Staffing your facility is a tricky task. On the one hand, you can't run the facility without enough people to do the job. On the other hand, it's your biggest cost item. Or, as one administrator more succinctly reported in Outpatient Surgery's fourth annual salary survey, staff are a necessary evil: "This is a unique setting in which nurses are a necessity, and are viewed as a huge expense."

And with good reason: According to the survey of 2006 salaries, the average OR nurse is earning upward of $56,000. Multiply that figure by a dozen, and that's only a fraction of your staffing costs; you still have to add clinical support and business office staff. Oh, and don't forget yourself.

You can only chip so much off of supply and other overhead costs - for better or worse, controlling spending on the people who make the place tick is key to your facility's financial success. I believe that maintaining salaries at 23 percent of revenue is an appropriate benchmark for busy centers. When I arrived at the Third Street Surgery Center in Los Angeles, its payroll-to-revenue ratio was above 30 percent. By transitioning from a full-time staffing model to a part-time model - today, only three of 27 workers are full-time - the ratio dropped to a far more acceptable 20 percent.

Let's say our center collects $300,000 per month, or $3.6 million per year. Our profits would increase by roughly $360,000. That's only part of the story. Although we lost dedicated workers who preferred to work full-time, we tapped into a pool of highly qualified healthcare professionals who desire part-time employment.

Cause for change
Some administrators believe insurance companies are putting the screws to physicians and that they have the right to use any means to increase reimbursements. It's a philosophy that led to egregious billing of workers' compensation cases throughout California: I saw $100,000 bills for two-hour ACL repairs and five-figure charges for simple epidurals.

What possible justification could facilities have for charging that much? They were profit-hungry, clearly abusing the system, and it cost the state dearly. Lawmakers responded in 2004 by capping workers' comp charges at 120 percent of Medicare fees.

The legislative action eliminated most of the facilities thriving on workers' comp payouts. But out-of-network overcharging subsequently increased, spurring Blue Cross of California to institute a daily $380 maximum payment for out-of-network procedures. Facility administrators squawked and the matter went to court, where Blue Cross eventually prevailed. Emboldened by the ruling, many of the state's other payers are following suit, limiting the profit potential for out-of-network cases.

With these profits essentially eliminated, contracted facilities are benefiting from an increase in surgical volume and I worked to align our center's cost structure to play ball with managed care. We're now contracted with over 95 percent of our patients' plans and we accept Medicare and Medicaid. Instead of relying on high returns from out-of-network billing, we aim to provide services within a cost structure that can be maintained with managed care reimbursements. That involves treating patients efficiently without sacrificing safety or compliance with regulatory issues. It also meant we had to change our staffing structure.

The part-time model eliminates paid time off (which in most cases is one-twelfth of a full-time salary's expense) and health insurance costs. That's a huge savings. Most part-time employees want a competitive hourly salary and rely on other sources, perhaps a spouse's plan, for health coverage.

That's not to say I dismiss our employees' welfare. We help find healthcare coverage for those who desire it, although only two of our 24 part-timers requested access to a plan. Many affordable options for major medical are available online and we direct employees to the best options for their needs. We also allocate $250 each month to the center's three full-time employees to use as payments for benefits.

Making the transition
We now have the business manager, the business office assistant and an OR tech as full-time employees. My company serves as the facility's administrator, but the business manager oversees a majority of the center's daily operations. I feel it is important to have a strong leader in this position. Additionally, two part-time assistants work between 12 and 24 hours a week to help run the front office.

Employing a full-time OR tech serves much the same purpose in the back of the facility. Our tech is involved with every case, handles materials management and frequently consults with the surgeons about equipment and supplies. A familiar face and consistent supervision of surgical supplies are essential for this role. Everyone else on the clinical staff is part-time, including the director of nursing, who works between 24 and 35 hours a week.

To make the part-time staffing model work, we compress the surgical schedule, starting cases at 7 a.m. or earlier and ending most days by noon. Block times for certain specialties are also limited to specific days of the week to ensure we can assign part-time nurses to cases that match their expertise; two days are allotted for orthopedic surgeries, three days for ophthalmology cases and two days for GI cases.

We also stagger the staff's schedule. PACU nurses, who aren't needed until the day's first patients are out of surgery, start at 9 am. They stay until 2 p.m., or until all patients are recovered and discharged. One nurse is scheduled between 2 p.m. and 4 p.m. for cleanup.

Is transitioning to a part-time model difficult? Yes. And even after additional training and time to adapt to the new schedule, some employees won't stick. You will likely have to change people instead of reassigning roles to the current staff. A nurse working full-time has specific expectations about work and the role of employment in her life, and she may have certain salary requirements. Many full-time workers also feel as if they've been demoted when asked to work part-time; most can't get through that feeling. We just lost a skilled OR tech who thought he could make the transition. He worked part-time for five months, decided he needed to work full-time and left for a position at a local hospital.

Those who desire part-time work often have positions elsewhere or graduate school commitments and are looking to supplement other weekly income without a full-time commitment. Others come from two-income families and may not need to stretch their paychecks to cover household expenses.

I've been asked if I sacrifice quality when hiring part-time help. My answer is an unequivocal no. Each of our part-timers is diligent, talented, driven and devoted - and also happen to be interested in working the occasional shift. We have a circulator who's in medical school and values the opportunity to work two six-hour shifts each week between study sessions. One of our orthopedic techs helps during morning cases before working five hours each night in a tertiary hospital.

Many facilities in California don't have the volume of in-network cases to remain profitable and are not efficient enough to capitalize on the contracted cases they do have. I predict a drop in the number of viable centers in 2007, putting further pressure on cost control and spurring a need for administrators to work smarter, not harder. The part-time staffing model is part of that goal. We've become very efficient, maintained a skilled staff and increased the facility's profit potential.