Imagine you are the batter in a major league baseball game. The pitcher throws 100mph missiles, and you don’t want to get hit by the ball. As the pitcher prepares to hurl a fastball, your eyes zoom, and your focus intensifies. Right before the pitcher releases the ball, you are suddenly blindfolded! Without your eyesight, you wait in panic, with hope as your only tool for avoiding a painful, bruising impact. Then, you wake up, relieved to find this was only a nightmare.

A similar scenario plays out in ASCs every day, except it’s not in the dreams of center operators. For a surgery center to exist and serve patients, it must make a profit. When cases are scheduled, centers have to look at them carefully to ensure they can be done profitably. However, without good tools to perform this analysis, ASCs are essentially blindfolded and, all too frequently, get unexpectedly hit by unprofitable cases. Just like getting hit by a 100mph fastball, it hurts a lot.

Why are centers blindfolded and unable to see unprofitable cases ahead of time? The truth is surgeries are complex events, and payer contracts might be even more complicated. To add to the difficulty, costs vary significantly by procedure, especially when implants are involved. In this challenging environment, ASCs usually employ one of two strategies to detect unprofitable cases:

Experience & Gut

This strategy uses the most tenured business office staff to review cases manually. Their deep experience, including being hit by many unprofitable cases, allows them to spot potentially unprofitable cases.  

• Pros: This is the low-cost approach, as experienced staff can quickly identify unprofitable cases. This method is workable for centers with simple cases, high repetition, and more straightforward payer contracts.  

• Cons: Staff can miss unprofitable cases that a more thorough, automation-driven approach would otherwise find. This strategy also relies highly on key staff members that may leave the center at some point.  

Custom Spreadsheets

This involves building and maintaining an Excel model that incorporates payer contracts, often limited to Medicare rates, and historical case cost data with quality that varies widely by center.  

• Pros: This approach is usually more accurate than the “experience & gut” model. It is also less vulnerable to key staff turnover, assuming other employees can maintain and interpret the Excel model.   

• Cons: Building and maintaining a profit forecasting financial model can consume 50% of an expensive FTE’s time, and the data used in the model often has significant limitations.     

As we know from experience, gut instinct can only get us so far, and spreadsheets are limited. That is why we developed HST Profit Forecast. This latest product from HST Pathways completely automates the case profit estimation process by analyzing your payer contracts, historical revenues, and case cost data and then delivering a profit forecast for each case that is easy to understand and share. 

With HST Profit Forecast, ASCs can know in seconds if a case will be profitable for them. An administrator can quickly look at the case schedule and see which cases are the most and least profitable. Action can be taken to avoid or improve unprofitable cases. It might be changing an implant vendor or reducing other supply costs. If the administrator is not watching the schedule, the customized flagging rules can help the supporting staff avoid unprofitable cases.  

With HST Profit Forecast, your center can boost center profitability, reduce or eliminate unprofitable cases, and empower your leadership with data. If you are interested in a quicker way to predict case profit estimates with HST Profit Forecast, click here to book a demo with an HST expert.

Check out a quick overview of HST Profit Forecast: