Tracking financial data in an ambulatory surgery center.
By Pete Mercer
In the fast-paced and highly regulated environment of an ambulatory surgery center, tracking financial data is not just a best practice – it’s a necessity for long-term success and sustainability. With rising operational costs and shifting reimbursements, these outpatient facilities are turning to detailed financial data to guide key decisions, from staffing and equipment investments to service expansion. As financial pressures mount, understanding the story behind the numbers is helping these centers balance efficiency with high-quality patient care.
Repertoire Magazine spoke with Matt Lau, a senior financial advisor for Avanza Strategies and the senior vice president of client accounting and financial services for Avanza parent company MedHQ, about what the financial data in an ambulatory surgery center means for the organization and how it can be leveraged to better understand the financial position. Avanza Strategies is an advisory firm devoted to supporting ambulatory surgery centers from concept to launch, providing strategic, consultative feedback to help ASCs put their best foot forward. This is part one of a two-part series where we get a better understanding of how ASCs track and leverage their financial and clinical data.
How financial data impacts ASCs
While financial metrics are typically not used to measure quality or improve patient outcomes in ASCs, it’s important to understand how gathering and reporting that data can impact ASC reimbursements. “The Medicare Ambulatory Surgery Center Quality Reporting (ASCQR) Program requires surgery centers to report specific quality measures,” Lau said. “Failure to meet the program’s clinical reporting requirements can result in a 2% reduction to the ASC’s reimbursement schedule from Medicare.”
One area where the financial metrics can link to clinical outcomes is case costing, the process wherein an ASC determines the direct and indirect costs of a surgical procedure. According to Lau, if case costing can show that a procedure can be done differently while maintaining quality patient outcomes, it is possible to change physician behaviors. This can be a lengthy process, typically managed by materials managers and OR nurses, but it’s critical for ensuring that an ASC maintains healthy margins.
Through case costing, ASCs can analyze the resources used in specific surgical cases, particularly medical supplies and implants. Lau said that when ASCs compile case costing data on a sufficient number of cases and include the clinical outcomes for those cases, they can compare the specific types of supplies and implants used by different surgeons performing the same procedures. Most billing technology platforms have the capability to track costing data for each case that is performed in the facility.
“If there is a significant difference in costs with the same positive outcomes, this information could help to potentially change physician behaviors concerning their use of supplies and implants and improve the overall financial health of the ASC without sacrificing quality or patient satisfaction,” Lau said.
Why financial data matters
Why is financial data so important? Without a deeper understanding of what the financial data is saying about the performance of an ASC, it’s much more difficult to make meaningful changes to any processes that might not be getting the best results.
“Financial reports can highlight key drivers of ASC financial performance,” Lau said. “For example, an income statement trend report that provides the ASC’s financials side by side over time could show that profits started to decrease at the same time anesthesia stipend expense started to increase. The ASC could then discuss ways to reduce the anesthesia stipend costs and implement those operational changes to help improve the bottom line.”
With better insights, it’s easier to make better, more informed business decisions. Measuring the financial results against the expectations of the budget might reveal new insights into revenues and profits that could then correlate with launching new programs (e.g., total joint replacement) for the ASC.
Lau said, “From there, the ASC could implement further changes that would support the growth of the new program. Additionally, comparing the ASC’s financial metrics against industry standards could show that the ASC is spending far more on its labor than similar ASCs. This revelation could lead to evaluating and changing the employee scheduling process to make it more flexible, efficient, and cost-effective.”
Part of the challenge with understanding why financial data matters is that most ASC employees have a clinical background. On top of that, financial reports can feel extremely overwhelming to people who are not necessarily business oriented. Lau explained that tracking and reporting financial data is a huge responsibility, but it’s critical to understand what your numbers say about the financial health of the business.
“They often have had extensive clinical training and are extremely knowledgeable about taking care of patients. ASCs could not exist without these super smart clinical people, but they may not be as comfortable and knowledgeable when it comes to the financial side of the business,” he said.
Leveraging the latest technology for the future of data tracking
As technology continues to evolve, it allows for new opportunities to streamline processes that used to require a significant amount of time. While automation and AI are still in the early days as far as what these tools are capable of, they can create efficiencies right now that will significantly impact and improve the team.
Lau said, “One area where technology is helping to streamline the process of tracking and measuring financial data is the processing of the ASC’s invoices.” This has traditionally been a lengthy process that involved mailing an invoice to the facility, having someone open the mail, file and manually enter the invoice into the accounting system, and assigning the correct expense accounts before any payment was made.
AI is perfectly suited to simplify complex processes like invoicing, greatly reducing the margin for error and freeing up the rest of the team to accomplish other tasks around the center. “The processing of invoices is becoming much quicker, and the coding of these invoices is more accurate, which then leads to more timely, accurate, and reliable financial reporting.”
Like with everything else, technology is on the frontline of trends that are shaping the future within the ambulatory surgery space. As things like automation and AI take center stage in the next few years, ASCs will need to be able to adapt to the changing landscape.
Tools like barcode readers can help ASCs to streamline inventory counts and order supplies, while AI can work to reduce time and errors for processing accounts payable and coding surgical procedures for the facility. Through tools and resources like these ASCs have an opportunity to get deeper insight into the information that matters most.
Lau said, “ASCs can utilize tools such as business intelligence solutions and data lakes to collect data from their various systems – like revenue cycle, inventory, payroll, accounting – analyze that data and convert it into meaningful information and actionable insights to facilitate more informed decision-making.”
Key points
- Financial data is essential for strategic and operational decisions
Ambulatory Surgery Centers (ASCs) rely on detailed financial data to guide critical decisions related to staffing, equipment, service expansion, and overall sustainability. Accurate financial tracking helps identify performance drivers and supports informed changes to improve margins and operations. - Case costing connects financial metrics with clinical outcomes
By analyzing the direct and indirect costs of procedures (case costing), ASCs can compare surgeon practices and resource use while maintaining patient care quality. This data can help change physician behavior and optimize the use of supplies, ultimately improving the ASC’s financial performance without compromising outcomes. - Technology and AI are streamlining financial processes
Automation and AI are reducing manual workload in areas like invoice processing, coding, and inventory management. These technologies enhance the accuracy and speed of financial reporting, enabling ASCs to make quicker, data-driven decisions and stay competitive in a fast-evolving healthcare environment.