Administrator boosts revenues, cut costs
One change added $220,000 annually
How would you like to boost your revenues by $220,000 annually?
Northwest Michigan Surgery Center in Traverse City was able to increase its coffers by that mount by renegotiating insurance contracts and carving out implants for underreimbursed cases. Jim Stilley, FACHE, CASC, CEO at the ambulatory surgery center (ASC).
"Insurance companies have been pushing ASCs around in my state," he says. He spent a significant amount of time helping insurance company officials to understand the benefits of surgery centers. "I was asking the insurance company how much they were paying for the same care at the hospital," Stilley says. "I showed them they were paying 200%-300% more at the hospital."
When the officials said the hospitals are providing a community benefit, Stilley responded that surgery centers provide charity care, pay taxes, and provide many other benefits.
This step was only one of a series of cost- cutting, revenue-generating moves implemented recently by Stilley. Others include:
• Renegotiated natural gas futures to a fixed rate that saves $2,000 a month in energy costs.
Because natural gas providers in Michigan aren't allowed to have a monopoly, Stilley's local gas provider must allow competitors. Many of those competitors have fixed rates, he says. Stilley was able to lock in his gas rates for a year, which paid off. He had an opt-out clause, but still, "it was a gamble on my part, but I've never seen any local gas rates go down," he says.
• Oversaw and successfully refuted government's demands for use tax and property tax increases.
Officials with the state of Michigan were performing unseen use tax audits. They were tracking bills for supplies and implants to ensure taxes had been paid, Stilley says. "They would find a couple of errors, and they wanted to extrapolate," he says. They said the center owed $400,000 for a five-year period.
Stilley hired an accountant who was able to demonstrate that they had been paying taxes and that those errors were rare.
Medicare also is known for finding an error and attempting to apply that error across the board. Many managers simply pay, Stilley says. "It requires time and effort" to fight it, he points out. However, "for $400,000 in taxes, going back five years, it's worth $20,000 to $30,000 to have an accountant come in and weed through the books."
Also, Stilley was able to refute a property tax increase. Although you wouldn't want to use this tactic if you were considering selling your facility in the near future, Stilley pointed out to the local township that as home values were dropping, commercial values also were dropping. The re-evaluation of the property value netted about $10,000 annually.
•Cut medical malpractice premiums by $20,000.
How did Stiles accomplish this reduction? Simply by learning about malpractice premiums, he says.
Stilley started asking questions. He learned that his deductibles were far too high and that they can be lowered. Stilley went through bids on every contract. "I said, 'I know you're charging too much for this deductible and level of coverage.' It dropped," he said.
"Our industry is so young," Stilley says. "We have some great administrators, but there's so much to do in our jobs. There's not a lot of support staff."
When Stilley worked in a hospital, there were about five vice presidents handling different areas. "When you're at an ASC, you have to be a jack of all trades," he says. "If you aren't real knowledgeable, you'll make underinformed CORRECT decisions."
Northwest Michigan Surgery Center in Traverse City was able to increase its coffers by that mount by renegotiating insurance contracts and carving out implants for underreimbursed cases. Jim Stilley, FACHE, CASC, CEO at the ambulatory surgery center (ASC).You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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