Perform financial analysis before adding cases

When adding new procedures at your facility, performing a financial analysis is a critical step.

"Take everything into account," says Dawn Q. McLane-Kinzie, RN, MSA, CASC, CNOR, vice president of National Surgical Care Aspen in Niwot, CO. Perform a complete financial analysis of the anticipated additions or changes, including capital investment and payback, additional resources that will be required including human resources and supplies, scheduling, and reimbursement by payers for the anticipated procedures, she says.

Equipment or supply vendors may have information, including coding and pricing, but it must be verified, outpatient surgery managers say.

Talk to your physicians who are adding cases to find out if they foresee any downtime, she suggests. Examine the needs for instrumentation and supplies. Determine if you can use supplies that are reusable, resposable, or disposable to reduce costs, McLane-Kinzie continues. "If it takes a few months of planning, it’s worth it," she adds.

When Amherst-based Ambulatory Surgery Center of Western New York facility was going multispecialty, Joan Dispenza, RN, MSN, CASC, the administrator, asked her surgeons for the preference cards so she could purchase the supplies and also to determine the cost per procedures.

"I realized that if I didn’t go back to payer and see changes in my reimbursement, I literally wouldn’t be able to do those cases, " she says. "I’d be losing on every case that came in."

How many cases needed to recoup costs?

When adding new procedures that require a significant investment of capital, such as orthopedics, determine how many cases you’re going to have to perform to recoup your costs. Talk with you vendors about equipment, and examine your options, McLane-Kinzie suggests. Determine if you should buy or lease on a cost-per-case basis, she advises.

When two new physicians wanted to perform gastrointestinal endoscopy at ORegon Surgicenter in Roseburg, OR, the center financed the equipment on a cost-per-case basis, with a minimum number of cases per year, says Vanessa Vu, MD, PhD, chief operating officer and medical director.

Another option is to lease equipment on a trial basis to determine if the service will be successful before making a capital outlay, McLane-Kinzie says. One of her centers was adding cataracts, but the eye surgeons were not owners. Also, there was another eye surgeon opening a facility in that town at the same time.

"We were a little worried they wouldn’t stay," she says. In response, the center leased the equipment on a cost-per-case basis. "We reduced our risk," McLane-Kinzie notes. "If the surgeons had left, we would have been stuck with all that equipment."