Containment, Savings and Challenges of Ambulatory Surgery Center

May 21, 2020

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 &pharmaceuticalso

  • 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.

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