Mastering Ambulatory Surgical Center Success: Essential KPIs to Track

Welcome, fellow entrepreneurs!

If you're in the healthcare space and planning on starting an ambulatory surgical center (ASC), it's important to track key performance indicators (KPIs) to measure the success of your facility. With the increasing demand for outpatient services, ASCs have grown in number to fulfill the needs of patients. In fact, the ASC market size is expected to reach $142.9 billion by 2028, according to a report by Grand View Research. But how can you ensure the success of your facility?

• Average Length of Stay: One of the most important KPIs for an ASC to track is the average length of time patients spend at the center. This can help measure efficiency and patient satisfaction.
• Patient Satisfaction Score: Another key metric is the patient satisfaction score. This can be measured through surveys and feedback, which can provide insights into areas of improvement and help build a loyal patient base.
• Number of Procedures Performed Per Month: The number of procedures performed per month is also an important figure to track. A higher number of procedures generally indicates a successful ASC with a high volume of patients.

We'll dive deeper into more KPIs in this article, including insurance reimbursement rates, percentage of patients served under an insurance plan, operating margin, and number of referrals from primary care physicians. By the end, you'll have a better understanding of the core metrics that are crucial to measure the success of your ambulatory surgical center.

Average Length of Stay

As an ambulatory surgical center (ASC) owner or manager, tracking key performance indicators (KPIs) is vital to your success. One such KPI metric is the average length of stay (ALOS), which can provide you with insight into your ASC's efficiency and patient experience. In this chapter, we'll explore ALOS in-depth, including its definition, use case, how to calculate it, industry benchmarks, and more.

Definition

ALOS is a KPI metric that measures the average time a patient spends in your ASC for a specific surgery or procedure. This metric includes the time from the patient's arrival to discharge, including any pre-op or post-op recovery time.

Use Case

ALOS is a vital KPI for ASCs because it provides insight into patient satisfaction, efficiency, and the overall quality of care provided. For instance, a low ALOS could indicate a highly efficient ASC with satisfied patients. On the other hand, a high ALOS could indicate inefficiency, an overwhelmed staff, or a low-quality patient experience. By tracking ALOS, you can identify areas for process improvement to enhance patient satisfaction and streamline operations.

How To Calculate KPI

Calculating ALOS is relatively simple. You'll need to record the time a patient arrives and is discharged for a specific procedure or surgery. Then, subtract the arrival time from the discharge time, including any prep or recovery time, to get the total time spent in the ASC. Finally, divide the total time spent by the number of patients to get the ALOS.

Calculation Example

Let's say your ASC completed four cholecystectomy surgeries last Tuesday. The arrival and discharge times, including prep and recovery time, are as follows:

• Patient 1: Arrived at 8 am, Discharged at 11 am
• Patient 2: Arrived at 9 am, Discharged at 1 pm
• Patient 3: Arrived at 10 am, Discharged at 12 pm
• Patient 4: Arrived at 11 am, Discharged at 2 pm

The total time spent in the ASC for these patients is:

• Patient 1: 3 hours (11 am - 8 am)
• Patient 2: 4 hours (1 pm - 9 am)
• Patient 3: 2 hours (12 pm - 10 am)
• Patient 4: 3 hours (2 pm - 11 am)

The total time spent in the ASC for the four patients is 12 hours (3+4+2+3), and the ALOS is:

KPI Advantages

• ALOS can indicate an efficient ASC with satisfied patients.
• Tracking ALOS can help ASCs identify areas for process improvement to streamline operations.
• ALOS can contribute to better resource utilization and allocation of staff and equipment.

KPI Disadvantages

• ALOS may not be a reliable KPI for some procedures, such as diagnostic tests or minor surgeries.
• The metric does not account for patient acuity or complexity, which can affect recovery times and ALOS.
• ALOS does not consider patient satisfaction or the quality of care provided.

KPI Industry Benchmarks

ALOS can vary widely depending on the type of surgery or procedure performed, patient demographics, and geographic location. However, ASCs should aim to achieve an ALOS below industry benchmarks to maximize efficiency and improve patient satisfaction. According to ASCA, the national average ALOS across all specialties is 1.56 hours.

Patient Satisfaction Score

One of the most important Key Performance Indicators (KPI) for any Ambulatory Surgical Center is the Patient Satisfaction Score. It measures how satisfied patients are with the care they received during their surgical experience. It is a crucial metric that helps ASCs determine the quality of care they deliver to their patients. Here is everything you need to know about this KPI:

Definition

The Patient Satisfaction Score is a KPI that measures the satisfaction of patients who received surgical care at an Ambulatory Surgical Center (ASC).

Use Case

The Patient Satisfaction Score is a critical KPI for ASCs. It helps measure how satisfied patients are with the surgical care they received at the center. A high Patient Satisfaction Score indicates that patients are receiving high-quality care and are satisfied with the treatment they receive. It can also be used to identify areas that require improvement, such as waiting times, cleanliness, or staff interactions with patients.

How To Calculate KPI

The Patient Satisfaction Score is calculated by asking patients to fill out a satisfaction survey after they have received surgical care. The satisfaction score is usually calculated on a 10-point scale, with 10 being the highest possible score. Patients typically provide ratings for different aspects of their experience, including the quality of care, staff friendliness, and waiting times.

Calculation Example

An ASC collects satisfaction surveys from 50 patients who have received surgical care. The total score of these surveys is 420. The Patient Satisfaction Score is:

Therefore, the Patient Satisfaction Score for this ASC is 8.4 out of 10.

KPI Advantages

• The Patient Satisfaction Score helps ASCs determine the quality of care they provide to their patients.
• A high Patient Satisfaction Score indicates that patients are satisfied with their surgical experience.
• It can help ASCs identify areas that require improvement.

KPI Disadvantages

• Patient satisfaction surveys can be subjective and might not always provide an accurate representation of the care provided by the ASC.
• Some patients might not fill out the survey, leading to a low response rate.

KPI Industry Benchmarks for the KPI: 'Patient Satisfaction Score'

According to the National Surgical Quality Improvement Program (NSQIP), the average Patient Satisfaction Score for Ambulatory Surgical Centers is around 8.5 out of 10.

Insurance Reimbursement Rate

Definition

Insurance Reimbursement Rate is a KPI metric used to calculate the proportion of money healthcare providers receive for services rendered, compared to the amount billed to health insurance companies.

Use Case

This KPI is vital for Ambulatory Surgical Centers as it helps to measure the effectiveness of billing practices and financial viability. By keeping track of Insurance Reimbursement Rates, businesses can identify problems with billing processes, verify that insurance providers are paying according to their agreements, and optimize revenue management.

How To Calculate KPI

The formula to calculate Insurance Reimbursement Rate is:

Calculation Example

ABC Ambulatory Surgery Center bills $100,000 in services to health insurance providers. During that period, $65,000 is received from the same providers. Therefore, the Insurance Reimbursement Rate for ABC Ambulatory Surgery Center is (65,000/100,000) x 100 = 65%.

KPI Advantages

• Provides a clear picture of the effectiveness of Ambulatory Surgical Center billing processes.
• Allows ASCs to identify problems with billing procedures.
• Helps with revenue management.

KPI Disadvantages

• The KPI doesn't offer any insights into the reasons behind low reimbursement rates.
• It doesn't account for self-pay patients or patients with other forms of insurance.
• It doesn't consider the negotiated rates with the insurance providers.

KPI Industry Benchmarks for the KPI: 'Insurance Reimbursement Rate'

According to industry benchmarks, the average Insurance Reimbursement Rate for ASCs is around 70% to 80%. Increasing the rate to over 90% is considered an excellent performance.

Number of Procedures Performed Per Month

Definition

The number of procedures performed per month is a metric that measures the total number of surgeries or medical procedures conducted in an ambulatory surgical center (ASC) within a month.

Use Case

The number of procedures performed per month is an essential KPI that helps ASC administrators and healthcare providers assess their productivity levels. It indicates the number of patients they treat and can help determine how many staff members are required to accommodate this volume.

How To Calculate KPI

To calculate the number of procedures performed per month, the formula is:

Calculation Example

If an ASC carried out 200 procedures in a 30-day month, the calculation would be:

KPI Advantages

• Helps assess the productivity levels of an ASC.
• Enables proper staffing levels to accommodate patient volumes.
• Measures the success of the ASC, which, in turn, boosts confidence among stakeholders.

KPI Disadvantages

• Does not account for variations in the complexity of medical procedures or surgeries, which can skew the productivity levels within a month.
• Does not account for cancelled appointments or delays in surgeries. Thus, it may vary month by month, making it difficult for long-term planning.
• The KPI requires accurate record-keeping of procedures, which can be time-consuming and taxing on staff members.

KPI Industry Benchmarks for the KPI: Number of Procedures Performed Per Month

Benchmarking the number of procedures performed per month can provide managers with an idea of how their ASC measures up against others in their industry. Depending on the type of specialty area, the benchmark varies. Some industry benchmarks are:

• Cardiology - 120 procedures
• Ophthalmology - 160 procedures
• Gastroenterology - 120 procedures
• Orthopedic - 80 procedures

Percentage of Patients Served Under Insurance Plan

Definition

The Percentage of Patients Served Under Insurance Plan KPI measures the number of patients covered by insurance in relation to the total number of patients served at an ambulatory surgical center.

Use Case

This KPI helps ambulatory surgical centers understand the level of insurance coverage among their patient population and helps them determine if they are meeting their insurance objectives.

How To Calculate KPI

To calculate this KPI, divide the number of patients covered by insurance by the total number of patients served and multiply the result by 100.

Calculation Example

Suppose an ambulatory surgical center served 500 patients over a particular period, and 250 of those patients had insurance coverage. In that case, the calculation for the Percentage of Patients Served Under Insurance Plan would be as follows:

KPI Advantages

• Helps ambulatory surgical centers identify areas where they need to expand their insurance coverage and plan for future growth.
• Provides insights into the effectiveness of an ambulatory surgical center's patient insurance outreach efforts.
• Enables ambulatory surgical centers to benchmark their performance against industry standards.

KPI Disadvantages

• Does not provide insights into patient satisfaction levels or clinical outcomes.
• Does not account for patient needs or their ability to obtain insurance coverage.
• May not be relevant to ambulatory surgical centers that serve uninsured or underinsured patients.

KPI Industry Benchmarks

Industry benchmarks for this KPI vary significantly depending on geographic location and patient demographics. However, a reasonable benchmark for most ambulatory surgical centers is between 60-80%.

Operating Margin

Definition

The Operating Margin KPI is a financial ratio that indicates a company's profitability by measuring the percentage of its revenue left over after deducting all operating expenses. This KPI provides insight into a company's ability to generate profits from its core business activities and is a crucial metric in evaluating its financial health and performance.

Use Case

The Operating Margin KPI is an essential measure for ambulatory surgical centers to track to ensure their business's financial success. A higher operating margin indicates a higher degree of operational efficiency, which can help ASCs make informed decisions to improve their overall profitability.

How To Calculate KPI

To calculate the Operating Margin KPI, use the following formula:

Calculation Example

Suppose an ASC has an annual revenue of $5 million, a cost of goods sold of $2 million, and operating expenses of $1.5 million. Using the Operating Margin formula, we have:

KPI Advantages

• Helps ASCs identify inefficiencies and improve operational efficiency
• Allows ASCs to make informed decisions about pricing, expansion, and investments
• Provides insight into the overall financial health of an ASC

KPI Disadvantages

• May not accurately reflect cross-industry comparisons since it is industry-specific
• Does not account for one-time expenses or non-operational income
• Can be affected by accounting practices and changes in accounting standards

KPI Industry Benchmarks

The Operating Margin KPI's benchmark varies by the ASC industry or subsector, so it is crucial to compare your ASC's Operating Margin with industry standard levels through research and staying updated with the latest trends.

Number of Referrals from Primary Care Physicians

Definition

The metric, Number of Referrals from Primary Care Physicians, measures the number of patients referred to an ambulatory surgical center by primary care physicians. This KPI indicates the performance of a center in attracting patients through referrals from primary care physicians.

Use Case

Referrals from primary care physicians can bring a large volume of patients to an ambulatory surgical center. An increase in the number of referrals can help increase the patient volume, which can lead to better financial performance and higher patient satisfaction. The Number of Referrals from Primary Care Physicians KPI can help the center understand and improve its marketing and outreach to primary care physicians.

How To Calculate KPI

To calculate the Number of Referrals from Primary Care Physicians, you need to divide the number of patients referred to the center by primary care physicians by the total number of patients the center treats and multiply it by 100.

Calculation Example

Suppose an ambulatory surgical center treats 1000 patients in a month, and it receives 200 referrals from primary care physicians during the same period. Using the formula, the Number of Referrals from Primary Care Physicians KPI for the center for that month would be:

KPI Advantages

• Helps measure the effectiveness of the center's outreach to primary care physicians
• Assists in identifying areas where the center can improve to increase referrals
• Can lead to an increase in patient volume

KPI Disadvantages

• Number of referrals cannot indicate the quality of care provided at the center
• KPI does not take into account the referral volumes from other sources, such as online reviews or word-of-mouth recommendations

KPI Industry Benchmarks for the KPI: 'Number of Referrals from Primary Care Physicians'

There are no industry benchmarks available for the Number of Referrals from Primary Care Physicians KPI due to the variation in the market and geography of different ambulatory surgical centers.

In conclusion, tracking key performance indicators (KPIs) is crucial for measuring the success of an ambulatory surgical center (ASC). Specifically, the average length of stay and patient satisfaction score are essential for measuring efficiency and building a loyal patient base. Additionally, the number of procedures performed per month is an important figure to track as it indicates a successful ASC with a high volume of patients.

• Monitoring Insurance Reimbursement Rates is crucial for the financial success of your facility. Negotiating better deals with insurance companies can lead to a higher operating margin and overall profitability.
• Tracking the Percentage of Patients Served Under an Insurance Plan is helpful in understanding your patient demographics and can inform marketing efforts. It also helps in anticipating revenues and managing costs.
• Measuring the Operating Margin helps to determine the financial viability of your ASC by calculating the percentage of revenue that is left after covering all expenses.
• Finally, tracking the Number of Referrals from Primary Care Physicians is important for driving patient volume and establishing partnerships with referral sources.

By regularly monitoring these KPIs, healthcare entrepreneurs can ensure the success of their ASC and continue to provide valuable outpatient services to their patients. With the ever-increasing demand for these services, it is important to stay ahead of the competition and remain profitable.