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Why Containment Is so Crucial to the Success of an Ambulatory Surgery Center?

There are only two things you can do to increase your ASC’s profitability: Increase revenues or decrease expenses.
You can only do so many procedures in a day. Most people do not realize the enormous impact that cost reduction has on the bottom line. Assuming that your surgery center’s profit margin is 20%, each dollar saved is equivalent to $5 in revenue.

For example, it is common for an ASC cost reduction project to yield a
$100K/year savings. It would have taken $500K in new revenue to achieve the same
impact on the bottom line. In this example, $100K in annual savings would be equivalent
to $500K in new yearly revenue.

This is a $2.5M savings over the course of 5 years which can be used for capital equipment, software, raises, and bonuses.

Where Are Most of the Savings Found With ASCs?

80% of ASCs savings will come from medical/surgical supplies & pharmaceuticals

• Medical/Surgical supplies
• Pharmaceuticals
• Medical waste disposal
• Medical gases (oxygen, nitrogen, nitrous oxide, etc.)

What Are Some Common Challenges That ASCs Have Regarding Cost Containment?

Managing expenses is a labor-intensive and time-consuming process.

• Price creep. You may be getting a great price on that suture today, but a few weeks from today it could double
• Lack of extensive benchmarking data available to the ASCs uncertain if they are getting the best prices.

For more information about Ambulatory Surgery Centers Cost Containment, visit our resource hub.