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By Stephen W. Earnhart, MS
President & CEO
Earnhart & Associates, Dallas
The fact that you need to control the expenses of your department or ambulatory surgery center is understood. It is a requirement of the job. Anyone can understand the simple reality of "money in/money out," and keep the difference. It works in every business from the local gas station to the Kinko’s store at the end of the street. Our situation is different because the decisions made on where costs are controlled could lead to a life-and-death situation or compromise patient safety.
There are many ways we can cut costs in this industry. We could stop the laborious task of sterilizing everything, and just put all patients on antibiotics. That would be cheaper, but obviously we can’t do that. We could save on staffing by eliminating the pre-op assessments — create a situation of "see who goes south and who doesn’t." But that doesn’t fit with our mission statement does it? So, while we can control our cost, we need to recognize the fact that due to the nature of our unique business line, we have to do so judiciously.
Controlling cost is incredibly easy. Identifying what costs to control takes more effort. Reducing expenses that do not compromise quality of care and patient safety — ahhh, now here is where we separate ourselves from the local Kinko’s! We have all read articles about cutting costs here and there, researching the effects of such maneuvers, and gauging implications. Maintaining cost at our facilities should be a state of mind. How many staff members in your facility care, I mean really care, about your expenses? Very few, I can assure you. That is where the true opportunity lies in controlling expense.
If I am responsible for ordering supplies for the center, then I and only I, truly understand where it can be more efficient, effective, and, therefore, more cost-conscious. As your circulating nurse, only I can tell you where waste exists and where it doesn’t. Only someone who works at the front desk can really tell you how to control costs at the front desk. Anesthesia consumes up to $100 per case in some facilities and less than $35 in others. Why? State of mind! They are either thinking of controlling the costs or they are not. No one but anesthesia personnel can tell you where you can reduce spending in anesthesia. See where I’m going with this?
So, using these examples, odds are very high that these people couldn’t care less what your expenses are. They have a job to do. They do it well and then go home to dinner. End of story. Absolutely nothing is wrong with that! They should not even be criticized for their attitude. They have done their job. While we all get fancy-smancy and say, "Cost control is everyone’s job," it really isn’t. It is your job to make it their job! It will not happen in a vacuum or without effort. Since you are reading this newsletter and column, chances are high that cost control is part of your responsibility. Therefore, a piece of your job is to get the feedback from these people and make it part of their job.
How do you do it? You have to focus everyone on controlling costs by making it first in their minds. You need to label everything in the facility with its unit cost. If someone sees the cost of something before they take it, you are opening a window in their mind to think "Wow! I didn’t know that was that expensive. I better see if there is an alternative." It is the same concept in food stores. If there were no prices on food items and whatever your chose from the shelves was automatically billed to your credit card each month — imagine what your food bill would be!
Price controls spending. How can you control cost without knowing the cost to begin with? Make alternative, less expensive options available to physicians as well as staff, side by side on the shelves. Let them see that product "A" is more expensive than product "B." Isn’t that the way we shop at stores?
Stop preaching and whining about controlling cost, and start asking for help. When was the last time you called your receptionist into your office and, one-on-one, writing pad on your lap, pen poised in the air, asked, "How can we control expenses at the front desk?" If you want to turn someone around to your way of thinking, ask him or her for help. Do you really know the cost of the chemicals your cleaning crew is using, and is there a cheaper one available? Have you ever asked for its advice? Anesthesia staff — you gotta love anesthesia — they can be your best friend or worst enemy in the operating room. They will work with you to achieve your goals if you ask them for help. They are professionals, but also human. We all want to know that our opinions are valuable, sought out, and respected.
Get your staff thinking about controlling costs and giving you ideas on how to achieve your goal. By the way, what is your goal? Is it posted? Is it discussed at staff meetings? Make your efforts to control costs more than just a goal; make it a state of mind in your staff.
[Earnhart & Associates is an ambulatory surgery consulting firm specializing in all aspects of surgery center development and management. Earnhart can be reached at 5905 Tree Shadow Place, Suite 1200, Dallas, TX 75252. E-mail: email@example.com. Web: www.earnhart.com.]