Save $15,000 with these cost-efficiency ideas
(Editor’s note: In this first part of a two-part series on cost savings in ambulatory surgery, we discuss how to save money in administrative support, benefits, salaries, and services. In next month’s issue, we’ll discuss telecommunications and occupancy costs.)
Brighton Surgery Center in Rochester, NY, saved an estimated $15,000 or more by using a template for its operative reports instead of hiring a full-time transcriptionist at $14-$15 an hour, says John J. Goehle, MBA, CPA, chief operating officer. Goehle gave a presentation on cost savings at the recent annual meeting of the Alexandria, VA-based Federated Ambulatory Surgery Association.
Physicians created a template of their operative report, and they fill in the blanks, Goehle says. A clerk uses the completed template to type the operative report, he says. This cut the time for dictation by more than half.
"The quality is better," says Goehle, referring to the reduction in the number of typos and rewrites.
However, this type of dictation can’t be done for every type of surgery, he acknowledges. While it works well for simple procedures such as eye cases, orthopedic cases have too much variation to use templates. Goehle now pays only $500 a month to a service for more complex dictation.
Consider Goehle’s other cost-efficiency ideas in the administrative support area:
- E-mail physicians instead of holding meetings. "It’s hard to get them together, and then they argue," Goehle says.
- Cut back on your administrative support. You don’t need as much secretarial support with e-mail, Goehle says. With call forwarding, you don’t need a secretary to take messages, he points out. When Goehle is not in the office, the office phone forwards to his cell phone, and if he can’t take the call, his cell phone voice mail answers. "I am more accessible, and I don’t need a secretary," he says.
- Don’t use a phone portal to answer your main line. A phone portal is a poor way to cut costs, because it doesn’t provide the personal approach to health care that managers strive for in outpatient surgery, he says.
- Don’t have a library or the support staff necessary to handle one. It’s quicker and cheaper to use an Intranet that has search engines and library resources, he says.
- Use the Intranet to provide daily news updates to your staff. "News can be transmitted rapidly," he says. "No daily meeting is necessary." This efficiency is important when you’re trying to send patients home, Goehle emphasizes.
Save on benefits, salaries
Goehle saved 20% on his workers’ compensation insurance by joining with providers in the New York Association of Ambulatory Surgery Centers and forming a "safety group." A safety group is a group of providers with similar safety statistics who approach insurers with a large volume of cases and negotiate discounts. In deciding who can join, the safety group considers losses, experiences, and operations of a facility, according to Bill LePage, insurance brokerage manager with Barry York, Rochester, NY. While the safety group was formed by members of the state surgery center association, others can apply, LePage says. The safety group ensures that no company can join the group unless its safety statistics are in line with the group’s members. You can find a safety group by discussing the option with your state surgery center association or your broker, Goehle suggests.
Also, before your annual reassessment, work with a broker to examine options for workers’ compensation insurance, he advises. When his carrier was going to increase rates by 50%, Goehle’s broker found a carrier that charged him less than his current one.
Request competitive bids on all insurances, from liability to health, each year, suggests Roger Pence, administrative director of Mount Nittany Surgical Center in State College, PA, and president of FWI Healthcare, an Edgarton, OH-based consulting firm primarily serving ambulatory health care providers.
"Don’t jump companies too frequently, but do check their rates," Pence advises.
Consider these other areas for savings:
- Hire more experienced staff. Goehle tries to hire staff with 15 or more years of experience. Also, he immediately vests them in the company’s 401(k) plan. "You make up the cost if you avoid one employee turnover per year," he says.
- Hire part time/PRN employees who are not provided benefits, Pence suggests.
- Compare different health insurance policies, Goehle advises. Balance the facility’s cost and the employee’s cost.
- Professional employee organizations or medical societies may have benefit plans you can use, Goehle says.
"They also negotiate for medical and dental," he says.
Your local chamber of commerce also may offer benefit plans you can use, he adds.
• Keep your accounting services in-house if you can afford it, Goehle suggests. A strong accounting function can pay for itself in improved financial information and more current financial statements, he says.
• There are several levels of accounting services. In an audit, a firm attests to the reliability of your statements. With this option, which is the most expensive, a firm is in your office for one to two weeks. At a minimum, use the "review" option, which is the next-to-least-expensive option, he says. The firm will be in your facility for a few days, up to one week.
• Obtain a couple of bids for accounting services. A local firm may charge you about $13,000, while a large national firm may charge you twice as much.
Many good companies have been started by former employees of major firms, says Jerry W. Henderson, RN, MBA, CNOR, CASC, executive director of the SurgiCenter of Baltimore in Owings Mills, MD. "They have all the same certifications but charge less," Henderson says.
• Bundle your tax service with your audit. "Service is more important than price," Goehle says.
• Rather than having one legal firm handle all of your business, save money by spreading it around to three or four firms, he advises. For fraud and abuse, use a firm with a national presence, he suggests. For non-paying patients, you can use a local firm that will be less expensive.
• Perform cost comparisons between providing services in-house and contracting, including housekeeping, purchasing, and patient accounting (insurance verification, billing, and collecting), Pence suggests.
• Look for high-quality contractors for your trash and linen services. Don’t accept a bid based solely on the lowest cost, Goehle advises.
In Rochester, he uses a laundry that does most of the laundry for surgery centers and hospitals in central New York state. However, in the past, he had a problem with the quality of this laundry service, and he switched to a local linen service that geared up to clean his center’s large amount of linens.
"They did a great job for two years, then the quality diminished," Goehle says. "The original provider was aggressive in recruiting us back."
The lesson? Don’t take quality for granted, and be willing to look for local providers who may offer the same level of service. "We played hardball, and we ended up with good quality and good prices," Goehle says.
For more information on minimizing overhead, contact:
- John J. Goehle, MBA, CPA, Chief Operating Officer, Brighton Surgery Center, 980 Westfall Road, Suite 300, Rochester, NY 14618. Telephone: (585) 295-8500. E-mail: email@example.com.