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Do You Measure Up?
Compare your financial and clinical performance to established surgical benchmarks.
Daniel Cook
Publish Date: October 10, 2007

Can you turn over a room in 10 minutes? Perform 11 cases in each OR, each day? Get orthopedic patients in and out of the OR in 74 minutes? Move bills out of accounts receivable in 35 days? These are but a few of the industry's benchmarks we've gathered for you. We asked a few of the companies and associations that capture and analyze clinical and financial data for the ambulatory surgery industry to share with us a key benchmark or two. As you might imagine, we had to do a little arm-twisting, as much of what you're about to read is proprietary.

In the pages that follow, we'll offer you a glimpse behind the curtain at the performance of surgical centers nationwide. Read on to see how your facility measures up against established industry standards.

10 minutes
OR turnover times between like cases
Provided by Earnhart and Associates (based on internal benchmarks)
Like the four-minute mile, the 10-minute room turnover has become the time to meet or beat in outpatient surgery. "If our centers aren't turning a room over in 10 minutes, there's a problem we need to fix," says Luke Lambert, CEO of Ambulatory Surgery Centers of America in Norwell, Mass.

"When surgeons bring their cases to your center, they want to start on time and finish on time to make enough money to make it worth their while," says Stephen Earnhart, president and CEO of Earnhart and Associates in Austin, Texas.

11 cases
Number of procedures that should be performed per OR, per day
Ambulatory Surgery Centers of America (based on internal benchmarks)
Using your ORs to maximum capacity drives a number of other factors of success, says Mr. Lambert. If you open an OR for a day, he says, staffing costs will be the same whether you do five cases or 11 cases. "Increasing the amount of cases cuts your staff cost per case in half," notes Mr. Lambert.

Only 53 percent of OR capacity is being used, according to the 215 surgical managers polled by McKesson Provider Technologies in Alpharetta, Ga. "Adding just two cases per day across a surgical suite could generate between $3 million and $7 million in additional gross revenue [annually] for the average organization," says McKesson's Todd Tabel.

Anne Cranny, RN, BS, patient care manager of the surgicenter at Bryn Mawr (Pa.) Hospital, says her center can perform 11 cataract or eight orthopedic cases in one OR. So what's the minimum number of cases for which Ms. Cranny would open a room? After a pause, she says, "I'd open it up for another three or four."

35 days
Average time bills should spend in accounts receivable
FASA's 2004 ASC Financial Benchmarking Survey (based on 400 facilities polled)
Active collection brings more money into your facility sooner, because your chance for collecting outstanding bills decreases the longer they sit in AR, says Mr. Lambert. Some payers also have certain deadlines for receiving a clean claim, he notes, and "you may find that you have a deadline problem if you take a lax approach to collecting on accounts receivables," he says.

"You always want to keep the time as short as possible," says Ms. Cranny, who notes her staff sends billed charges by one day post-op. To speed that process along, Bryn Mawr created separate charge sheets for each specialty. Each sheet contains check boxes for every piece of equipment that could be used in a case. The circulating nurse simply checks off what was used and gives it to the billing secretary. A similar process is in place for the recovery staff.

Half of the 148 surgery centers who participated in the Medical Group Management Association's (MGMA) Ambulatory Surgery Center Performance Survey report zero to 30 days in AR; about 20 percent report 31 to 60 days in AR; about 10 percent report 61 to 90 days in AR; and slightly more than 14 percent report more than 120 days in AR.

128 minutes
Patient facility time for cataract surgery
AAAHC (based on 25 facilities polled)
Facility times measure the total time a patient spends at a center, from admission to meeting eligibility requirements for discharge, says Naomi Kuznets, PhD, director of the Institute for Quality Improvement at the Accreditation Association for Ambulatory Health Care. She says the best performing facilities provide patients with HIPAA and insurance forms before the day of surgery, have a nurse assigned to greet the patient and pre-, intra- and post-op forms designed with checkboxes.

Ms. Cranny thinks 128 minutes sounds about right, noting her cataract patients spend a half-hour in pre-op, 35 minutes in the OR and 45 minutes to an hour in PACU. She says the hospital is hoping to purchase new stretchers to cut minutes off the pre-op times. "Normally patients walk from pre-op to the OR," she says. "We'd prefer to have them lying on a stretcher outside the OR door, ready to go in as soon as the previous patient leaves."

She'd like the patients to remain on the same stretcher for the procedure as well, but she's been unable to locate a brand that satisfies both the patient's comfort and surgeon's preference.

0.51% to 1.50%
Range of infection rate reported by 16.4 percent of 400 facilities polled
FASA's Outcomes Monitoring Project
Bryn Mawr's infection control department wants antibiotics given from 60 minutes to zero minutes before incision. To aid in the tracking process, the circulating nurse records the time antibiotics were administered, and the time of the incision. That information is collected for every orthopedic case, tallied by Ms. Cranny every two weeks and forwarded to the infectious disease nurse.

$818
Revenue per GI case

$74
Supply cost per GI case

$996
Revenue per ophthalmology case

$262
Supply cost per ophthalmology case

$1,497
Revenue per orthopedic case

$289
Supply cost per orthopedic case
Medibis (based on 42 facilities polled)
It's interesting to note how much supply costs differ by specialty. In this sample culled from Medibis's Web-based analytical reporting product, supplies account for 9 percent of GI cases, 26 percent of ophthalmology cases and 19 percent of orthopedics cases.

57 percent
Case costs allocated for supplies and labor
FASA's 2004 ASC Financial Benchmarking Survey
Staffing and surgical supplies are your top two expenses. Knowing what other facilities with similar caseloads are spending lets you determine if your supply and staffing costs per case are too high. "Can you lower supply costs? What about support staff expense?" asks Dan Stech, MBA, CMPE, director of survey operations for MGMA. "Those are the two biggest cost factors facing facility managers today."

<7 percent
Initial claims denial rate
FASA's Outcomes Monitoring Project
Nearly one-third (30.5 percent) of the 400 ASCs that FASA polled say they've never had an initial insurance claim denied. At the other end of the scale, 14.6 percent of respondents indicated an initial claims denial rate in more than 7 percent of patient encounters.

The higher the percentage of denials, says Kathy Bryant, JD, executive director of FASA, the more likely you're billing insurers for things they won't cover. "If you're in the 7 percent denial range," she says, "try to get down to 5 percent in the next few months." Her advice: Review payer contracts to determine exactly what procedures are covered and what you get reimbursed.

Clear coding and capturing the proper charges increases your chance of getting claims accepted, says Ms. Cranny, who believes the charge sheets foster accurate documentation. "The nurse doesn't rely on her memory to note the items used in the case," she explains. "Seeing the checklist helps ensure she'll record the supplies for which we need to charge."

A Year in the Life of a Surgical Center

Here's a snapshot of the key performance indicators of a surgical center performing 3,000 to 4,999 cases per year, according to the Medical Group Management Association's Ambulatory Surgery Center Performance Survey (n=148).

Case volume per year

4,005

Cases per month

334

Gross charges

$7.62 million

Revenue

$4.11 million

Revenue per case

$988.05

Number of staff

21.75

Staff cost as % of revenue

25.93%

Medical and surgical supply

$822,444

Medical and surgical supply cost as a % of revenue

17.26%

Medical and surgical supply cost per case

$184.16

Operating cost per case per case

$772.13

Net income

$1.01 million

Net income as a % of revenue

31.86%

Net income per case

$249.18

$274
Salary and benefits cost per case
FASA's 2004 ASC Financial Benchmarking Survey
Centers with the lowest profitability spend $379 per case on salaries and benefits. High-profit centers spend $274 per case. Ms. Bryant warns that the numbers were taken from top-performing accredited facilities, but a lesson can still be extrapolated from the figures. "There is a clear relationship between profitability and salary," she says. "The more profitable centers are good at lowering the cost of salary and benefits per case."

Are your salaries in line with what other facilities pay their staff? Could you get a better deal on the cost of the employee benefits package you provide? Those are good places to start, says Ms. Bryant, but improving your per-case expense is also about improving the efficiency and productivity of your staff. "Sometimes the process we impose on staff makes them less efficient," she says. "Ask your employees for ways they can perform more efficiently, because they'll often know."

The challenge, according to Ms. Cranny, is to walk (tiptoe, she says) the line between keeping your employees happy and expenses low. Ms. Cranny also realizes the importance of getting the most out of the staff.

"They really have the best ideas, especially when you consider I work with women who've been here for 25 or more years," she says.

Bryn Mawr implemented unit councils to get the staff more involved in the decision-making process of the surgicenter. The unit councils are comprised of the center's secretary, scrub tech, and RNs from the OR and PACU. They meet monthly to come up with solutions to problems or ways to run the department more efficiently, says Ms. Cranny, who does not sit in on the meetings. "The council gives them a shared responsibility to come up with new ideas for the entire department," she says.

74 minutes
Average OR time for orthopedic cases

22 minutes
Average OR time for GI endoscopy cases
Surgical Outcomes (procedure-specific reports are generated from a database of more than 400,000 records)
Operating room time (OR time in to OR time out) is an important utilization factor in determining efficiency and productivity, says Jennifer Green of Surgical Outcomes. "The old adage 'time is money' is certainly true when evaluating operating room efficiency, and if a facility's OR time is significantly longer than their surgery time, it could mean that time is being wasted."

Ms. Cranny believes this is a tough number to gauge, but her assessment has been aided by OR scheduling software that tracks procedure times. The program calculates the mean procedure times from the last 12 cases performed by each surgeon, and prevents the docs from scheduling blocks for less than the calculated averages.

52 percent
Percentage of facilities reporting zero transfers to acute care hospitals per 1,000 patient encounters
FASA's Outcomes Monitoring Project
Measuring transfer rate is very interesting, says Ms. Bryant, because of the concern over the safety of freestanding ASCs.

"As long as your pre-op assessment and H&Ps are in order, there shouldn't be too much of a concern," says Ms. Cranny, before cautioning that you can never truly tell how someone will react to surgery. "Don't take chances if you're in a freestanding center. The better job you do screening, the less chance you'll have for an issue."

The proof you need
If you've ignored benchmarking and outcomes monitoring, you might be flying blind, performing thousands of surgical procedures with little oversight. You might think your surgery or recovery times are on par when in fact your times are much longer than what others are doing. But if you don't measure yourself against your peers, you'll never know.

Taken alone, these numbers don't mean a whole lot. But when compared to your center's performance, they become an invaluable tool. "Benchmarking is a way of proving your care is either better than the national average or in clear need of improvement," says Ms. Green. "Benchmarking is that proof you need to truly assess your performance."

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