Houston is the 4^th largest city in the US and has direct flights to almost every one of our clients across the country.  With 5 long-term clients in Houston as well, it is just too much of a temptation not to take.

Please note our new address and phone numbers!

Good-bye Austin – it has been great!

Can you believe that 2012 is almost 25% over! It just started, for heaven’s sake! Myself, I’m still struggling with issues from 2011.

One of the great things I enjoy about writing this column is the wonderful feedback I get after each column. I received quite a bit of feedback from the January 2012 column on revamping surgery in the outpatient area. I think I hit a nerve. If you didn’t get a chance to read it, go back and grab your issue. I had comments from several hospital CEOs and owners of GI and pain centers, as well as staff members who work with them. They already are noticing the trend. For help in this area, read on.

Question: We are a GI center only, and while we have had some decline in the volume of cases over the past year and a half, we are financially struggling with volume that we used to flourish with. Our center is up for sale by our owners. How can that happen, and so quickly? We don’t see the “numbers” (as the docs call them), but we feel the void and the insecurity.

Answer: Surprisingly, with a number of single-specialty facilities at the tipping point (an event of a previously rare phenomenon becoming rapidly and dramatically more common), it comes on quickly with the decline in even a small reduction in cases being performed. The reason those decreased cases are so dramatic is that those last few hundred cases per year are the ones that generate the profit and lead to financial success.

Question: I have heard that there are opportunities for recruiting cash-paying patients from other countries to hospitals and even surgery centers in the United States. Is that true, and is that an option for our hospital?

Answer: Yes, and many hospitals and surgery centers are doing just that. You need to stand out, however, to be successful. You need to have a unique procedure that you perform, such as bariatric procedures, penile implants, cardiac, transplants, etc., to be attractive to international patient will to travel to the United States for surgery that is technically difficult or unavailable in their country. These patients want state-of-the-art facilities and first class service when they arrive. The vast majority of hospitals and surgery centers cannot live up to those standards.

Question: Our hospital has never laid off staff before. In the last few months, they have started aggressively reducing personnel. Is this just the beginning?

Answer: Unfortunately, it is just the beginning. I have spoken about and written about so often over the past few years the need for individual growth and achievement within your respective organization. You need to stand out in the crowd, or you will stand out with the crowd.

Question: Our surgery center has started “flexing” (rolling reduction in hours for staff) staff this year. We have never done this before, and it is demoralizing to us all and, quite honestly, scary. Have you heard of others doing this, or are we the only ones?

Answer: First, you and everyone reading this need to get out and interact with your peers, either online or through local and national conferences, so you will not feel so isolated. Yes, it is going on in many facilities, including hospital surgical departments, and it is everywhere. In a way, it is not such a bad thing, unless you need every one of those 40 hours per week. It allows the facility to reduce everyone’s hours just a bit during slow periods to avoid terminating staff.

While it is troublesome to all, it is better than a reduction in staff. I always tell “flexed staff” that this is the perfect time to take courses at your local college to perfect your skills and desirability to your employer. As nurses and techs, we have always been (or felt) we were a protected class. Not anymore. You need to look sharp and be sharp.

Question: Several of our surgeons have become employees of the hospital. I didn’t know that could even happen, but obviously it does. They no longer do late elective cases or seem to “bust our butts” on turnaround times and starting on time. It doesn’t seem like this is the way to be more productive. Is it just me?

Answer: No, not just you. We see it too. Hospitals’ physician employment jumped 32% from 2,000 previously to roughly 212,000 physicians in 2010, according to the AHA Hospital Statistics, 2012 Edition. That number means hospitals employ almost 20% of all physicians, notes a Hospitals & Health Networks Daily article. That trend is going to continue, and I predict that we will continue to see a reduction in productivity that you so accurately described.

So, with all the above going on, I have a motto on my web site and all of my e-mails that says: “Audentes Fortuna luvat.” (“Fortune favors the brave.”) Consider it.

The holidays finally are over, and most of us have nothing really important to do this month. OK, maybe four of you have something really important to do at work this month, but for the rest of us…

I’ve written and spoken for years about the need for hospitals and surgery centers to get together and find a common goal to work toward. Hospitals know that they are losing money on many of their outpatient cases. If they think they aren’t losing money, it is just because their antiquated accounting software doesn’t capture all their expenses, which deceives them into thinking they are doing well.

Conversely, most surgery center out there are overbuilt and have capacity (‘cept ours of course…) to do more cases. Furthermore, many surgery centers are doing procedures that should go back to the hospital since our backward-thinking method of reimbursement is driving them back into that model. Come on!

Chances are, if you are a GI-only surgery center, you probably are better off financing and doing these cases in your office, not in any facility-fee environment, and taking the high professional fee reimbursement rather than the minuscule facility reimbursement. Either do that, or push them back to the hospital and start recruiting new specialties and surgeons into your surgery center. Of course hospitals, even with their higher reimbursement, cannot make money on them either. So … what to do? What to do? With the exception of the above, you are sort of running out of options, huh? Don’t get so smug eye centers; you have a bull’s-eye on your back too!

So, this month each entity needs to establish dialog with each other. It is completely legal and aboveboard to do so. Many great minds in the insurance industry already are finding ways to ratchet down reimbursement further, so we (you!) need to start doing some planning as well.

Every single person reading this is experiencing accounting errors in their facility. This month, you need to reach out and grab an invoice and check the amount you are being charged by the vendors versus what you contracted. I have eased up on the vendor reps over the years because I am now convinced that overcharging or incorrect charging is not really their fault. They have to face us too often to pull that kind of stuff. I think it is just poor communications or keystroke errors on those at their home office doing the invoicing. Regardless, you still are overpaying! Do yourself, your facility, and your investors a favor and just audit 10 — no, 20 — invoices this month while you’re just hanging around. (Oh, hate mail is on the way!)

Another reaching out effort this month is to check your reimbursement per your agreed-upon contracts. We are all in that same sinking boat. Again, audit! Just check 20 claims from your top payers, and see where you are. Again, those facilities that are “right on” are in the minority!

Reach out for your employee files. It is guaranteed that many competencies and licenses are in need of updating.

Even if you sub out your credentialing, you are going to find some expired insurance coverage. It’s not all that big a deal now, but when someone else discovers them, or there is a problem and someone looks at them and finds out there is no coverage, it is going to be at the worst possible time. Again, do it now, and get it over with.

Just when you want to really fire someone, up jumps the regulations demanding more employee protections. That is all well and good, but you never signed on to be a babysitter or an employment agency. Put those issues behind you this month.

Lastly, book that trip to the islands! The weather is miserable, and the world probably will blow up this year anyway, so get your vacation in early. If you do believe the world is ending this year, put your vacation on your credit card!

By every standard, outpatient surgery is growing. The recession took a bite out of it, with many patients delaying elective surgery until they obtained new positions and health insurance. However, by and large, most facilities are seeing resurgence in cases again in the hospital outpatient departments (HOPDs) and freestanding centers.

Plastic surgery is booming, helping patients “groom” themselves for new jobs and an older workforce wanting to compete against their younger-appearing competition. It is working.

The split between inpatient and outpatient cases is widening as technology, treatment modalities, advances in anesthetic agents, and patients wanting to be home sooner grows. Most inpatient surgical cases in the acute care setting are patients who are spending only one night in the hospital for pain control or for surgeons insecure about sending them home the same day. It is clearly only a matter of time before these cases will become surgery center procedures only, with no HOPD reimbursement at all.

Many single specialty surgery centers are borderline underperforming. GI, ophthalmic, and pain centers are struggling as their reimbursement has significantly changed over the past several years. Intended as single specialty-only centers from inception, it has been difficult to retool these centers due to smaller operating rooms, lack of expansion space, and hoarding of ownership over the years, which meant not allowing new surgeons into the partnership. Eventually these cases will become office procedures only, with no facility reimbursement at all.

While the freestanding industry is seeing a 1.6% bump in Medicare facility fees and the hospital-based cases are seeing a 1.9% increase, it will not make a material difference to either in the long run. It is folly to expand hospital surgical environments to accommodate surgical cases that will not be profitable. With many underperforming surgery centers closing across the country and inexpensive operating rooms empty in others, it is time to revamp these services in a manner that works for all.

To most surgeons who work in a surgery center environment, the thought of taking cases back into the hospital system of perceived bureaucracy is abhorrent to them. For hospitals, trying to appease surgeons who are accustomed to 10-minute turnaround times and running their centers like a business, it is a “no-win” scenario for most hospital CEOs.

However, there is an obvious solution for the outpatient surgery industry: having hospitals absorb these closed surgery centers and buy out underperforming surgery centers with far less cash than would be needed to build hospital operating rooms.

Involving the surgeons to run these new off-site extensions of acute care hospitals is critical to the success of the ventures. While the surgeons would not be able to be investors in the sites, they still could be profitable by managing the centers in a similar fashion as they were accustomed to in the past.

With the budget changes and with healthcare costs out of control, the time is here to think out the current arrangement.

By Stephen W. Earnhart

We just opened our newest ambulatory surgery center (ASC) in Texas this week. We think it is our 206th, but we could be off on that number. While it is an ASC, there is some useful information for our hospital readers here. Please read on!
The center is a six-OR single-specialty center with an anticipated 8,000 cases in year one. We certainly will exceed that number in year two, as the total count for the physician investors current volume exceeds 15,000 cases in four area hospitals and two other surgery centers. There is no hospital investor. They were not invited by the docs.
While opening a new surgery center is not a big deal anymore, there are issues around this center that intrigued me. These issues offer lessons to other surgery centers, as well as surgeon offices and hospital outpatient departments, about how to achieve cost savings. Let’s start with obvious:

• Equipment.
We will have spent a little over $2 million on equipment and instrumentation at this site. We came in under budget by about $200,000 because the surgeons (seven different practices) all agreed to a common set of major equipment systems and agreed to change their instrumentation needs, which is not an easy accomplishment, as many of you know. There was a lot of compromise, and a lot of vendors were upset, but the result was a huge savings for the ASC.
I always wonder, in these terrible economic days, why hospitals don’t do the same. The money they could save by being firm on the systems they purchase and maintain would be enormous. Granted they would lose some surgeons that didn’t get what they wanted, but they probably would lose them anyway if that is the way they function.

• Staffing.
We did not want to anger the local hospitals and other surgery centers (they might read this!) where the surgeons operate by cherry picking their staffs, but we had several applicants from those institutions anyway. Most of the applicants were from the hospitals.
Since Earnhart & Associates is managing this center for a long time, we were as picky as the surgeons about whom we hired. We wanted hungry staff! Of the 25 FTE positions we hired, only two or three came from the hospitals. The majority of the staff are new RNs and a few experienced scrub techs.
Most of the hospital staff members that applied did not want to be cross-trained (a requirement), wanted a full retirement plan year one (come on — it is a new center!), wanted the current salary they had at the hospitals where they had been for 15 years plus (and a bump even to that!), and they wanted facility-paid health insurance for entire family, not just the employee-paid. In other words, they wanted status quo and no risk. The surgeons gave us a clear understanding that they would much rather train new, energetic staff who were interested in growing their careers rather than staff that were at the end of their careers and had no interest in making the new center a success.
This information is a lesson to some: Often we have to take a chance when we are making change in employers. The new staff at the surgery center has no call, no emergency cases, no weekends, generally healthy patients, and no big hospital hassle. Often tradeoffs must occur!

• Physical building.
Due to size of the new center, we had to buy a building, tear it down, and start from scratch. Again, in these economically interesting times, you would think that cities would embrace a new tax source. Oh, no. They put up as many roadblocks as possible. Again, some people just do not get it. In spite of the city and the length of time it took to get permits, we still came in under budget on the building and opened two weeks early.
We were able to do our first case 12 days after our certificate of occupancy, which meant we beat our old record of 18 days. Thus, the city will get its revenue regardless.

• Vendors.
I know that I am usually hard on vendors in my column, but I have to hand it to these ladies and gentlemen: They really helped us obtain the best pricing, and they gave us outstanding service! I asked one of the reps why he was going out of his way to help us stay in our budget, and he told me it was because we were trying to be budget-conscious! That was cool.

• First patients.
Anesthesia cancelled our very first case. Medically necessary. A bummer for some, but I was delighted! We were setting the marker that patient safety was a huge issue for us.
Our second patient — well, really our first real patient — was 45 minutes late. Of course. That was even with the two pre-op calls and directions. He finally showed up, and his “responsible adult” took off as soon as the patient walked in the door. That was fun getting his ride home to come back to the center. The patient did, however, get into the operating room 4 minutes early (yes – I track that), had general anesthesia, and was discharged an hour later. So in spite of everything, the system still works.

Once again it proved to me why I love my job so much! Nice job by everyone.

By: Stephen W. Earnhart

Seemingly, no one is happy with his or her block schedule at the hospital or the surgery center. After spending too much time on this issue with our own centers and hearing about others concerns, it is, quite honestly, irritating that such a simple process can be such a conundrum for most everyone.

In its simplest application, block booking is merely a reservation. Like any fine restaurant, you want to make sure your valued customers have a table (in this case, an operating room) available to them when they arrive.

There are some surgeons who are abusing the system by not utilizing this free service, and there are some surgical services personnel not following their own guidelines. Blocking posting of cases works! However, you must adhere to established parameters to make it fair and rewarding for all.

No one hates memorandums more than I do. Why write it when you can say it? However, there are times when you need to circulate the same message to all at the same time. Everyone’s policies and procedures on block time are different (though I don’t know why — heavy sigh). You need to refresh them, share them, and then, most importantly, stick with them. This complaint is one of the most common ones I hear from surgeons. Make it go away!

Consider these other top irritants for surgeons:

• Rude staff members.

As incredible as it sounds, this issue is a significant one with surgeons, and, according to the surgeons, it is getting worse! I have read in recent articles that customer service in general is declining, but in healthcare! Apparently so. While there are effective measures you can take to eliminate rude staff members, most are illegal.

One method that does seem to work is to get the name(s) of staff members from the surgeons that (they feel) are rude and confront the individual. I’ve done it several times this month. Each time the staff member is surprised, not defensive. While it doesn’t seem like it is a personal issue toward the surgeon, it is perceived to be. Making the individuals aware of the matter seems to help a great deal.

• Preference cards.

Really? The majority of “operational and process audits” we do for hospitals and surgery centers always reveal problems in this area. Almost all surgeons interviewed have a problem with this area. (No, not your center.) They claim that they are not asked to sit down and review their cards and that when they change their preference for a case, it is not noted for the next case. There is, surprisingly, a strong resentment toward facilities not paying attention to this rather basic management tool.

• Missing instruments.

You cannot blame the surgeons for being upset when they stick their hand out and ask for something that should be in their tray and it is not there. Avoid telling them that you did not pick their case or that someone forgot. Consider instead telling them it was stolen by parties unknown and the new one just arrived. Seriously, this problem, according to surgeons, has become a significant area of irritation.

• Staff hanging around (while they are waiting to start their case).

I do have empathy for the surgeons. They are impatiently waiting for their case to get started or getting the patient in the room at least, and they see “crowds” of staff just hanging around. Again, this issue is one that is growing for them. Sometimes “out of sight” is a better place to meet.

• Turnaround time.

Whether any of us like it or not, turnaround time to the surgeon is from the time they leave the room until the time their next patient enters. It’s not fair, but perception is reality. I have documented turnaround time (their example) of 25 minutes and then asked the surgeon how long it was. Their answer: 45 minutes, they say with conviction. Not an easy fix by any standard. We might have to punt on this issue.

Best recourse is, once again, to let everyone know the definition of turnover time. Post the results in the lounge, or distribute them to the surgeons.

• Delayed start times.

Enough said.

By Stephen W. Earnhart

CMS is now proposing to implement a quality reporting system under which data collection would begin in 2012.  For the first two years, ASCs would not be financially penalized for failure to report quality information.  However, beginning in 2014, CMS would begin reducing Medicare payments to ASCs that fail to report data on specified quality measures.

CMS proposes eight measures for the initial reporting period:

• Patient Burn
• Patient Fall in the ASC
• Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant
• Hospital Transfer/Admission
• Prophylactic IV Antibiotic Timing
• Appropriate Surgical Site Hair Removal
• Selection of Prophylactic Antibiotic (first or second generation cephalosporin)
• Surgical Site Infection Rate

By: Stephen W. Earnhart

The most frequent request we handle is developing a surgery center.  The mistake that may people make is hiring a surgery center company to do this for them.  Unless you want a company to own part of your surgery center and manage it forever, your best option is to hire a consultant to do this for you.  Unlike a surgery center company, a consultant such as Earnhart & Associates, will get the job done for you quickly because most ASC development projects on a flat fee, and will leave when you tell them to go.  With a surgery center company that owns part of your surgery center, you are typically locked into a contract with them that can last for decades. This is either for a physician group, a hospital, or both.  Developing a surgery center is a long and labor intensive process requiring over 1,100 individual forms and 1,700 man-hours of effort!  The typical development process can take between four to eighteen months to completion and involves activities as varied as creating legal partnerships, hiring staff  and  marketing the new facility. By hiring a surgery center consultant – not an owner – you stay with the same person that you start with, not rotating staff members that can quickly lose sight of your goal.

There is no magic about the development of a surgery center. But it does require a strong ability to identify, analyze and solve problems, meticulous attention to detail and a through understanding of all aspects of the legal, technical and management areas of building a facility. There are virtually hundreds of steps involved and many issues that will arise along the way. Can you do it yourself? Certainly! The question is, how much time can you afford to devote to a project that will consume your energy, stretch your administrative capabilities and still continue to manage your healthcare business?

When we say we provide a “turnkey project,” we mean just that. After a detailed feasibility study we manage every step of the project beginning with creating a legal structure and ensuring financing.  We take care of virtually every detail from recommending architectural firms to medical staff by-laws. At the end of the project, you have a Medicare Certified ASC that is designed to be cost efficient, properly staffed, and meets the needs of your community and users.

Even with all that in a new facility with all new staff – we actually got the patient into the operating room 4 minutes early!  The patient was discharged after 40 minutes in PACU after his general anesthesia.

Really proud of the staff!  Six more patients to go today and 35 more to go this week.  Next week we get serious with cases.

Thought you would want to know.