Are staffing issues costing your ASC?
Staffing can make or break an ambulatory surgery center (ASC).
According to VMG Health’s 2017 Intellimarker ASC study, multi-specialty outpatient surgery facilities spend an average of 22 percent of their net operating revenue on employee salaries and wages. On an average ASC’s income statement, staffing costs make up the second biggest line item expense after drugs and medical supplies (24 percent). That’s higher than administrative costs (17 percent), occupancy costs (7 percent), and taxes and benefits (5 percent).
Here are important factors that will assist you in determining if staffing issues are affecting your center:
Appropriate work experience
Typically, ASCs can only hire local candidates for long-term positions. If hiring managers become anxious about filling a position, they may overlook critical skills gaps or hire an individual with only the baseline qualifications. This is a mistake. For example, hiring an unqualified administrator who doesn’t possess the right analytics experience may make it difficult to identify a center’s financial performance problems, address these underlying issues and achieve real costs savings.
All employees should have a working understanding of the ins and outs of their facility, its processes and how they can be improved. Administrators, in particular, should be fluent in all business office functions, such as benefits verification, patient financial responsibility, customer service and cost analysis. Inefficiency and cost overruns can be experienced when employees lack a full understanding of the operations, especially when the ASC is overstaffed.
In many cases, the difference between a surviving and thriving ASC comes down to staffing efficiency. Overstaffing a surgery center will negatively affect profitability in a hurry — especially as the cost of payroll-related benefits continues to rise. Instead of hiring more full-time employees, consider using flex staffing to meet hourly caseload needs. It’s also important to hire both full- and part-time employees when running a successful center.
Turnover and understaffing
Losing an employee is very expensive. According to the Society for Human Resource Management:
“The average cost-per-hire is $4,129, while the average time it takes to fill a given position is 42 days. In terms of employee retention, the average employee tenure is eight years, the annual turnover rate is 19 percent and the involuntary turnover rate is 8 percent.”
Turnover also can extend the revenue cycle, as claims may be submitted more slowly. When remaining staff are overwhelmed, claim rejection rates could rise. What’s more, having too few employees also can create inefficiencies, as AR days may increase, collecting from patients becomes more difficult, and ultimately, cash flow is slowed down.
Continuing employee education is essential but often overlooked in outpatient surgery. Business office staff must be up to date with the latest insurance verification requirements, how to calculate out-of-pocket costs, regulatory changes, facility contracts and customer service issues.
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