The Business of Powering Profitability: Implementing the Right Metrics to Grow Your Business
Our latest podcast episode in partnership with Becker’s Healthcare features Nader Samii, National Medical’s CEO, and Dr. Amit Patel, the CEO of Summit Spine and Joint Centers. They discuss the roles of technology and innovation in Ambulatory Surgery Centers, and the reasons why spinal procedures are migrating to the outpatient setting. Find out why higher acuity cases such as spinal surgeries can offer ASCs significant growth and how mixed specialty and mixed payer options can be capitalized to drive profitability for your ASC. Plus, get insight on the three most important metrics surgery centers should track to achieve exponential financial success, and how to motivate your team to manage and improve KPIs once they’ve been identified.
Episode Transcript:
Scott Becker (00:00):
This is Scott Becker with the Becker’s Healthcare podcast. Today, we’re thrilled to be joined by two great leaders. We’re joined by Dr. Amit Patel. Dr. Patel’s a surgeon and the CEO of Summit Spine and Joint Centers. We’re also joined by Nader Samii. Nader’s the CEO of National Medical or National Medical Billing Services. And the two are going to talk to us about the migration to surgery centers, key indications, key performance indicators, what metrics they look at, what’s driving growth, what challenges there are, and a lot more. Nader, let me ask you to take a moment to introduce yourself and, Dr. Patel, then I’ll ask you to introduce yourself, and then we’ll get started with the conversation. Nader?
Nader Samii (00:39):
Great. Thanks Scott. So Nader Samii CEO of National Medical in terms of a very quick background: started life as a corporate finance attorney, and then moved into investment banking on Wall Street and then in San Francisco, before shifting into and starting a revenue cycle business that we built up to around 2,500 people and exited, and then I joined forces with Lisa Rock who started National Medical in 2003 as a surgery center focused RCM business. And we joined forces in 2010, building and growing the company together today. And we have approximately 800 surgery centers today that we’re doing work with around the country.
Scott Becker (01:21):
Thank you very, very much. And Dr. Patel, can I ask you to take a moment to introduce yourself?
Amit Patel (01:26):
Yeah, thanks for having me Scott and Nader. My name’s Amit Patel. I’m Chief Executive Officer of Summit, Spine and Joint Centers, an interventional pain platform, largely based in Georgia and now Tennessee as well. We started the practice. My background is that I grew up in Virginia. I’m an anesthesiologist by training, board certified in interventional pain, started my own practice back in 2014, with a single specialty ASC in the State of Georgia. I was able to grow that from sort of one location to seven ASC locations then redid a recap with private equity in 2018, a middle market fund in Atlanta. We then were able to double revenue and increase by 25 to 30% and did another recap last year with M South, which is a kind of a lower middle market fund within Atlanta. We currently are doing our first acquisition now and trying to go multi-state, but really excited beyond the podcast.
Scott Becker (02:25):
I’ve had a chance to visit with both of you before. Both great, thoughtful leaders. Dr. Patel, let me ask you to start: with the ASA markets that appear to have substantial growth after a period of not being in fast growth, can we quickly touch on some of the trends that are driving growth and how can leaders capitalize on some of the growth opportunities? Any thoughts there, Dr. Patel?
Amit Patel (02:45):
Yes, I think I’ll, I’ll talk a little bit from the clinical standpoint. I think, you know, I’m an interventional pain doctor. We work with surgeons as well and a lot now these cases are being done through minimally invasive techniques. And so, you know, a lot of these patients don’t need to be done in a hospital. They’re not long hospital stays. Fusion surgeries can be done through one small incision now; discectomies can be done in a half hour. So innovation is driving the orthopedic space and the pain space. And so I believe a lot of these cases now are moving from the hospital setting directly into the ASC, a higher quality, low cost setting. The other issue is shift to commercial payers. You know, commercial payers are directly contracting with ASCs. We had a payer in the state of Georgia, AmBetter, which is sort of a Medicare based replacement plan, that came to us. They were paying hospitals 175% of Medicare. They’re originally paying us 90% of Medicare and we came to them and said we can move a lot of these epidural cases, these small, minimally invasive cases back into our ASC for 120% of Medicare and take care of your patients right away. So I think that’s driving that as well. And, you know, there’s a 60% of Americans have chronic disease now above the age of 65. And those chronic disease states, whether it’s cardiology, orthopedic related or pain related, those segment populations are driving into the center. So I think you’re seeing a big volume increase as well.
Scott Becker (04:08):
Fantastic. It’s just a lot of growth. And just what you said about commercial payers. At one time the payers weren’t as interested in the freestanding surgery centers, but now they’re much more open to it. Nader, any thoughts on what’s driving growth in surgery centers? I mean, through your billing platform, you see so many different centers doing different things. What are some of your thoughts on what you’re seeing in terms of growth?
Nader Samii (04:30):
Yes, Scott. So it’s a really interesting time in the marketplace. We look at this market and look at the three primary constituents here being the patients, the providers, or surgeons and the payers and the surgery centers offer this very unique, win, win, win scenario for those three constituents. And it’s just rare in life to have all the constituents in a situation to win, with the same answer. And that is more cases moving toward the surgery center. So from a patient perspective: very cost effective for them, cost savings and highly convenient environment, easier to get scheduled, great personalized attention, smaller environment, less sick folks. I think with COVID, that even further accelerated people’s desire to stay out of hospitals as much as possible if they didn’t need to be in one. So the patient’s really driving, from a big perspective. Providers obviously for the same convenience and flexibility perspective, enjoy it, and also have financial opportunities to benefit from it. And from the payer perspective, as Dr. Patel just mentioned, obviously you’re really starting to be driven from a payer perspective too, obviously, significant cost savings. Now, you’re seeing from a CMS perspective, many, many more cases being approved. And then when you add in some of the other things that Dr. Patel talked about, the technological innovation, aging population, you know, all of these components, all things are leading to significant growth in this market. Which is what’s bringing, as Dr. Patel mentioned early on, even in his experience, private equity, and whether it’s private equity, health systems, others really coming to the market because they’re seeing that same growth. So those are some of the other, I think, really key drivers of the growth in a big picture away.
Scott Becker (06:34):
Thank you, Nader. When you look at sort of the growth, what metrics do you use, or you see customers using, surgery centers using, to measure profitability, not just growth? What metrics are people using? And then, Dr. Patel, I’ll ask you the same question.
Nader Samii (06:51):
So besides the obvious natural growth – and growth comes from two angles too – I think a lot of people naturally think of growth as just case volume growth. But I think the even bigger driver of growth in this market is the higher acuity cases moving over. And so therefore your cash-per-case is going up. So on the same volume, you may have 10, 20, 30, 40% or more growth as well. And so it’s important to look at just again, I know your question is on profitability value and growth, not just your volume growth, but that your growth and your cash and your cash-per-case. Things that we would look at that would be impacted there, your specialty mix and your payer mix, so those are things that would have a big impact on that cash-per-case.
But when you get into the profitability perspective, you understand what you’re going to be generating. Once you analyze your contracts with whatever specialties you have, if you’re pain focus or ortho focus, or multi-specialty, doing an analysis of your cash-per-case by specialty, by provider, and then by payer, but then also doing an analysis of your cost-per-case by specialty, by provider, by payer. Lining those up to look at what is generating a higher profit per unit is really important because a lot of people will, a lot of organizations will, get very focused on, look, my revenue’s gone up, my cash-per-case has gone up and that’s great. But if your supply costs have gone up dramatically or your labor costs are much higher, or the time involved is just as dramatically higher. So you need to be able to break it down that way.
So when you’re looking at the cost-per-case, even that should get a step more granular, breaking it down by your labor and by your implants and other supplies as well, so that you can really isolate, you know, what’s where, and what’s moving that needle and then start to focus your energy and efforts around pursuing the types of businesses that make the most sense. Obviously not just from a profitability standpoint. It has to fit your surgery center, has to fit your relationships, how you can recruit and build your surgeon base and your case base. But keeping all of those things in mind are really important. Then of course you have some of the natural, you know, days to pay, days to bill; salaries and wages as a percentage of revenue; some of those other metrics. But really honing in on that profitability per unit is probably the single most important thing to drive, to ensure that you’re focusing on profitability while growing.
Scott Becker (09:26):
Right. So not just sort of what cases bringing the most money, the most volume, but which cases are most profitable and how do you manage them to be profitable and effective in great surgery. Dr. Patel, what can you add to that in terms of how you look at measuring profitability and trying to ensure that you’re focused on the right cases and so forth? Well, while of course also taking care of patients, what needs to be taken care of? Talk to us a little bit about how you sort of look at profitability and measuring it.
Amit Patel (09:55):
I’ll piggyback on a lot of what Nader just said. You know, the most important KPI to me is typically new patients seen in the clinic encounter, right? Because top-line: new patients seen shows the community’s support of the practice. And so those patients then enter a funnel, and from scheduled patients to rescheduled patients, once those patients are then scheduled through the funnel, do they get converted to a procedure or a rescheduled surgery? And then once they get there, what is the check in/checkout rate? Did they get, did they reschedule? Did they have the procedure? So that creates obviously an encounter, which creates revenue, et cetera. So I think a lot of people, when you look at a lot of pain practices or ortho practices, the health of a practice is really judged by new patients seen, which ultimately 30 to 40% of those can convert into a procedure in the ASC.
And if you’re not getting that, you need to really fix that on the front end. I think cash-per-case is really, really important. I think you touched on that for us. We can do 17 to 18 procedures and based on CPT code and looking at cash-per-case, for example, you can be making $400 to $500 a case. And if you’re not doing some of the five to six complex CPT codes in your center, you may have great volume, but you’re not driving revenue. And so what we do is we look at KPIs in our Monday meetings, we take away the small CPT codes and we look at the five complex cases and we look at the health of every service center. What is going on? What is our contractor rates with commercial? What is Medicare paying? What is the cost from a vendor standpoint? Can we drive vendor prices down to help increase profitability? So we do look at that as a separate KPI. For us, physician productivity is really important from a KPI standpoint. The number of cases they’re doing, number one – is easy – but also case mix. Is there a payer mix, are they doing a lot of Medicare replacement plans? Can we help them from a marketing strategy, get out to the commercial markets? We have two or three commercial payers that pay 30% or more. Is there a way we can market towards and help those patients as well? And then days of service. Can we add surgery center days? So how do we know that when we open a new surgery center from another location, we go one day a week to two days a week? What’s our lead time? Are we booking out procedures three to four weeks, should we add another day? How do we bring resources in and be efficient? So I think that’s important. And we typically have Power BI, which is a dashboard for our physicians. Now we just implemented it and shows them productivity on a weekly basis. So they’re aware of, you know, maybe some volume issues or, you know, they’re doing really, really well. So when distribution time comes, when RVU distribution time comes, they know where they stand.
Scott Becker (12:33):
Let me ask you two this. I’m going ask each of you to do this just for our audience, to simplify. And I think I’ve got this from you but, Dr. Patel, if you could tell me the three most important indicators that you are looking at. The three most important that you’re looking at and, Dr. Patel, I know you started with the number of new patients coming the door, but tell us what are the three most important metrics that you really focus on?
Amit Patel (12:58):
So the most important metric I’m looking at is again, new patients seen, because they drive ASCs. Number two, physician KPI productivity — a number of conversions from clinic visits to procedures. And the last one is for us is complex case, cash-for-case, volume encounters.
Scott Becker (13:20):
Fantastic. Number of new patients in, what the surgeons and physicians are doing with those cases, and then sort of the specialty and acuity mix. Nader let me ask you the same question. When you’re looking at surgery centers, advising surgery centers – then we’re going to come back to how you analyze some of this data – Nader, tell us the three most important performance indicators that you look at.
Nader Samii (13:40):
So they’re going to be very comparable. I think first and foremost is the volume. What is that monthly volume? Is it growing? Is it declining? And why? Number two is the cash-per-case, which typically is going to be a function of payer and specialty mix. But if you’re looking at the center’s data every single month, then we’ll typically flag an increase or decrease to get to know why. And then the third would be days to bill because days to bill really is a function of both the speed at which your surgery center is getting their operative notes dictated and dictated correctly over to you, as well as identifying how quickly the revenue cycle team is getting those claims out the door. And so you can typically break it down as to the mix there, between that shift as to how much of those days are broken down between getting the information from the surgeon and the surgery center and how much of it is by the different billing function. So again, you can isolate their opportunities for improvement to get claims out the door.
Scott Becker (14:59):
Thank you very much. And I love that. So you’re really looking at, I mean, very simple at the end of the day, the more you could simplify and analyze the number of cases, the cash-percase, and how quick we’re billing, and then within billing, where is the slow or speed coming from? Is it information from the physician or surgery center’s office, or is it the billing company, and what can we do to improve both of those stats? So we keep cash moving along and cash moving in. Dr. Patel, let me ask you this question. You’re a person who focuses on the data. You focus on what’s going on, key performance indicators. How do you then turn that into actionable use? And you talked about some of this in your answer of, okay, if somebody’s doing cases obtained poorly, is there a way to market more for that person or with that person to a payer that pays better or better cases, but talk a little bit about the kind of things that you can do from an analysis standpoint, from a strategy standpoint, once you have some of the data and analytics.
Amit Patel (15:56):
Yeah. I think you got to make the data real and live and discussion is important. So for example, from a physician KPI standpoint, you know, we use Power BI, which is a data analytic tool that we can kind of derive from our data warehouse that then drives this important metrics to each physician. So they know where they stand. And that essentially leads to discussion from a volume standpoint, from a case standpoint, “Hey, how can you help me get better in our centers to become more profitable?” The other is just regular discretion discussion from a KPI standpoint with our finance team. We have financial metrics just like from an RCM standpoint that we mentioned before. What is our 90 days AR? What is our clean claim percentage? How do we make that better from a bottleneck standpoint? And then having alignment around the KPIs. You can have KPIs just to have KPIs, but are we using them? You find out very quickly during your meetings that, hey, you’re not looking at these four KPIs. Haven’t looked at ’em for months and we’re not making any decisions based on them. And so once we realize that, we try to fine tune some of that, so kind of a coherent discussion, and then having live data that’s accessible from all parties, from the finance team, from the doctors, from the operations, I think makes the data live and we can make active decisions.
Scott Becker (17:18):
Thank you very, very much. That’s super helpful. Cause at the end of the day, if it’s like a compliance plan or anything in life, if you have it but aren’t using it to make decisions, it’s not really worthwhile. It’s not really worthwhile and useful here. We’re trying to put those into action. Thank you. Nader, some of your thoughts on how you take some of these key performance indicators, whether it’s cases, acuity, billing days, and then turn that into action. So it’s actually leading to sort of management. Some of your thoughts there.
Nader Samii (17:43):
Yeah. And I agree with a lot of what Dr. Patel said, and even just to, before I jump into fully answering the live element of that, it’s important because what he’s talking about there is you literally can have things up on a screen while you’re having a meeting and a KPI pops up and you want to know more about it. You click on it. It now goes to that next level of depth behind it. And then you click on that and it can go to next level of depth all the way down to, you know, getting to a claim level, for example, depending on what KPI you’re looking at. And so you can really problem solve live. And so that’s really powerful.
But in terms of how to make this come to life is coming up with, one, is obviously you’ve got to have a good source of data. So whether it’s Power BI or using, or some form of business intelligence, having that form of data and then having, you know, developing the KPIs you want out of those. And again, keeping it simple and not too many. Each department, each area, should have three to five. And I would say no more than that because you start to get lost in it and they become a lot less meaningful if you get too many. You might have subsets of ones that deeper operators might get into, but you need to keep it relatively simple. And then you’ve got to have a rhythm for who’s getting that data and how they’re getting it and how they’re seeing it. And so, you know, certain KPIs are going to be looked at every single day. Some are going to be weekly, some are going to be monthly, some might be quarterly, but having that rhythm and then creating a culture in your company that it is absolutely talked about, thought about, people eat, breathe, and sleep it. You realize it when you’re walking down the hall and people are talking about their cash-per-case, they’re talking about the days to bill, then you know that it’s really living and breathing in your organization. And that happens by again, creating that visibility and having constant meeting discussions and it just becomes part of the vernacular in an organization. It’s so critical and having those very regular meetings, we teach our team. You know, you can pick whether you start your day or end your day, but you got to have those metrics that you’re either starting or ending your day with and looking at every single day, and then for other ones every single week. Asking people questions about it and then people know that those questions are coming and then it just becomes again part of their every day. And I think until you’re there, then it just becomes a pretty thing that you pull up, you know, periodically and people talk about it and then you go back to not doing anything with it. And that’s, you know, again, there’s really not much point there.
Scott Becker (20:28):
But I think your point is so well taken on metrics, on key metrics. If people look every once in a while versus in a really consistent way. And I love this concept: you have a choice look at ’em at the start of the day or the end of the day, but you have to pick one of ’em because you can’t start to get to action unless you really do look the metrics for themselves. And then it’s constantly realizing the metrics themselves are the starting point, not the ending point, there’s a starting point. There’s like what actions are needed to move forward. Thank you both. Nader, let me ask you this question. We’ve talked a lot about case volumes, acuity of cases, unit profitability per case, cases in the door, how those cases are converted, and a lot more between you and Dr. Patel, anything we’ve not touched on? Anything you’d love to leave the listeners with?
Nader Samii (21:13):
That’s a good question. I think really, maybe just a little bit of what I just ended with there. You’ve got to find a rhythm and a fit for your own organization. So you can read books and you can come up with, you know, approaches and strategies, but it has to fit your personality and personality of your organization. So we’re a very positive kind of hard work environment, but we’re not, you know, get up, sing and dance, sing and dance and rah-rah, you know, in a circle kind of people, but some people are. So you have to find which of those mechanisms work. But I would say once you settle in on those and you’ve got good rhythm and metrics that you put in place, develop that consistency. Make it again, fit your personality, if you are rah-rah, make it that. But then you can also do some really interesting things like create some competitions, something that rallies the troops. Pick a metric for a month, pick a metric for a quarter, be careful that you don’t stay on one metric for the whole year because behavior can become only focused on one thing and that’s generally not healthy either. It can lead to, you know, you might have a great number with that one metric, but it can make you lose focus on some of the other ones that need to balance those from an overall quality and performance standpoint, but creating an environment where again, you know, there’s some event at the end of the month, if we hit this goal, if we hit this number and get everyone dialed into it and maybe do that for a month or two, and then you switch it up. But creating some environment that really gets people excited and rallies the troops around it and you know, obviously has some benefits for people, whether it’s a party, whether it’s bonuses, again, whatever fits your culture. I think that’s a really good way to bring some of these things to life in a meaningful way that makes a difference for your team and employees so they don’t just feel like they’re going through the motions. And it’s a really nice culture comradery builder too.
Scott Becker (23:14):
But it’s important as a way to bring key performance indicators on profitability and growth and everything else into live action in a way that people can engage with and so forth. That seems to be the point of it. And Dr. Patel, anything that you’d like to share that you’ve not shared yet? You’ve had this tremendous success in building the business that you’ve built, great surgery centers, great pain management. Anything else you’d like to share with the audience today?
Amit Patel (23:38):
No, I’d piggyback off what Nader said. I think he kind of hit everything there. I think one size doesn’t fit all with KPIs. It’s the inherent DNA of every culture and company with specific KPIs that they look at. I do think it’ll be incumbent on ASCs to use KPIs and metrics over the next four to five years when they enter into agreements with payers when they need to collect and analyze data, when they’re looking at bundle payments. So starting now looking at specific KPIs that drive your center will be really, really important.
Scott Becker (24:10):
Thank you very much. And I love the discipline discussion around how often it’s got to be discussed and then to take action on to be useful. I want to thank Dr. Patel. Dr. Patel, brilliant founder of Summit Spine and Joint Centers. They’ve done a tremendous job. And Nader Samii, a remarkable leader, CEO of National Medical Billing Services, NMBS. It’s just tremendous. Thank you both for joining us and sharing some your thoughts on surgery centers key performance indicators and what makes them profitable, what makes them grow, and the culture of the community looking at them as well. And how important that is. Thank you both for joining us.
Nader Samii (24:45):
Thank you, Scott. I really appreciate it. Thank you, Dr. Patel.
Amit Patel (24:48):
Thanks Nader.
This post was first published June 8, 2022 and was updated June 13, 2022.