The Four Keys to Administrative Excellence for an Ambulatory Surgery Center
As America’s healthcare system continues to adapt to changes in treatment options and new regulatory standards, the ambulatory surgery center, or ASC, has become an increasingly popular option for people who need some form of surgical, diagnostic, or preventive procedure that can be done on an outpatient basis. With so much growth in this sector, it’s possible for some ASCs to show positive results even though they are operating inefficiently or below their capacity. For an ASC to reach its full potential, it needs a strong strategic foundation, efficient operations, and robust financial performance. While engaging in all three of these areas to maximize current results, successful ASCs also need to remain aware of growth opportunities that arise in the mergers and acquisitions (M&A) market. There are certainly many trends in healthcare that are driving growth in the ASC sector, but facilities that focus on these key drivers of success will always have an advantage over their competitors.
Strategies for ASC Success
All ASCs should have a comprehensive strategic plan that creates a future direction for the organization. A strategic plan will prioritize growth initiatives and clearly define how success will be measured. If communicated well, the plan will create alignment throughout the organization. It helps people at all levels of the organization understand what is important. Some important steps to creating a successful strategic plan include:
- Gathering information and input from individuals throughout the organization, including input from physicians and other clinical staff
- Conducting market research and a competitive analysis to help identify opportunities to develop new sites and services
- Performing an internal assessment to determine the facility, staffing, and equipment needs to support the future growth strategy
- Ensuring the plan includes clear, prioritized objectives along with metrics to measure progress
- Communicating the plan throughout the organization to create alignment
For new and existing ASCs alike, leaders need to have a strategic plan in place for short- and long-term growth and development. That plan needs to be reviewed and updated on a regular basis to make sure that the ASC is still working toward delivering the kinds of services that its community needs.
Ensuring Operational Excellence
Operational excellence is critical to achieving strategic goals. Better performing ASCs are organizations where referring physicians want to send their patients, where providers want to perform procedures, and where staff are friendly and are proud to work at the ASC. Ongoing efforts should include:
- Continuous quality improvement in the areas of provider credentialing and recredentialing, accreditation reviews, and patient outcomes
- Initiatives that result in high patient and referring physician satisfaction as well as high staff and provider engagement and satisfaction
- Efficient and timely patient access
- Efficient operating processes and patient flow from point-of-scheduling through discharge
Robust Financial Performance
Robust financial performance will support growth and the ASC’s strategic plan. It’s important to have a strong financial team that has expertise in patient accounting/revenue cycle, information technology, supply chain, and financing. ASCs should recruit and retain the following:
- A top-performing revenue cycle team who can deliver best practice metrics in the areas of scheduling, financial clearance, coding, billing, and collections
- Information technology staff who help select, install, and optimize health information, revenue cycle, credentialing, and quality software in addition to providing critical and reliable business intelligence to leadership
- Supply chain personnel who can negotiate the best arrangements for facilities, equipment, and medical supplies
Watching for M&A Opportunities
It pays to always keep an eye out for opportunities. M&A is a key driver of growth among ASCs, as successful practices become attractive acquisition targets for larger chains of facilities. Executives who run ASCs should always keep in mind that, with short notice, they could be called upon to plan either an acquisition or a sale. Here are some key areas to evaluate when it comes to ASC M&A activity:
- Make sure to thoroughly evaluate your strategic options. We continue to see significant activity among national ASC companies that are seeking to partner with independent physician owners. Many hospitals and health systems are exploring opportunities to expand their ASC presence, and we also see growing interest from private equity firms. When evaluating M&A options, it is important to ensure that the strategy works for your organization.
- When developing a partnership, it’s important to understand what the potential buyer is seeking. It’s equally important to understand the needs of your organization. Negotiating mutually agreeable deal terms is critical to a successful transaction. A successful deal should offer synergy to both the buyer and seller.
- Pre-deal advisory and due diligence will help optimize the value of your transaction. Pre-deal advisory will help identify and correct any barriers to a sale. Inadequate attention to issues during this phase of the deal could result in a reduced purchase price. Due diligence is an intensive process to identify any areas of potential risk during a transaction. It’s critical to identify past or current issues that may affect business performance in the future.
Finding Support for All of These Functions
Very few businesses can assemble a team that provides all four of these key functions right out of the box. Many ASCs look to outside consultants to help maintain excellence in these four disciplines throughout the lifespan of the business. KSM’s healthcare specialists have decades of experience working with ASCs, health systems, physician groups, and other companies to maximize efficiency and profit. To learn more about how we can help your ASC with strategic planning, efficiency analysis, financial management, or M&A, please contact your KSM advisor or complete this form.
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