Winter 2018


Winning with Data By Larry Taylor


Health care today is driven by data. Your team needs to be at the top of its game when it comes to collecting the right data and putting it


to work to help you gain market share, negotiate better contracts, expand your programs, improve clinical outcomes and implement meaningful cost control.


Advancements in health care and ASC software, combined with on-demand research, make it possible for your team to be able to quickly pull, organize and analyze data for timely decision making. A snapshot of your monthly performance can be customized to meet physician needs and identify trends in your ASC. Special projects can be developed to analyze trends, costs, utilization of programs, physician’s utilization and specific items that drive down costs and increase margins. You can ask your team to prepare summary reports that highlight important trends that are easily reviewed at monthly meetings with individual physicians. These trending items include net revenue, salary expense per case, medical supply per case, implant cost per case, variable cost per case and total expense per case. They can also serve as the basis for deeper data dives.


Let’s examine a few ways ASC leaders can effectively leverage the data at their fingertips.


Moving Forward Supply costs. To complete a cost assessment and subsequent review process, your ASC team must possess accurate pricing and case use data and ensure timely data entry on cases under review. ASC software allows for costs to be entered with their specific cases. The circulator documenting these items must accurately capture all costs. Data


entry must be timely to include cases in data sets. When there are new items or cost changes, these must be entered in the system immediately to help ensure accurate tracking.


Staff expenses. In an ASC, one of the greatest costs and assets is human capital. Salary expenses are a large driver of total ASC expenses. There are many ways to approach evaluating salary costs or the encompassing expense of salary, wages and benefits. When simply expressed as salary cost per case, this rudimentary review takes the total expense divided by the number of cases in the same period. Alternatively, we can consider cost per minute in the OR. This calculation takes all salary dollars divided by OR minutes. By using cut-to-close and wheels-in- to-wheels-out time, we can identify additional trends.


Case costs. You can use these cost-per-minute calculations and communications to secure the attention of your entire ASC leadership team. Sharing this data can facilitate meaningful projects and help identify a wide array of areas of focus. For centers not yet calculating cost per minute and communicating these costs, know that discussions with all team members can be eye-opening. For instance, sharing an analysis that compares physician times by common CPT code can be enlightening.


Note: There are often outliers in data findings, so it is important to review the summary and individual case data closely. When adding financial performance to reports, make sure to only use accounts with zero balances to assure concise data.


Supply changes. When considering changing an implant, biological, disposable item or other type of supply, your team can gather and


present the necessary decision points (e.g., cost comparison, shelf life, cross utilization between programs, physician compliance, reduction or increased time in prep/operating room (OR) time or recovery, storage of item) and then conduct a trial to assure the new product meets individual standards. Don’t make the mistake of considering only the purchase price of the item and ignoring other critical factors.


Supply negotiations. Does your ASC use enough volume of a supply to support a deep discount on pricing? If your data supports this argument, it may be worthwhile to engage in negotiations with a supplier. A few factors to consider: Will the change affect pricing on other items from the supplier, and are there opportunities to secure a greater discount by changing supplies? Understand that changing a commodity item is much easier than changing a clinical preference item.


Final Thoughts These represent just some examples of how review of the data your ASC captures can help with overall facility performance enhancement. When you feel comfortable with the basics of data gathering analysis, the review process can be quickly expanded to other, more specific areas. The key to success is making sure your center is data driven and that everyone on your team knows what costs drive your center’s clinical and financial performance and results.


Larry Taylor, CASC, is president and chief executive officer of Practice Partners in Healthcare, an ASC management and development company based in Birmingham, Alabama. Write him at ltaylor@practicepartners.org.


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.


Fee-for-Service Remains Primary Source of Practice Revenue


Research published in an American Medical Association (AMA) report from late 2017 reveals that while a majority of physicians receive revenue from an alternative payment model (APM), most practice revenue is still generated by fee-for-service (FFS) payments.


4 ASC PHYSICIAN FOCUS


The data, based on survey responses from 3,500 physicians, found that, on average, nearly 71 percent of overall practice revenue in 2016 came from FFS payments. Nearly 60 percent of physicians indicated that their practices received revenue from at least one APM


in 2016. The highest participation rates were pay-for-performance and bundled payment arrangements (around 35 percent).


Access the AMA report at http://goo.gl/ ydKFWE.


Vol. 1, No. 4


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