Same-Day Surgery Manager: Unconventional cost control and reduction measures
Unconventional cost control and reduction measures
By Stephen W. Earnhart, MS
CEO
Earnhart & Associates
Houston, TX
At some point, after reducing cost so much, we are going to realize that the best option is to not do surgery at all. Think of the savings!
As healthcare providers, over the years — the decades — we have been cutting and cutting and cutting so insurance companies can profit and profit and profit. Surgical reimbursement under accountable care organizations (ACOs) will be driven by YOU reducing cost. Really? I have nothing else to do? I guess we drove past controlling it sometime ago. I never got the memo.
What more can we reduce?
• Hospitals. Man, it is tough. You have so many masters to serve. Emergency trauma cases, major unexpected complicated findings in exploratory surgery, student nurse programs, interns, robotic surgery programs, huge overhead and contribution margins, and a system that inherently has not had to deal with cost reduction on the scale that you are going to be facing now.
Hospital managers are going to have to look at their issues realistically and understand they have to start providing different levels of care. You just cannot, absolutely cannot, continue to provide inpatient and outpatient surgical services under one roof or location. You must have a lower cost environment for the uncomplicated, predicable levels of surgical services. Comes again back to the development of off-site surgical hospital outpatient departments (HOPDs) with different staffing ratios, management, and organizational structure. These are tough decisions for upper management and hospital boards.
Hearing anything on tort reform? Wonder if that would cut healthcare costs? (Sarcasm.)
• Surgery centers. Fifty to 60% of your expense is personnel and supplies. I know I frequently beat up on our vendors to cut their cost and even their commissions, but I have to admit, I think they are down to bone. Most are in the same boat as we are. When we are in cost-cutting mode, we don't buy as much, and it hurts them just as much as us. While there might be a tad more to cut there, it probably is not worth the effort. You need to just control it.
Personnel cost, in hospitals and surgery centers, still is high. Because half of my clients are hospital-based, I recognize that it is much easier to justify their higher personnel levels than surgery centers. They have too much uncertainty with higher acuity cases, labor and delivery, call, and unpredictability.
We still are overstaffed. Like it or not, most of you will admit it only to yourselves, but you know you can make reductions.
But let's say you cut staff by one or two nurses. Is that going to slow your turnover time? What about when our surgeons become employees of the hospital? They aren't going to really care about turnover time anyway, will they? Ka-ching, ka-ching!
What if you cut one or two front desk staff? Will that slow down your registration time and delay cases?
What if we tell our surgeons that no more free lunch's on the days they have a full block of cases? What if we stop giving our busiest surgeons the ability to flip-flop rooms? Do we save money if they leave and go someplace else?
What if we stop buying new equipment and technology? Will that affect our quality of care?
What if we slow down payment to vendors and capture that prized 0.01% interest for an extra two weeks? Will the credit holds and case-on-delivery supply shipments not cost us more?
What if we eliminate patient nourishment in recovery? Can they wait until they get home, or will that cause more problems with the patient's recovery?
How much can we save if we eliminate those postop phone calls? There are valuable nursing hours spent on that. But will you lose your cost savings when one patient has a postoperative problem that isn't caught?
How much did you spend on your holiday party? Do you consider that a waste of money? What about morale and the cost of replacing staff?
What if we eliminate sending staff to conferences? Or buying subscriptions to industry journals and newsletters? Don't those actually save us money in helping us learn how to save money?
What if we have the staff clean the facility each day and save on housekeeping costs? Won't that increase infections?
What if we go back to paper and get rid of the cost of computers and software? Will we actually save money in the long run by doing that?
What if we lose our passion? What if it is burned out of us? What if no matter what we do, it is not enough? That is the hardest cut of all, my friends. [Editor's note: Earnhart & Associates is a consulting firm specializing in all aspects of outpatient surgery development and management. Earnhart & Associates' address is 238 S. Egret Bay Blvd., Suite 285, Houston, TX 77573-2682. Phone: (512) 297.7575. Fax: (512) 233.2979. E-mail: [email protected]. Web: www.earnhart.com.]
At some point, after reducing cost so much, we are going to realize that the best option is to not do surgery at all. Think of the savings!Subscribe Now for Access
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