Reporting and Data Mining to Improve Profitability at your ASC: 4 Tips From AHS
Written by Renee Tomcanin
Beckers ASC Review
April 15, 2010
Click here for the Becker’s ASC Review article (reproduced verbatim below)
In a market where case volumes are down, ASCs have focused on reducing costs and increased recruitment to keep margins steady. However, using data collected through your billing and collections department can help ASCs identify additional areas for improvement.
Bill Gilbert, vice president of marketing, and Brice Voithofer, vice president of ASC and anesthesia services for AdvantEdge Healthcare Solutions, discuss four tips for using data to improve profitability at your ASC.
1. Data show the true performance of surgeons. Data analysis can show surgery centers what procedures are best suited for the reimbursements needed to maintain profit margins, according to Mr. Voithofer. “Data captured in the billing system can be analyzed in many different ways, from the specialty level to the surgeon level to the contract level,” he says. “Centers can look at the different levels and decide the best ways to use specialties, surgeons and schedules.”
For example, a certain procedure may be profitable, but only in high volumes. If Dr. X can perform the procedure in one hour and Dr. Y takes three hours, it might be more advantageous to encourage Dr. X to shift more of these types of cases as opposed to Dr. Y. Using data that shows number of cases, reimbursements and OR time can help ASCs determine the right schedules, OR use and staffing levels that produce the best outcomes, according to Mr. Gilbert and Mr. Voithofer.
Mr. Voithofer says that mining the data in this way can show centers that specialties they thought were not profitable are suffering due to issues unrelated to what happens in the OR. “If a center receives 25 denials in a month from one urologist’s office because patients are lacking the proper authorizations, the reimbursement numbers can be misread, and the ASC might think urology itself is to blame. Looking at the data can help the center see the underlying issue and not dismiss a specialty that can be profitable for the center in the long run.”
2. Data also show the true performance of contracts. Data analysis can also show how managed care contracts are truly working for an ASC. “In one contract, Payor X may authorize $5,000 for a procedure; however, 50 percent of the patients that come through the center might have high-deductible plans, and data may show that it takes four to seven months for them to pay off their bills,” Mr. Voithofer says. “Payor Y, on the other hand, might pay $4,000, but with all of the patients that come through your center fully covered with much lower deductibles. Within 30 days you have your reimbursement.”
Using this data, centers can change their process for educating patients on their financial responsibilities. “Groups assume that procedures are fully covered, so they fail to take into consideration the time value of money and how the invent of increasing levels of deductibles have a material impact on the centers revenue,” Mr. Voithofer says.
Reviewing data can help ASCs and physician offices see what kinds of plans patients have and what trends exist. “Education starts in the physician’s office,” Mr. Voithofer says. “Physicians should take this early opportunity to discuss the patient’s responsibility and surgery locations and shift cases if necessary. It will also prepare patients for the bill and allow them to discuss factors such as their economic situation.”
ASCs should use this type of data to ensure that physicians’ offices are aware of possible issues and to fix any problematic areas.
3. Bring hard data with you into conversations with surgeons. Centers vary depending on their ownership and physician make-up, so it is important to consider your particular center when presenting data and potential areas for improvement. “It starts with hard data,” Mr. Gilbert says. “It takes out potential contentious attitudes and makes the discussion productive. You can say, ‘Here are the real numbers. How do we fix this?’ It is hard to argue with the facts, and most physicians understand the reality once you present it to them.”
Physician partners in ASCs typically have a higher level of entrepreneurial spirit and are willing to listen to ideas for the good of their center, Mr. Voithofer points out. Once data is presented, the next step should be a discussion of what is going on and how best to implement plans for improvement.
“I use the analogy of a baseball team,” Mr. Voithofer says. “The team may have multiple pitchers, but you can’t use the one star pitcher every day, all the time. The data may indicate that when Batter A goes up against Pitcher A he hits a home run 95 percent of the time. It’s all about allocating resources where they best fit and acknowledging relationships that will make a difference. In this case, I would caution on using Pitcher A when Batter A comes up to bat and instead put in another pitcher that the data suggests will net a better result.”
4. Look at data at least quarterly. Patterns in productivity, denials and contract utilization require ASCs to look at data across months, but Mr. Gilbert suggests that centers should look at data on at least a quarterly basis. “You really want to look at the number with some real frequency. The current market is all about working smarter given the challenges the industry faces. You want your ASC to look like a well-run business and evaluating trends can help you prepare for any problems,” he says.
ASCs also need to consider the nature of the business when gathering data and making changes. “Surgeries are scheduled months in advance, and it doesn’t make sense to clear the schedule to implement changes every time; this is not efficient or practical. Data should be used to lay the base for changes that will be integrated as the center continues to evolve throughout the year,” Mr. Voithofer says.
Mr. Voithofer also suggests ASCs enlist an outside company or resource to help gather data. “It can be overwhelming to try to run the center and gather information,” he says. “Administrators might not have the time to invest in analysis, and one option is to have an outside company normalize and look at the information from a different perspective.”