The keys to a healthy profit margin are patients who have good insurance and pay their co-pays on time and in full, right? The team at Rockford (Ill.) Gastroenterology Associates will tell you that there's much more to it than that. Rockford has pulled off the rare trifecta: It's profitable, charitable and cost-conscious. It's cut costs enough to ensure that all patients, regardless of their ability to pay, can receive treatment.
"We're open and transparent with our staff about costs, and we talk to them about how these costs impact the patient," says Erica Natal, BSN, MHA, MBA, director of clinical services and this year's OR Excellence Award Winner for Financial Management. "Keeping costs down for our patients is even a part of our mission statement here."
Staff take that mission statement seriously. They work finely tuned schedules and keep detailed records of supplies to let every patient possible come to the center while staying in the black. "We give employees a bonus twice a year so long as the center remains profitable," says Ms. Natal. "So far, we've always given out those bonuses."
Finding staffing solutions
Ms. Natal says that finding a staffing schedule that balances the needs of patients without sacrificing productivity is crucial to the center's financial success. Finding that fine balance took some work.
"When I came here 8 years ago, all staff came in no matter what our case load looked like," says Ms. Natal. "We would have a full department even if our schedule was light. That just wasn't useful."
To wrangle in staffing costs, Ms. Natal created a staffing grid that tells her how many staff members are needed based on the number of patients and ORs in use. "If all 4 ORs are running, I've figured that we need 10 RNs and 7 aids or techs," she says.
This grid helps make the schedule and, on light days, determine if employees can head home early. Ms. Natal admits staff were initially hesitant, especially since they were used to a guaranteed 40 hours regardless of whether the case load called for it. To get them on board, the center came up with a fair and flexible policy for low-census days.
"What helped them get on board was that we didn't force them to use vacation time if we didn't need them the full day," she says. "If the schedule was light, we gave them the opportunity to either use vacation time or just not get paid those hours." Employees are asked to go home early on a rotating basis and volunteers are accepted, adds Ms. Natal.
Another way she managed staffing costs was to move to a "modified full-time model." The center considers full-time employees those who work 30 hours a week. Since employees work 10-hour days, staff can pick up extra hours and work a 4th day if the schedule calls for it, without eating into overtime. "They still receive the benefits that a 40-hour worker would, and it gives us those 10 hours as a cushion," says Ms. Natal. "It keeps expectations reasonable and makes room for those low-census days."
SKIN CANCER & RECONSTRUCTIVE SURGERY CENTER
After the SCARS Center in Newport Beach, Calif., decided to track every cost associated with every case, OR Manager Darren Burchartz, ST, and Medical Director Simon Madorsky, MD, hit a snag. Software designed for the job was pricey and would take weeks to properly train staff on. So they decided to design their own system.
"We wanted to know the real cost of an operation," says Mr. Burchartz. "When we expanded from skin cancer treatment, facial reconstruction and ENT to higher-cost cases such as orthopedics, neuro spine and oculoplastics, we knew a system needed to be in place."
The center uses Google Sheets a free, cloud-based spreadsheet program to track all case costs, including supplies, labor and equipment rental fees. To do this, Mr. Burchartz and Dr. Madorsky created 2 spreadsheets that make up the backbone of the system a master sheet and a case charge template.
Here's how it works. When a patient is scheduled for surgery, the front desk staff uses the template to create a case charge spreadsheet for that patient. This sheet lists supplies, costs and hours used in the OR. The center's master document has a link for each of these patient's case cost sheets. On the day of surgery, a nurse from the surgical team logs into the master document and enters the patient's name into the search bar. She then pulls up the patient's case charge sheet. After that, the nurse goes down the list of supplies and tallies how many of each are used in the case, as well as the number of staff working the OR. Hidden equations in the spreadsheet's cells add up costs for each item, as well as a total cost for the case.
Mr. Burchartz can then review the document and scan in invoices for rental equipment used in the procedure. Since the spreadsheets are part of the Google Cloud web-based system, the center's staff, OR manager, administrator, bookkeeper and medical director can review and edit them simultaneously. Individuals can even comment on the cells in the spreadsheet, so questions that pop up are quickly answered online, says Mr. Burchartz.
When completed, the spreadsheets give the center a raw look at the expenses associated with every case performed. And because the individual cases are categorized by surgeon name in the master document, the center can use the data to track a doc's use of supplies and see if his case booking time is matching actual procedure time, among other benchmarking items.
"It's become almost like the backbone to our well-oiled machine," says Mr. Burchartz. "We not only use it to track our costs, but also to provide patients with cash quotes, maintain accurate inventory of supplies, and use it for our bookkeeping, insurance deductions and billing." The best part? "It cost us nothing to purchase."
Supply costs in check
Supply inventory is an area where costs can add up quickly without a watchful eye. At Rockford, Ms. Natal uses a few simple approaches to keep her supply costs in check.
Finding a way to follow where the money is going is essential, says Ms. Natal. At first, she says Rockford struggled with tracking vendor costs, which led to spikes and drops that no one could account for. But now, Ms. Natal says she uses a simple Excel spreadsheet to track price fluctuations and keep managers accountable. The spreadsheet lists all of the center's vendors and costs each month. At the end of the month, the center's accounts payable department goes through the sheet and inputs the total costs paid out to each vendor. If there's a dramatic change from one month to the next, the manager who deals with that vendor is on the hook to explain why.
"I might stop by that manager's office and say, 'Hey, I noticed XYZ Vendor's costs have gone up. Why?'" she says. "She may know right off the bat or she may have to dig in to find out why. Sometimes it's something as simple as she's going on vacation so she ordered an extra week's worth."
Not only does this system track costs, it also helps the center save. For example, if there's a medication shortage that means prices are increasing, the center looks to the spreadsheet to find other areas to pare down to make up the difference. "Since starting the spreadsheet, we've remained stable or decreased costs for our vendors," she says.
The way supplies are purchased is also important. Supplies are ordered in small batches a week at a time to avoid hoarding unnecessary inventory, says Ms. Natal. Staff are also the ones in charge of using the center's barcoding system to determine the supplies needed for the week.
This process keeps staff aware of the costs and supplies needed to run the center, says Ms. Natal. "Our staff does most of the ordering, and they now understand the importance of keeping just what we need to get through the week on the shelf, and not hoarding supplies that might otherwise expire," she says.
This team effort to wrangle in costs lets the center make a commitment to care for the community, says Ms. Natal. "We understand that not everyone can afford health care, but we don't want to limit access to care," she adds. "One of the reasons we're able to do this is because we really watch our costs."