Improving ASC Profitability: How to Measure What Matters [Webinar Transcription]

December 14th, 2023

Porter Jones: As we look at this and going back to this financial pressure that we're seeing, there's two things that we need to look at. We need to be more profitable, we need to be more efficient, but at the same time, we need to maintain patient outcomes. Again, we can volume our way out, out of that. We can have the physicians work 18 hours a day. But there's another way to look at this, and it's really looking at the cost and efficiency of the care that's being provided. In the healthcare industry, as we know, there is a lot of waste because a lot of that just is not tracked. It's human nature. If it's not tracked, you're going to see a lot of waste. So, going into the next panel, this is what we think is really important in regards to measuring what matters within your facility.

Porter Jones: This goes all the way from financial, operational, to quality and outcomes. Items like new patient volume, overall patient volume. But then really getting into the nitty gritty of the cost per procedure, not the general cost of what it is to perform all of your shoulder surgeries or all of your hip and knee surgeries on a yearly basis. But what does that look like on a per- procedure basis, and even a per-physician basis? Looking at operational metrics like OR time, how long is it taking to perform that surgery? On-time first starts, discharge disposition, et cetera. And then looking at how quality and outcomes are being affected by the adjustments on the financial and operational side, or vice versa, how is focusing on quality and outcomes actually affecting your financial and operational ---how it's affecting your balance sheet. So looking at 30-day readmissions, complications, tracking prompts, et cetera.

Porter Jones: And then not only tracking these, but how do you then compare to everybody else across the nation? It's great to know how you're doing, but you don't know what you don't know, and you may think you're doing wonderful. And the person right down the street is 50% more efficient, both on cost and operational outcomes. 50% better in quality and outcomes. So those need to be tracked and benchmarked to the other facilities throughout the country. So to give an idea, this is a simple balance sheet. Most organizations have a very detailed profit and loss statement. They look at the revenue. Where is that coming in from? What sources of revenue are driving the top line revenue? And probably more importantly, the very unique details of the cost, not just overall cost for the center. These are our total cost for supplies, total cost for personnel, but really looking at very detailed data because this allows you to make the tweaks, allows you to change operations within your facility, knowing what those costs are.

Porter Jones: Some principle sources of cost variations that we see. Again, we're looking at items like supplies. So what are the cost of implants? How much are we paying for the surgical time? How much time are you spending in the or pain management? When is physical therapy initiated? Which prolongs the discharge from your facility of that patient? What is the discharge disposition and then prices overall of the usage of other materials. So to give a quick idea, and then I'd love Jason's thoughts here. This is a summary view of what type of data we think that every facility should be looking at. We don't really care where you get it, we just think you should get it. And you should have a reporting mechanism of how to track this and utilize this information in a manner that allows you to alter or improve operations within your facility.

Porter Jones: So as you can see, we've subdivided these by DRGs. These are some spine procedures. Jason, I'm sorry, it might be out of your wheelhouse right now. But as you can see, we're looking at some basic going from left to right, basic overall volume. But what is now important is, this is the overall cost to provide that procedure. So the cost to you. So this $23,000 includes two things. One is your personnel cost. We track that, or anybody can track this through TDABC (time-driven activity based costing) which was coined by Bob Kaplan and Michael Porter at the Harvard Business School. And it is really a function of the amount that the facility pays to the surgeon, the nurse, the techs, on a per-minute basis. So obviously the more touch points you have with the patient, the more time is being spent and the more the facility is paying directly to care for that patient.

Porter Jones: And then the other is the supply cost. How much is being spent on supplies for that particular procedure? Now, altering the supply cost can come in two different ways. We're going to discuss it. It can be through renegotiation of prices. And I think what Jason is more familiar with and is going to touch on, it is the actual utilization and trying to standardize what is utilized in regard to supplies across the clinical staff so that we have the optimal cost structure when providing. And then looking here, we give and provide and have the ability to look at benchmarks. So this facility may have thought 23,000, we've already decreased it from 30,000. We're doing great. Well, actually the average is 20,000 across the nation and the 90th percentile is providing this same procedure when looking at personnel and supply costs for $17,000. So obviously a lot of room for improvement. Jason, I wanted to give you some time to speak. I know you are very focused on individual case costs and what that implies. And I'd, I'd like to hear from you and how that changes the way that you operate and function within the settings that you're caring for patients.

Jason Simon: Oh, thanks Porter. I think, the first thing is when you look at the slide that you're presenting right now, this gives a lot of information. And when you said that, I'm not very familiar with the spine world, which is true. But when you look at your green highlighted line with the single level fusions, there were 103 cases done for the 365 day total. And when you're looking at the hospital cost of 24,000 versus the 90th percentile cost at 17,531. If we do quick backup envelope math and call that a $5,000 difference, that's $500,000 that this institution can save if they can get themselves down to the 90th percentile. So with one procedure over the course of a year, that's a half million dollars in savings with only changing whatever is contributing to the $23,832. Now, if there were only a company that had a way to look at this data and break this down so we could see what each one of these things what's contributing to it? What our cost drivers are for this 24,000 hopefully that was a good segue for you.

Porter Jones: Yeah, and I think Jason, I think that's a good point. So here we take it from your direct costs. And I think we need to highlight, we're pulling out all administrative costs. I don't know, Jason, in your department, if you care much, what is being thrown on your balance sheet in regards to shared costs for magnet certifications? JCO certifications? Not a lot you can do as a physician to alter that, but what you can do is you can change your personnel costs and you can also change your supply costs. And as we know, our direct costs we're then able to calculate our direct contribution margin. But not only as a department, but we now want to be able to look at it on a per-physician basis. Because Now we start being able to see the variability within the same department, the same institution, but on a per-physician basis. We want to be able to track what is one physician that is more profitable doing that the others are not doing.

Porter Jones: And that could be based on process metrics, or it could even just be based on supply utilization. And even taking it one step further, now we can really look at just the direct costs on a per-physician basis. So you can see supply costs and you can also see the personnel costs and have a comparison, one to another within the clinical staff. Jason, I know you have worked a lot with this, and I'm curious as how do the physicians within the department, your colleagues react when they see data like this, comparatively speaking, comparing one to another and knowing how they're comparing it on a cost basis. Does that cause a problem? Is it a good problem? How do you guys handle that?

Jason Simon: Well, it's fascinating because a lot of us don't follow any of this data and we're not aware that it exists. So since, as you had mentioned earlier, you don't know what you don't know. Physicians notoriously overestimate the cost of low price items and underestimate the cost of high price items. And we don't know where the finances lie in any of this. We go to work, we do our surgery, and we move on with our day. So when you present data like this, which we've done at grand rounds, and we've met with individual surgeons, everybody wants to know why their numbers are different. And then as soon as you start to break down these columns and you look at the supply cost of the personnel cost, and you're suddenly looking at items that are open on your table with every surgery or the cost of an implant that you're using, it suddenly becomes very real as to how is surgeon A, why are their surgeries so much less expensive than mine and why a surgeon C is so much cheaper than mine?

Jason Simon: And then you start to go through all these items and you can quickly figure out where the discrepancies are. And some of these discrepancies are as simple as having an implant opened on your table. Or a shaver opened on your table that you had no idea was getting opened every single case. Or an extra pair of gloves or silly little things like that. That over the course of all of these procedures very quickly adds up. So there, once you see in the breakdown of the cost you become very interested very quickly and what you can do to change any of this and what's in our control.

Porter Jones: That's great. Appreciate that. I wanted to take a closer look into the supply cost and personnel costs. And what those actually mean and how we can attack those to be more profitable? So when we're looking at, one thing that's interesting about the personnel cost. So we see someone here at $3,800 and we see someone here at $2,600 for the exact same procedure on average. I don't know if we care so much what the actual dollar value is, but Jason, what we're seeing is knowing that it's a function of time. If this surgeon is spending $3,800 on average for all in personnel costs and this surgeon is spending $2,600, we know there's a large time discrepancy. So you can start digging in and understanding. There must be operational inefficiencies with one surgeon or even one department within a system that we're not seeing with others.

Porter Jones: So that allows us to start looking at, okay, so what is the pre-op personnel cost? The surgery personnel cost? If the surgery personnel cost, for example, is $1100 in this more detailed view compared to $545, that means this surgeon is just spending a lot more time for this same procedure in the O.R. It gives us a view into what those operations are doing and what is occurring. Same thing right here. If we're looking at $2,000 for post-op personnel costs compared to $1,000, the dollar value may be more arbitrary, but what we're really seeing here is length of stay. This surgeon on average just has patients that are staying pretty much double or twice the amount of time as the other surgeon within that department. So understanding the personnel cost allows us to begin to dig in to the operational metrics of what's going on.

Porter Jones: And again, we want parody amongst the clinical staff. We want everybody to be on par doing the same things following the same protocols. And that's when we really find that outcomes increase. But at the same time, we have a drop in overall cost. So this is just a quick example O.R time comparing clinical staff one to another, wheels into incision, incision to closure, and then closure to wheels out. We're seeing the difference again with the same DRG, same procedure between the clinical staff. All the while I will note these dotted lines are the national benchmarks. So where should we be? This department is doing quite a bit better or on average doing better than the national average, but is well below the 90th percentile. So they should feel good about themselves, but at the other side, there is still some room to improve.

Porter Jones: Jason, this is where I'd really love you to dig in. So this is a great example as we move on from personnel costing to supply costing. This is rotator cuff. You're very familiar with these, you've done thousands of them in your career. And it's interesting, it's a relatively straightforward and standardized procedure. But at the same time, we are seeing drastic cost variation from one physician to the next. I mean, we're looking at $2,400 for one physician, the average is $1,300. So there could be two issues here. Could be just simply supply utilization, what is actually being used for the same procedure. And it could also be when you want to compare it to national averages, poor negotiating, you could just be paying a lot more than what the rest of the country is. So I know you've done a lot of research in this Jason, and would love to hear your thoughts in regards to why we have variability and how we can actually focus down or drill down to decrease that variability to decrease the overall cost.

Jason Simon: So it's interesting because when you look at rotator cuffs in particular, one of the largest cost drivers, which has been demonstrated across a number of studies is the number of anchors. So the anchor or the way the surgery is performed is by putting implants in. So when you look at the right of the screen in orange, you can see the suture anchor is the orange, it's the third from the top. And when you look at this entire slide, the biggest variation that it looks like we're seeing is in the orange, which means that this is all implant-related. So then the next question you have to ask, is this because there are a number of implants going in, or is it the cost of the implants? Because both of those would contribute to this, be the numbers that we're seeing.

Jason Simon: So you can have somebody who is putting in two anchors for every rotator cuff and they are very expensive anchors. Or you can have somebody like this middle column with the 13 cases where perhaps they are using relatively inexpensive anchors, but they happen to be doing very large tears that requires a larger number of anchors. So the two questions that you would have here are, number one, what is the cost of the implants that they're using? And number two, are these all, are we comparing apples to apples? Are these the same types of rotator cuff repairs that are being performed? Or is every single one of these two anchor rotator cuff? Or is there a significant variability in the number of anchors that are going in?

Porter Jones: Alright, so Jason, now we're looking at, we're starting to go down the road of technique, number of anchors, et cetera. I get it. There's anatomical variability from case to case. But I also have seen and heard you say that some surgeons just use more anchors or use a more expensive anchor set. How do you deal with that internally with your colleagues to standardize things? If the goal is to overly create a consensus statement on what should be used, how it should be used, when it should be used to decrease the overall cost. How are you doing that on a day-to-day?

Jason Simon: So we've looked at this from a number of different lenses. So first we looked at, it was interesting because we actually looked specifically at rotator cuff anchors a few years ago, and we looked at the different techniques. So to get rid of the variability of the number of anchors per surgeon, we took the same type of rotator cuff repair and specifically looked at rotator cuffs that used four anchors. What was the cost and what was the variability? And the anchor cost was the big driver. So when you look at the cost of the implants, and at this point in 2023, most of the anchors perform pretty well along the same lines. So there's not one anchor that is the top of the line anchor and the next anchor is horrible. They have the same performance record.

Jason Simon: So if we can decide that anchors are all performing about the same, and you get everybody on the same page about the anchors that people want to use, the easiest way to get everybody aligned is to bring in a few anchors. You have everybody trial them and nothing drives cost like competition. So if you bring in three anchor companies and say, we're going to do a trial with your anchor for two weeks. And you have everybody in your O.R. use those anchors, and then that the next two weeks you use a different set of anchors and you don't take the other ones off the shelf in the meantime because clearly, patient comes first. So if there is an issue with an anchor that we're using, you need to have something that everybody is familiar with for a bailout. But once you level the playing field and everybody tries the anchors, then you can go back to these companies and say, Hey, you know something, everybody loved this anchor.

Jason Simon: Here's where your price is compared to everybody else. What can you do for us? We will shift X number of volume over to you. Where can we play with the prices? What can we do? And when you have everybody on the same page, so it's not one surgeon asking for a particular anchor, you have the 10 surgeons at your ambulatory surgery center or the 20 surgeons across your institution or the 50 surgeons across your entire system, then suddenly there's a lot more power in numbers and you can drive contracts down to get these prices lower.

Porter Jones: Yeah, that's a great example and I appreciate you sharing. Obviously this is a stepwise process. We're looking at technique. We're looking at standardization of what we're going to use, changing a bit of the surgeon's practice per se with a consensus statement involved. There are also some easier ways of looking at supply efficiency in regards to cost. And you had mentioned when we spoke a bit some time ago about a certain product that was in every surgical pack that you realize nobody was using. And this is a really easy win. So, some are a little bit more difficult, may have a much higher delta in regard to the cost that you're going to achieve within your ASC or within the hospital department. And some are quite easy and it just takes the data to point those out. And I believe you used the data to note how much was being spent on this product and that nobody was using it. Do you mind sharing that?

Jason Simon: Oh, absolutely. So with standardization, there are lots of peel packs and kits that get opened in every surgery center. So when you book your case and you book your standard shoulder arthroscopy kit, the package gets opened on the table and they have all of these implants and instruments set up on the back table for you. And one day we were looking at them and there was this little blue cannula that was sitting there or little gray cannula that was sitting there that I have never used. And it was opened on every single table that I've been for every surgery that I do. And I asked, who's opening it and why? And the answer was, oh, it comes in the kit. So one of the things that we looked at, which was helpful with Avant Garde is what happened. And the answer was that at some point somebody liked that cannula.

Jason Simon: It's a very small cannula that has very little utility, but it ended up in every single one of our standard shoulder arthroscopy sets. And I'll make up a number, I don't remember what it was, but let's pretend that that cannula cost $53. So every single shoulder arthroscopy kit that was being opened via a simple decompression or a massive birth inter cup repair or a labor repair or anything that you could possibly come up with, that canula was getting opened on every single table. And I asked a number of my colleagues, did anybody use it? And the overwhelming answer was no. So we had a $53 cannula that was being opened in every single kit that nobody was using, which goes directly against our cost for this procedure. And it was waste, it was just pure waste. So when you take something like that and you recognize it, and part of it was going through the data with Avant Garde, you look at it, that cannulas is on every single shoulder set. So you take that cannula out and you put it as a peel pack for whomever wants it, and suddenly you just decreased the cost of every single shoulder scope by $53. And all that took was just recognizing one item that was sitting there that nobody was using.

Porter Jones: So I think these are two great examples of a more complex but much larger delta in regards to cost savings of looking at a certain procedure and then one utilizing data to just see something a little bit smaller. I'm guessing that really didn't affect any of the surgeon's practice or lives when you decided to pull that cannula out, saved, saved the department 53 bucks per surgery, no one, no one knew the difference.

Jason Simon: You're absolutely right. And those examples, abound. I mean, it's amazing when you stop and take a look. And, and one of the problems with medicine in every industry for that matter is that this is the way we've always done it. And nobody changes. Nobody innovates. Nobody thinks. Nobody like you open a pill pack and you just move on with your day. And there are so many studies and so many things that look at the abundance of waste that we have in the O.R. And a lot of these things, you won't miss ones, they're gone. You just have to identify that they're there in the first place. And we can talk about this later in this call or we can talk about it now, but even the number of instruments that are open in every tray contributes to waste.

Jason Simon: And that has such a trickle down for so many levels with all of the extra instruments that are being opened. And the hand surgeons, for instance, have really paired down what they use for their kits because they don't need the majority of what is put in every single hand kit for a simple carpal tunnel or a trigger figure. And by decreasing what's in their set, you cut cleaning costs, you cut room turnover, you cut waste, you get rid of all of the garbage that's produced, all of the blue wraps and the plastic and everything gets thrown away during the case. And you can create a very small kit, which will drive the cost down for these procedures and also increase the efficiency for that surgeon.

Porter Jones: No, that's right. And I think just returning to the beginning of this discussion, it's just still so interesting that in every industry across the United States, every company to the penny, how much is spent on pens, paperclips, waste? I mean, there is nothing that doesn't go accounted for. And for some reason in healthcare, we just have not spent enough time gathering and looking at the data to actually understand what is the cost, where is the waste, and how can we be more efficient? And in every other industry, this has been what's being done for the last 50 or 60 years. We are behind, but it's great to have individuals like you, Jason, that are looking at this, utilizing data to change what is going on within the department and help educate fellow clinical fellow surgeons.

Porter Jones: We wanted to get in and for the sake of just showing what some of the impact can be. This is a case study that was run. There was a hospital that was actively complaining. Jason, this was not yours but was actively complaining when they looked at their all in cost hip arthroplasty. Excuse me, it's written right up there. But they were so much higher than the national average. They had just done anything and everything they could do to decrease the waste to create consensus statements on what was used within the O.R. And they could just not get down to that 90th percentile. They didn't know where to go. So what they wanted to do was a price comparison from the entire United States of what was the best pricing per implant and compare that to what they were spending.

Porter Jones: So they quickly saw that for one of their implants, they were spending for the entire construct about $5,000, yet the best pricing across the country was around $3,000. And extrapolating that out to all of the volume that they had, about a $2 million savings. So you can see the savings, the idea was not let's force everybody to use one vendor or another. Let's try to get the best pricing possible, try to get that as consistent as possible. Then the physicians are able to still use what they want. We're not telling them you've got to change vendors, but they're then able to see the savings. And I don't know Jason, I always worry. There's a story Toby Cosgrove tells that when they consolidated their vendor relationships. They force functioned the use of this smaller catalog of implants. And I'm curious your thought on that. Which way would you rather go be forced to change vendors or be utilizing just a different price structure that could be negotiated at a hospital level?

Jason Simon: So I think there are certainly advantages to both. When you have a number of vendors coming into the hospital, there are a number of additional layers of complexity that get added. So you have more trays, you have more implants, you have more stock you need to keep, you have more items that the staff need to understand how to use. So it creates multiple layers of complexity for the hospital, the staff, the surgeons, the team. When you're using multiple vendors. However, like you said there is certainly a huge advantage to looking at numbers like this and going back and saying, Hey, what can you do with the pricing? This is how many surgeries we do per year and we know that a different hospital is paying far less than us. What can you do on the pricing to match or remain competitive?

Jason Simon: And I think that with most things, it's not approaching it from one angle, it's approaching it from multiple. So decreasing the number of vendors is always great but then you have to worry about physician satisfaction. And then the other side of that of course is that if you have a smaller number of vendors, then you can say to a group of vendors, here's the price point that we need for you to be able to play in the sandbox, and if you can't match it, then we're not going to use you any longer. But in order to do that, you need to have physician alignment because there will be significant turmoil from staff and physicians if some the implants are going away without their input.

Porter Jones: I think the physician alignment is interesting. When I was overseeing an oncology department, we wanted to decrease the number of vendors and we realized as an administrative staff, we essentially had no leverage. And so we quickly pulled in our highest volume surgeons within the surgical oncology department and said, can you guys help us out? Let's create consensus statements. Let's decide what we're willing to use and at the price points that we're wanting to go. And then we sat at the table altogether as a unified staff, both administrative and clinical showing that this is what we want. And if you can't meet these needs on an administrative side, our clinical staff just will also balk at the non-compliance. So it's great to have the clinical staff involved and people that really understand and care about cost and utilizing that data to identify the cost.

Jason Simon: I think earlier you had mentioned that medicine is so far behind every other industry as far as looking at cost and it's, I think part of it is because we've never questioned cost. So when you have a group of people who are using implants or using instruments or buying things without any consideration as the cost, then the cost of going to balloon and skyrocket. But when you look at this from a standpoint of individuals purchasing for their home, for instance, you're not going to go out and buy the most expensive thing unless you have significant disposable income, right? So everybody who lives on a budget is going to try to find something that matches what they want for the price point that they want. So by applying that to healthcare, we can certainly consider driving the cost down because why would we pay more for things if we can get a better deal?

Porter Jones: Yeah, no, I think that's exactly right. We'd be amiss if we did not touch on patient outcomes. I know Jason, you've told me numerous times you love to look into cost, you love to identify it, be the most efficient you can as a surgeon, but that never comes at the expense of the patient outcomes. And we find that this is extremely important as you're pulling things in and out of the system, changing the variables, especially on the efficiency side and cost side to all the while be tracking and having the leading indicator being the patient outcomes. So one thing that we find important is to always be tracking this on a two by two grid. So as you can see on the X axis here, we have what is the average cost for this procedure? Or sorry, not the average, but what is the cost for the procedure and the average delineated out?

Porter Jones: And then what is the outcome? So this is through patient reported outcomes. Obviously you want the highest number, it's the largest delta as they come in, they're surveyed as they go out, and a few times afterwards they're also surveyed. And so we want the delta maybe not too great at the beginning, but wonderful at the end. So the delta between that wants to be as big as possible. So looking at this, this is the type of clinician that we're hoping we can all migrate to well below the average cost, but well above the colleagues in regards to overall patient outcomes. This is someone we may want to work with a little bit, may want to imitate a little bit what's going over here. Because right here it's well above the average cost, but the outcomes are not good. So we always want to make sure that everything is being looked at with the lens of patient outcomes. And you have spent so much time on looking at cost and being more efficient as a physician for both yourself and your department. Could you touch on how you guys discuss this in regards to patient outcomes as a group, as a department, et cetera, to make sure that this is maintained or just getting better?

Jason Simon: So patient reported outcomes is incredibly important because the only way we know how we're doing are based on how our patients do. Now, when you look at a slide like we have on the screen right now, the big bubbles I would assume have the larger number of patients.

Porter Jones: That's right.

Jason Simon: So, the only thing that I would say about the little bubble all the way to the right is that if we pretend this is a shoulder replacement. For instance, sometimes they're really pricey shoulder replacements, maybe because this is a custom implant for somebody who has a really bad shoulder and we would not expect their patient reported outcomes to be significant. So sometimes there's a lot of cost that goes into somebody who's going to have a very little gain. So, I would always be wary about an outlier like that. However, the big bubbles around like the $10,500 where they didn't have much improvement, that's one that you would look at and say, wow, that's somebody who's spending a lot of money that isn't really moving the needle for their patients compared to the bubble at the 30, the pre and postop or the difference of 35 on the top left that you pointed out earlier.

Jason Simon: Like that's someone who isn't spending a lot of money, but's doing very well, and then the two bubbles that are sitting at 28, 29 for the $9,500 price range, same argument. If this is based on one surgeon, then again with the $9,500 implant, you are seeing that they're doing well if the average delta is the average. So they're landing where they're supposed to everybody below the average isn't. So, the ones that I would be more concerned about are the two that are sitting at $10,500 and $10,250.

Porter Jones: Yeah.

Jason Simon: But I think the reason why we do this in the first place is to take care of our patients. So you don't want to cut cost to the point that you have outcomes that aren't falling where you want. And you also want to make sure that you were staying relatively up to date or with the cutting edge technology, the things that are giving patients better outcomes. For ACLs, for instance, they're being done in a more anatomic fashion now. So as we get better at what we do, there's going to be a decrease in time in the O.R. So that's going to have a direct effect on, costs that we were looking at for the time-dependent costing, but we also want to make sure that the implants we're putting in have a benefit. And if there is a significant price tag that that price tag is well-aligned with the benefit that we're seeing as that outlier all the way to the right, that's a big price tag without much of a win.

Porter Jones: Yeah.

Jason Simon: And did that answer what you were looking for?

Porter Jones: No, I think that was perfect and a good segue into that. And this is where we will finish up. But this is, I'd love your thoughts on a physician scorecard. And I know you utilize these, you have access to these. But this is an automated physician scorecard. It can be done by DRG or within everything that's done by that physician giving an idea of number of cases, personnel, cost, supply cost. This also can be drilled down into also showing patient reported outcomes, readmissions, quality metrics like ERAS. So these are provided anonymously or just individually to the physician themselves. And I'm curious how you react when you receive your physician scorecard and you get to see how you compare to the best performer in your department and how your colleagues react. Is it generally a positive or negative thing when these come out and you're able to see where you stand compared to your colleagues?

Jason Simon: So I think it really depends on where you are in your system and what you're looking for. So for the group that we're speaking to today, looking at ambulatory surgery centers. Going with the assumption that the physicians who are working at these ambulatory surgery centers are well aligned with the system and want to drive costs down.

Jason Simon: When you get a report card like this where you see that you're hitting the numbers of best performer or you're far off of best performer. The question would be is why? And so why are you not in line with everybody else? Or what are you doing that you could help your colleagues with where you are certainly doing better than others? So when there is physician alignment, when they have a dog in the fight, then when you get physician scorecard or cost, that's directly affecting the profitability of your ambulatory surgery center. And any profit that's coming into an ambulatory surgery center where the employees have a stake in it, that profitability can turn into so many different things. You can, like you and I have spoken before, that's money that can be used to improve the patient experience at the surgery center.

Jason Simon: It's money that can be used to improve your staff experience, meaning you can provide benefits for them. You can provide pay raises, you can have break rooms for the physicians, you can have new computers, you can have a bubbly lounge for families. Like when there is excess money coming in and you're doing very well, then that money can be used for a lot of good things. When you are a physician that's aligned with the system and you're not doing well, then you want to know why you're not doing well. Because that's money that you're leaving on the table, then your surgery center is not making. If we expand this to surgery centers that are owned by hospital groups for instance, I work in an ambulatory surgery center, that's part of our system. For a place like that, you have to make sure that the physicians are aligned because we have a number of physicians who operate here who are not hospital employees. And then we have physicians here who are hospital employees and we wanted to make sure that everybody is working together and is aligned such that they do care about where they sit with their benchmarks. Because if you're not aligned with the ambulatory surgery center or your system, then there's very little motivation for you to want to drive your costs down because, well, why does it affect, how does it affect you?

Porter Jones: I think that's, that's great insight. And I found with working with hundreds of physicians, having them have access to their physician scorecards, it just goes back to you don't know what you don't know. Generally they're pretty open especially when they're receiving it personally. It's not being broadcast across the facility. And they're curious. They want to understand why am I slightly off or different than my colleagues? And a lot of times I've even found them proactively going and discussing that with other surgeons within the department, within the facility to understand, hey, how should I look at this different? And so just having this type of data, this granularity really seems to open up conversations and generally that conversation leads to some sort of improvement.

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Penn State Health: Cost Reduction, Efficiency Gains and Quality Improvement [Webinar Transcription]

December 5th, 2023

Enclosed is a transcription from the July 14, 2023 webinar with Dr. Charles 'Chip' Davis from Penn State Hershey Medical Center and Danny Yagoda from Avant-garde Health as they talk about today’s economic challenges with Penn State Health's creative ways to improve care and reduce spend

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