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How We Made Part-time Staffing Work
Moving to this model helps control payroll expenses in the face of diminishing reimbursements. Plus, 2006 salary survey results.
Donald Cook
Publish Date: October 10, 2007   |  Tags:   Staffing

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."

What ASC Administrators and Staff Earn

Title

Median Compensation

Range

Administrator

$95,500

$52,000 to $300,000

Nursing Director

$72,804

$56,000 to $120,000

OR Manager

$66,000

$47,000 to $90,000

OR Nurse

$58,000

$37,440 to $89,000

Pre-op Nurse

$52,600

$37,440 to $84,000

Recovery Nurse

$57,500

$37,440 to $89,000

LPNs

$35,000

$33,280 to $50,000

OR Tech

$37,000

$29,120 to $60,000

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.

Salary Survey Results

Find out what your colleagues are really making - as well as what they're paying their staff.

Ever wonder how your staff salaries compare with those at other practices? Are you paying enough to retain good employees or attract new ones? To learn the going rates for clinical and clerical staffers, we sent an online survey to a sampling of our readers. Here's a summary of the results based on the 223 responses we received.

Once again, it pays to manage an ASC: Administrators of surgical centers earned an average of $95,500 in 2006, tops among outpatient surgery professionals. That marks a sizable increase over the $90,000 salary ASC administrators reported in 2005. Managers of hospital outpatient surgery departments took home $86,500 last year, similar to the $87,000 they earned in 2005.

Nearly three-fourths of ASC administrators were eligible for bonuses, earning an average of $8,000 in supplemental income. Only half of HOPD managers received bonuses, averaging $7,500. Bonuses in ASCs were often based on the facility's profits while patient satisfaction scores and meeting financial benchmarks determined the distribution of bonuses to most HOPD managers.

Salaries were comparable between clinical positions in freestanding surgical center and general hospital settings. OR managers earned slightly more in hospitals ($72,500) than they did in ASCs ($66,000). OR nurses in ASCs earned slightly more than their counterparts in hospital settings, $58,000 to $55,500, respectively. The median compensation for pre-op and recovery nurses in HOPDs ($54,750) and ASCs ($55,000) was nearly identical. OR techs in HOPDs earned an average of $36,500; those in ASCs were paid $37,000. LPNs earned identical average salaries - $35,000 - in both settings.

ASC business managers averaged $52,000; receptionists took home a median salary of $27,000 ($12.98 per hour) coders and billers earned $35,000 ($16.83 per hour) and schedulers $31,500 ($15.14 per hour).

Overall, ASC and HOPD administrators were satisfied with their abilities to recruit nurses, pay nurses what they deserve and maintain nurses on staff. Most hospital administrators say the nursing shortage hasn't had a noticeable impact on nurses' wages. Some ASC administrators, however, report that they have increased nurses' salaries to compete with hospitals for qualified OR nurses.

One Massachusetts-based administrator expressed frustration in competing with Boston's hospitals. "We're just west of the city and due to the inner-city hospitals raising their prices, we've seen nurses with outrageous salaries coming from those hospitals," she reports. "Some nurses just 15 miles west of the city make as much as $15 less an hour. We've been searching for nurses for about two months and have gotten minimal qualified applicants."

Another ASC administrator believes the work environment in her facility helps in staff recruitment and retention, even if nurses earn less than they do in hospitals. "We have been fortunate with the RN staff as they don't mind that their salaries are less in lieu of not having to work off-shifts, take mandatory call and work weekends," she reports. "We have been open since 1998 and our turnover has been less than 1 percent."

Being physician-owned is a drawback to salary negotiations, says another ASC administrator, because the surgeons may not respond until staff start leaving for better-paying positions.

Some HOPD administrators, meanwhile, voice concerns over recruitment difficulties and the inability to retain staff because of the changing culture in today's ORs. "Staff don't want to work full-time, but do want higher salaries," says one hospital administrator. "Workers are focused on the present and willing to accept that they are temporary employees with very little loyalty to the facility."

One hospital manager voiced frustration over not being able to reward quality nurses with higher salaries. She says her hospital needs to recognize high performers and not provide bonuses or pay increases just because a nurse shows up every day.

Whether managing an ASC or HOPD, several of those we surveyed expressed familiar concerns about being overworked and underpaid. "As a manager that often works in the OR, I am usually at work for 12-plus hours," says a hospital nurse. "I fill in for sick calls as well as taking care of the day-to-day managerial paperwork. That's nothing new for managers, but the nursing management's yearly salary increase does not keep up with the nurses' annual increase, which leads to frustration."

In the end, an essential part of a successful surgical facility involves controlling spending on the people who make the place tick. "This is a unique setting in which nurses are a necessity," says one hospital administrator, "and are viewed as a huge expense."

- Daniel Cook

What ASC Support Staff Earn

Title

Median Compensation

Range

Business Manager

$52,000

$39,500 to $100,000

Coder/Biller

$35,000

$27,000 to $70,000

Materials Manager

$39,000

$27,000 to $63,500

Reprocessor

$27,500

$23,000 to $41,600

Scheduler

$31.500

$20,800 to $51,000

Receptionist

$27,000

$18,760 to $44,000

What HOPD Directors and Staff Earn

Title

Median Compensation

Range

Director/Administrator

$86,500

$40,000 to $188,000

OR Manager

$72,500

$39,500 to $112,000

OR Nurse

$55,500

$37,400 to $75,000

Pre-op Nurse

$55,000

$37,400 to $72,000

Recovery Nurse

$54,500

$41,600 to $70,000

LPNs

$35,000

$24,960 to $51,000

OR Tech

$36,500

$20,800 to $58,000

SOURCE: Outpatient Surgery Reader Survey, n=223

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.

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