Benchmarking Builds a Stronger Center

Benchmarking Builds a Stronger Center

Benchmarking is becoming increasingly important in the competitive ambulatory surgery center (ASC) marketplace. “Benchmarking information is an incredibly valuable and powerful tool when the right information is used in the right way,” according to Chad E. Coben, president of InforMed Healthcare Media. “It can help identify areas for improvement and enable owners and operators of ASCs to implement change that can result in improved financial performance now and in the future.”

Successful use of the data, however, is predicated on quality data, used in the right way.

Coben explains that there are different kinds of benchmark data and a variety of approaches to acquiring that data. Before a center participates in any benchmarking study, it is important to understand what data is contributed, how the information is compiled, what demographics will be investigated, and what is reported back. “It is also important to know whether you are responsible for the analysis and restating your data or if the research company does that work for you,” he points out.

Quality benchmarking information is dependent on the quality of the input. The more accurate the information that is contributed to the study, the more useful is the information that comes out of the research. By understanding what is being contributed, one may anticipate what data will come out of the research and how it might be useful in managing your business going forward.

“ASCs need to actively manage their businesses more than ever before in order to maintain the same levels of profitability,” Coben points out. “With the impending changes in Medicare reimbursements, it is becoming increasingly important to actively manage the business operations of ASCs to ensure continued success.”

Consistently reviewing internal financial and operating reports is a critical process in understanding operating performance. Reviewing information from a single reporting period is a necessary step in getting a picture of an ASC’s level of performance. Evaluating the information period to period is also helpful in understanding trends and getting a clearer view of how the business is performing. The picture, however, is not complete without putting it into the context of how it performs in comparison to other ASCs.

Understanding relative performance helps provide clarity on the business as a whole and enables ASCs to ensure that they can identify and implement best practices. By comparing the performance of one center to another, using actual detailed financial and operating benchmarking data, provides valuable insight into the performance and enables management to make educated decisions about enhancing the business’ performance.

InforMed has released several benchmarking studies which aggregate actual financial and operating performance information on ASCs around the country. The Intellimarker reports contain financial and operational benchmarking metrics, comparable performance data and other information related to the economics of an ASC. The information is presented on a comparable basis, broken down regionally, by facility size in terms of number of operating rooms, annual case volume, annual net revenue, etc.

The financial data is comprehensive and covers all relevant financial metrics — including payor mix, case volume, gross charges and net revenue per case, detailed operating expenses, staffing statistics … including hours worked per case and wages by employee type, accounts receivable aging, working capital, fixed assets, and a host of other critical operating metrics.

Coben says the variation in performance across ASCs is pronounced in the Informed data. “Because the industry is comprised of thousands of independent partnerships, the way in which things are done and the resulting financial performance varies widely,” he clarifies, adding, “There are still significant opportunities to improve the performance in many of these facilities.”

InforMed offers additional services to ASCs to aid in benchmarking through its customized analyses that provide clients their information alongside the detailed industry benchmarks for comparable facilities. “This customized report, provides them with all of the data that they need to identify issue areas and opportunities for improvement,” Coben says.

Building Lasting Relationships

“The relationship between a corporate manager/minority equity partner and the physician owners is critical to the success of a joint venture ASC. In the beginning phase Specialty Health Partners spends a great deal of time discussing strategies, choosing the right equipment, and discussing the needs and requirements of each partner.

It is equally important to maintain that positive relationship once the center is up and operational. We make a point of meeting with each physician partner on a regular basis to get his/her opinions and suggestions on how things are going and ask what we can do to make his/her experience at the center a better one. Small problems regarding staff, scheduling or equipment can be addressed in a timely matter and do not become big problems later on.

Keeping everyone involved and informed is one of the keys to a successful partnership.” 
— James Chamberlin, president, Specialty Health Partners

Benchmarking Made Easy

Every ASC should rely on clinical and on financial benchmarking comparisons to guide their performance improvement. Integrity of the benchmarking information and the ease of submitting the data are the two most critical factors in choosing a benchmark survey. AAASC for example, offers its members free Web-based clinical benchmarking surveys with a free Web-based report for participants. Our financial survey partnership with InforMed Healthcare Media relies on actual ASC financials (not a survey) to make participation easy and to improve the accuracy of the reported information.”
— Craig Jeffries, executive director, AAASC