


reduce the costs associated with their bank’s treasury service fees and copy machine leases. Others may have better luck with their medical waste and telecommunication contracts. No two ASCs are the same.” ASCs should look at their over-


Reduce Overhead Costs


Evaluate expenses, ask for better rates and verify billings BY ROBERT KURTZ


I


mproving your ASC’s bottom line does not necessarily require adding


new procedures, physicians or spe- cialties. Taking a closer look at some of the services and products your ASC is already paying for might be all you need to do.


“There are always ways to reduce


your overhead costs,” says Jennifer Morris, administrator of Surgicare of Wichita in Wichita, Kansas. “ My philosophy: The easiest way to make money is to save money.” Dan Schneider, chief executive officer of SIB Fixed Cost Reduction in Charleston, South Carolina, shares Morris’ view. “There is no subscrip- tion model in the ASC business. That means you need to keep finding ways of generating new revenue to make that increase stick. Higher revenues will increase profits sometimes—


18 ASC FOCUS APRIL 2019 | ascfocus.org


and only for a short time—but when you can achieve savings on recurring types of spend, those recurring sav- ings go straight to the bottom line and stay there.”


Getting to Work


When Morris assumed her current position, one of her first projects was to review her ASC’s contractor ven- dor files. “I contacted all our ven- dors and asked for better pricing. You should not be afraid to ask for lower rates or other incentives, such as free shipping. Most companies will work with you if you approach them and ask for a better contract.” With so many different types of


expenses, Schneider advises ASCs to take a broad approach when search- ing for savings. “For some ASCs, there may be good opportunities to


head expenses the same way people should look at their health, he sug- gests. “When you go for an annual checkup, you do not ask the doctor to only look at your left leg. Your left leg might be fine, but your right arm might have something wrong with it. You will not know unless the doc- tor examines your right arm. As with your expenses, you cannot determine what opportunities for improvement might be there unless you look closely at everything. And going to the doctor for a checkup does not mean you will never have to go back for another one. Review of overhead expenses is not a once-and-done exercise.” Pam Hooper, RN, chief executive officer of Consultants in Healthcare in Little Rock, Arkansas, and admin- istrator of four other Arkansas ASCs, says she routinely reviews her ASCs’ expenses. “Every month, I sit down and do a line-item review with a partner. We review our expenses and compare them to the month before and the same month from the previ- ous year. If an expense has gone up or down, I am expected to explain why. Being held accountable is a great motivator to keep finding sav- ings or at


least keep expenses in


check as much as possible.” Morris uses


different tactics to


secure recurring savings. Some call for a little extra work. “Service con- tracts should not automatically be renewed with an increase,” she says. “I will always ask for a discount or ask the vendor to match the previ- ous service contract when the price is increased. This will usually require going through a manager, but a few


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