Digging Into the Numbers

Conversations | Discussions with the President

Digging Into the Numbers

David Young talks to PE GI Solutions Executive Vice President of Finance Tara Hamburger

PE GI Solutions President and CEO David

Young sat down with Executive Vice President of Finance Tara Hamburger to discuss financial trends and issues facing GI practices and ambulatory surgery centers (ASCs) today. Below, they dig into a number of issues affecting the GI industry, such as the impact of COVID-19, inflation and more.

David Young (DY): How did the COVID-19 pandemic impact the bottom line? Are physicians still feeling the financial ramifications of patients who delayed care? Tara Hamburger (TH): Practices and centers are certainty still feeling the effects of the pandemic. One of the results of patients delaying care is a big backlog, which is a good thing, since there are so many people searching for care. At the same time, however, you only have so much time in the day to see patients. Locations dealt with staff taking vacations throughout the summer, for example, which can limit how many patients can be helped. It’s so critical that physicians can see patients at a strong volume, because the more patients you can see in a day, the better your bottom line is going to be.

DY: What about patients? How are they impacted?

TH: Patients are impacted by all the rising costs, including gas prices, food, etc. There is a lot of price pressure everywhere, which might prevent a patient from scheduling an elective procedure. This is a very bad side effect of the cost pressures because this could delay lifesaving healthcare. With costs rising, it is important to shop around for healthcare options. Patients will find that ASCs have a much lower cost of service, so they are a better alternative to the hospital setting.

DY: How are issues such as supply chain delays and inflation impacting practices and ASCs? TH: Costs have certainly gone up for everyone across the board. You’re getting squeezed from your vendors because costs have risen, and they pass those raised prices on to purchasers. Compensation costs have also gone up due to the inflation we’re seeing right now, and that stretches all the way from current employees to hiring new ones. The result of these increases is squeezing on profitability and the bottom line, so you must do something to offset those factors. To do that you may need to improve your efficiency by seeing more patients per day or working longer hours. Of course, taking steps like working longer hours, for example, have their own costs associated since you need to pay employees more for the extra work.

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“The result of [cost] increases is squeezing on profitability and the bottom line, so you must do something to offset those factors.”

—Tara Hamburger

DY: Changes in reimbursements and payor rates are also playing a factor in practice or center profitability. How do those aspects affect the bottom line? TH: That can be a huge factor when looking at a location from a financial perspective. Here at PE GI Solutions, we have a payor contracting department that is working to constantly negotiate the best rates for our partners. However, the only way to combat that in the expense department— the bottom line—is to increase productivity—the top line. By working to showcase the need for higher productivity we can work to bring the level of profits back to where they should be.

DY: It seems as if these high levels of inflation may continue. How can practices plan for the future? TH: With the vendors passing on the increased rates there’s not too much we can do, but we can try to help. We want to help the owners and physicians understand the increase and where they need to be from a revenue perspective. I think it all comes down to productivity because you can’t control the cost of inflation. This is where financial reporting becomes really important.

When we look at these reports, we can say, “Your costs are going to go up 2% next year, so let’s consider adding an extra procedure per day to combat that.” I feel it’s easier to see and explain these changes year-to-year by looking at the numbers on a piece of paper or on a screen versus just talking about it.

Everybody’s costs are going up, and that’s why it’s so important to break things down to a procedure or productivity

level. We will show owners or physicians how each procedure impacts their business. It can be a valuable tool and help drive the point home: The importance of considering seeing more patients in a day or working longer hours. It may just seem like we need “X” revenue, but when you really look at the numbers, it may come out to only being a couple more procedures a day.

DY: How can patients become best prepared for the higher costs of care? TH: Patients need to understand their health benefits coverage. They don’t want to be surprised at the visit by the cost (copay, deductible, etc.). If the patient responsible amount is not provided by the facility upfront, the patient should ask so they are aware.

Another tip would be to know when your health benefit coverage renews. All costs are increasing, including insurance premiums and costs for service, so it might be best to schedule a procedure before the renewal period to avoid cost increases and plan for procedures at the end of your renewal period once deductible limits are satisfied to save on costs.

Learn more about our influential leaders. Turn to page 4 of this issue to read about the backgrounds of Tara Hamburger and the rest of the PE GI Solutions Senior Leadership Team. For more great insight from our industry experts and to learn how PE GI Solutions can help your practice or ASC, visit pegisolutions.com.

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