Episode Overview:

In this episode of Value-Based Care Insights, guest Jeff Peters, President and CEO of Surgical Directions, provides insight on the financial impact that COVID-19 has had on perioperative services. He shares with Daniel J. Marino and Shaillee J. Chopra why organizations must focus on building stronger ambulatory programs while pushing for higher patient engagement.


Daniel J. Marino
Daniel J. Marino, Managing Partner, Lumina Health Partners

Shaillee Chopra
Shaillee Chopra, Principal, Lumina Health Partners


Jeff Peters. President & CEO, Surgical DirectionsJeff Peters, President and CEO, Surgical Directions

Episode Discussion Areas:

1. Framing the problem

  1. 65% of a hospital’s margin typically comes from perioperative services.
  2. During the high impact of COVID, hospitals saw their elective surgical volume decrease 60%-90%, thus impacting their revenue and overall margins.
  3. Hospitals have seen volumes return, but are still trailing pre-COVID levels.
  4. Hospitals are seeing a shift in site-of-service from inpatient to ambulatory.
  5. Hospitals need to take a keen note of all the potential margin due to inefficiencies in clinical operations, provider engagement, and proper patient engagement.

2. Enhancing perioperative financial performance

  1. Improvement activities include performing appropriate patient engagement with surgical pre-certifications/pre-authorizations, informing patients on the clinical expectations (even more important during the COVID pandemic), advising patients on their financial obligations, and performing proper post-surgery follow-up.
  2. Considerations are given to the shift in site-of-services (inpatient to ambulatory), locking in reimbursement rates with managed care contracts, and operational efficiencies in the front-end registration and revenue cycle activities.
  3. Perioperative governance is key; surgeons need to lead the process around efficiencies and reductions in clinical variation.

3. Managing surgical activities during this fall’s potential COVID surge

  1. Hospitals must learn from their experiences last spring – reducing elective procedures is not the answer, but they need to manage COVID as another factor of surgical consideration.
  2. Incorporating COVID screening as a component of pre-surgical testing is a requirement.
  3. Build trust with patients that is focused on engagement (telehealth visits), screenings and establishing expectations.
  4. Emphasize surgical services in a safe, efficient manner.
  5. Negotiate appropriate surgical reimbursement levels with payers, especially if more patients are shifting from inpatient to ambulatory.
  6. A continued focus on perioperative efficiencies and reductions in clinical variation will allow hospitals to maximize their perioperative financial performances.

4. Key takeaways and other impact drivers

  1. Engage the patient to build trust – screening for COVID, utilizing telehealth services, set expectations clearly and transparently.
  2. Compensation alignment with physicians is important but creating incentive-based compensation for the nurses is equally important.
  3. Ensure surgeons lead the perioperative process and focus on performance indicators tied to operating room (OR) efficiencies.
  4. Focusing on improvement with perioperative services can result in very large financial benefits.

Jeff Peters
7 Key Takeaways: Optimize Surgical Performance to Improve Post-COVID Financial Woes

  1. Hospitals must maximize perioperative services to recover lost revenue.
    • Many hospitals saw elective surgical volume decrease upward of 80% during COVID, and while volumes are increasing, those levels are still trailing pre-COVID levels. Organizations must increase revenue, reduce or manage costs, and improve margins — and perioperative services can help do that.
  2. How can organizations advance their ambulatory surgery programs?
    • One way to increase those services is by engaging surgeons and physicians and asking them to have the surgeries performed at an ambulatory service center (ASC). Also, it is critical to provide a positive experience for surgeons and patients and make them feel comfortable. Having patient engagement scores above the 90th percentile can grow ASCs’ margins.
  3. How can you ensure the shift from inpatient to ambulatory improves revenue opportunities?
    • The shift to ambulatory services is essential to revenue opportunities, so you’ll want to ensure you’re getting the right level of reimbursement for ambulatory visits and procedures, including telehealth. You’ll also want to create the right level of workflow efficiencies and structure to handle the increased volume. Additionally, it’s critical to ensure a great physician and patient experience while at the facility and even during recovery and rehab — that’s the key to maximizing volumes.
  4. Rebuilding trust will also be key to improving revenue.
    • One reason volume hasn’t returned to pre-COVID levels is that trust during patient engagement hasn’t been instilled. Ensuring you’re incorporating screening activities around COVID and reinforcing that you’re doing all you can to offer a safe environment will go a long way toward building trust.
  5. How can you also ensure surgeon and physician engagement?
    • Make sure you have the right incentives to drive performance and are compensating physicians based on financial productivity and not RVUs. You’ll also want a governance body for your perioperative services—one dominated by a range of surgeons. Give them feedback on their case time and how they’re performing to help you meet their needs and allocate resources appropriately.
  6. How is creating efficiencies going to impact costs?
    • You’ll want to review labor and supply costs and ensure surgeries are performed efficiently without haste. You can analyze prices, see the supplies that are being used, and compare prices with other surgeons. If you can show you’re getting better results and better engagement, you can show you’re providing more value — and that results in higher reimbursement from many of the payers.
  7. What is the healthcare leader’s role in all this?
    • It’s to understand that you’re including value in the equation that requires physician engagement. That means you need to involve physicians in planning the ambulatory surgery strategy, align incentives, and give feedback on how they’re performing and where they can improve.

New call-to-actionAbout Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasing value-based care payment environment. Hosted by Daniel J. Marino and Shaillee Chopra, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners.

Daniel J. Marino

Podcast episode by Daniel J. Marino

Daniel specializes in shaping strategic initiatives for health care organizations and senior health care leaders in key areas that include population health management, clinical integration, physician alignment, and health information technology.