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FEATURE Key Statistics


Know the numbers that help support your patients and ASC BY SAHELY MUKERJI


ASCs focus on patient safety and patient satisfaction while keeping an eye on profitability. To ensure that an ASC is performing at its best, many administrators keep track of bench- marks that reflect both the financial well-being of their center and its quality of care.


Surgical Management Professionals All administrators need to know at least two numbers when it comes to their center, says Reed Martin, chief operating officer of Surgical Man- agement Professionals in Sioux Falls, South


Dakota: month-to-date case


volume and cash receipts. “Case vol- ume is important for scheduling staff, and it is a good predictor of profitabil- ity for the month you are in,” he says. “Cash is the lifeblood of any facility. All administrators should know these two numbers at all times.”


18 ASC FOCUS JUNE/JULY 2015


In addition, several kinds of statis- tics, such as end-of-month financial statistics that include income, balance sheet and cash flow statements, are important, Martin says. “The income statement has many important statis- tics, such as gross charges or gross rev- enue and net revenue for the month,” he explains. “Gross is the sum of all the charges of the month. It is more impor- tant to know the net revenue, which is the amount expected to be collected on all cases. If your net has increased or decreased, an administrator needs to know why and understand the change; it could be a payer change, specialty mix change or a case type change.” Payer mix is an important number


to keep an eye on, Martin suggests. “If you did a lot of Medicare or Medicaid, your net will decline; if you did com- mercial insurance cases, your revenue will increase.”


Types of cases can have a large impact on an ASC’s bottom line because some cases take longer and more supplies and others take less time and fewer supplies, Martin adds. “If you did orthopedic and/or spine, you will have a high revenue; if you did GI and/or pain, you will have low net rev- enue per case,” he says. “If you did a large percentage of ENT sinus cases, that will increase the net revenue per case, versus a high percentage of tubes/ tonsils, which will lower the net reve- nue and overall profitability per case.” Other important statistics to track are the main expenses that every administrator has control over, such as supply, implant and pharmacy costs, and salary expenses, Martin says. “The specialty type and case type can have a large impact on these costs. For exam- ple, a total knee will have higher costs than a pain injection.” Salary cost should be looked at on a per case basis. “If the cost is increas- ing on a per case basis, you need to dig in deeper to determine why,” he says. “You may need to flex up in staffing if you have more cases and flex down with fewer cases. You also need to look at the gaps and openings and fill those gaps. Look at turnover times. Are they too long? It is very important to know salary expenses per case.”


Bottom line net income and days in accounts receivable (AR) are other vital numbers, Martin says. “A total yardstick is 40 days or less for AR,” he says. “That means you are collecting the bills that you are sending out. Also, keep track of the percent of your AR over 90 days; a good percent is 10.” Cash balance at the end of the month is also important to know, Martin says. “That is what you have for distribution to your physicians and bonuses. Your cash flow statement identifies what is generating and what is utilizing cash. “Keep an eye on whether your pay-


ables are increasing or decreasing,” Martin advises. “Your payables need


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