Surgical Volume Key to Margin Recovery for Hospitals By Greg Flanagan, COO

Last year was the worst financial year for hospitals since the start of the pandemic, according to Kaufman Hall, with half of all hospitals reporting negative operating margins. For many, 2023 doesn’t look much better, with cost pressures from staffing remaining high and reimbursements from payors stagnant, or even declining. As a result, hospitals are looking to increase the volume of one of its few profitable revenue sources: surgery.

Hospitals without access to capital face significant challenges and are cutting jobs, and reducing or eliminating service lines in an attempt to return to profitability. Those with access to capital are expanding surgery departments, adding new suites and outpatient surgery centers. However, increasing the physical capacity is just part of the challenge to increase surgical volume.

Hospitals need to attract physicians to their ORs.

Most surgeons have privileges at multiple hospitals. So, if their patients’ insurance is equal at more than one facility, the surgeon can assign that surgery to the hospital of his or her choice.

So, what factors determine where surgeons decide to operate?

  1. Surgeons want the best environment and equipment. Whether that means ease of access to the surgical suite, proximity to office and parking or the availability of robotics technology, surgeons want an OR that enables them to operate efficiently and effectively.
  2. Surgeons want blocked OR time. If surgeons are going to steer volume to a facility, they want the OR to be available so they can schedule and perform surgeries efficiently.
  3. Surgeons want great surgical staff. They want the patient to be positioned and prepped properly, the trays of tools they use set up the way they like them, qualified staff to assist and close and the room to be turned quickly for the next procedure. Excellent surgical staff not only make it easier for the surgeons to do their job, they increase the productivity of the OR which directly benefits the physicians business.

While any hospitals can make the capital investments to provide an efficient OR and offer surgeons the time they want to perform surgeries, the key differentiator for many facilities is the quality of the staff in the OR.

Hospitals have a difficult time recruiting and retaining top notch surgical staff, especially certified surgical assistants (CSAs). They recruit for a wide variety of positions and the universe of CSAs is very small, so unless you are focused on hiring the limited number of professionals in that area, it can be a tough task. Managing those professionals to maximize productivity without burning them out takes a concerted and ongoing effort. Surgical schedules change on a daily basis. When a hospital has in-house staff, those changes often result in either reduced productivity from underutilized staff or overworking of providers that ultimately leads to turnover.

At AP Health, we’ve built our business with a focus on providing staff to assist in a variety of surgical specialties. We have a deep bench of advanced practice providers and CSAs who we can deploy in near real time to meet the changing surgery schedules. Our model, which we’ve honed over the past eight years, has enabled us to staff ORs in dozens of hospitals and surgery centers.

We relieve the hospital of all the burdens of staffing surgeries. We take responsibility for all recruiting, credentialling, scheduling, management, and billing of surgical assistants. And, because we focus on productivity and efficiency, our hospital clients spend less. For one client, we’ve generated savings of more than $7 million since they partnered with us.

While partnering with AP Health seems like an obvious option for hospitals seeking to grow profitable surgical volume, some system-wide policies designed to reduce costs can actually prevent them from doing so. “No new contract” policies that are intended to reduce outside costs are limiting innovative approaches staffing that would increase profits.

In addition to providing hospitals with a more efficient surgical staffing solution, AP Health helps hospitals differentiate themselves from the competition by providing staff that surgeons want to work with. Given a choice of otherwise equally equal facilities, surgeons will steer their patients to the one with staff that help makes surgery run more smoothly and increases their productivity. As a result, OR staffing can play a key role in increasing surgical volume and as a result, provide a path to profitable operating margins.