EDUCATION PAYS The choices your physicians make may spell the difference between profit and loss with ventral hernia surgery.

Ventral hernia surgery is never going to be a financial bonanza for outpatient facilities, but does it have to be a losing proposition? Absolutely not. Several administrators we chatted with say the procedure can turn a nice profit, provided you carefully manage the significant number of variables involved.

The notion that ventral hernia repair is a loss leader comes from an oft-quoted 2013 study (tinyurl.com/l96qxyd) from the University of Kentucky College of Medicine, which concluded that "ventral hernia repair is associated with overall financial losses," often resulting, in fact, in "striking net financial losses."

Another fine mesh
An easy trap to fall into, says Debbie Teetzel, MSN, administrator of the Rocky Mountain Surgery Center in Englewood, Colo., is assuming your surgeons think about costs. "Sometimes they do," she says. "But sometimes they're not aware there's other stuff out there. Sometimes their decisions are based on which rep just took them golfing, or which one took them out to dinner. They say, 'I want this product' when they don't really know how much it costs, all they know is they liked the rep. So I do a tremendous amount of financial in-services with doctors."

Get surgeons to agree on a single mesh supplier and then leverage volume into purchasing power, says Michael Pankey, ADN, BA, MBA, administrator of the ASC of Spartanburg (S.C.). "I'll do a lunch with my surgeons," he says. "I'll bring 3 mesh types in, from 3 different suppliers, and I'll try to bring in the 3 lowest-priced meshes I can get my hands on. I put them in front of the surgeons, they look at them, they have discussions about what they like and don't like. And 9 times out of 10 they can come to a conclusion where the vast majority are satisfied with one group of mesh."

That kind of ongoing communication is crucial. "Our MDs and the mesh reps work together and then the chosen products must be on contract pricing," says another administrator.

"Finding a good product that is also cost effective is a challenge," says Kathryn Loretta Rice, BSN, CNOR, administrator of the Gwinnett Surgery Center in Lawrenceville, Ga., "but our doctors have agreed upon a certain mesh and that volume drives the cost down. It's also important to make sure you have a good buying group or GPO."

VOLUME MATTERS Get surgeons to agree on one mesh supplier and you may be able to leverage that purchasing power.

"We work on getting the cost of the mesh down," says Michael Westmiller, executive director of the Surgery Center of Southern Oregon in Medford. "The ultimate decision is the surgeon's, but we do review the cost of each type and brand with them."

Of course you never want to sacrifice quality or patient care in the name of price, but the folks we heard from feel strongly that you don't have to give up one for the other. "Some of the so-called off brands are coming in at some really good prices and really good quality material," says Mr. Pankey.

Keep in mind, however: Getting the message to stick may require eternal vigilance: "All doctors have their own personal preferences, usually based on experience, sometimes on a relationship with the rep," says another facility leader. "We have had some success with getting them to consider more cost-effective mesh short term, but after a while they always go back to their comfort zone."

If you can't get paid
Communicating with physicians is also the key to making sure they don't make promises you'd prefer not to keep.

"You have to educate your surgeons as to where they can do the surgeries and where they can't," says Mr. Pankey. "It's tough if they book a Medicare patient here to say, 'But we can't do that because Medicare doesn't reimburse for implants.' You have to work with the surgeons and make sure they're not booking cases that are going to lose us hundreds of dollars or more.

"For us, the payor must pay for the implant — we know that some will, so we'll go ahead, because that huge implant cost is off our shoulders, but it's probably only 25 or 30% of our patients. If you take all comers when it comes to ventral hernias, you'll lose money overall."

Some insurers will pay the full invoice cost for implants, but Ms. Teetzel is seeing a trend toward a single level of reimbursement, regardless of implant costs. "So if you use a less expensive mesh, you'll make a profit," she says, "but if you have one of those doctors that has to use the latest and greatest antibiotic-fused mesh, you're not going to make a profit."

Keep in mind also that what your insurer initially offers may not be the final word on the matter, says Mr. Pankey, if, that is, you can find out what a hospital's being paid for the same procedure. He explains: "You can go to the payor and say, 'Look, I know you're paying this amount to the hospital. I can do the same procedure for much less, but only if you're willing to pay me enough that I can make a small profit. I can't do it for what you're offering to pay.' I can usually get something added, or a carve-out, if I have the figures and it's going to save my insurance company money."

Other ways to control costs
When it comes to controlling costs, mesh may be the most obvious expense, but it's far from the only one. In addition to using the least-expensive suitable mesh, "we make sure we open very few instruments, no more than we need. And we don't open irrigation tubing and fluid unless it's needed," says another facility manager.

Preventing revisits should also be a high priority, says a hospital director: "Educating patients prior to the procedure on postoperative compliance" helps prevent readmissions and control costs.

At the Rocky Mountain Surgery Center, Ms. Teetzel came up with a novel solution to yet another financial challenge. Her surgeons said they preferred her facility to the local hospital, but they were concerned about post-operative pain and wanted to provide patients with costly pain pumps. "The pumps can really cut into the bottom line," says Ms. Teetzel. "Once you start taking that off of what some of the insurance companies are willing to pay us, we're not going to be making a profit." The solution? "We told the surgeons if they wanted to do the case here, they could purchase the pump themselves and have it delivered here." Not every surgeon was willing to do that, she says, but many were.

Even when everything else is lined up properly, efficiency in general has to be a big priority, says Ms. Rice: "Since ventral hernias are the most difficult to treat, keeping your physicians on time so that the staff dollars are utilized correctly is key. Down time in the OR can lead to a large money staff drain."

And if you're going to keep everybody else in the know, you've got to stay on top of things yourself, says a facility chief. "I keep abreast of the latest products by welcoming trials and in-servicing surgeons. And I read industry journals to remain current on new products and to stay aware of potential complications others in the market are experiencing."