5 Steps to Realize Huge Savings on Supply Costs at ASCs
In a webinar titled "What Can You Do On Monday to Lower Your Supply Costs" Chris Klassen, Vice President of Supply Chain for Surgical Care Affiliates, discussed the most important factors for lowering supply costs at surgical facilities. Ambulatory surgery center administrators must understand product utilization in the operating room as well as supply contracting to comprehend overall costs and realize savings.
"First, we recommend focusing on the highest cost, high variable cases," said Mr. Klassen. "Supply utilization and contracted pricing helps drive the best cost per case and provides a clear direction on driving savings."
Across SCA facilities, data shows the typical profit per case for ACL repair at $18, but after optimizing supply costs centers realized $35 profit per case on average. "The ability to control utilization on these cases with supplies based on the best-in-class analytics has a tremendous potential to impact profitability at centers," said Mr. Klassen.
However, administrators must consider physician preference products and work with physicians to change their behavior. There can be rebate opportunities available to lower costs when possible. "It will be critical to dive deep into surgical packs," said Mr. Klassen. "Spend across doctors is also extremely varied on items outside of the packs."
Here are the five steps Mr. Klassen discussed to conduct a case analysis that will identify key factors for lowering supply costs.
1. Initiate a kick-off. Hold a kick-off for the program to educate physicians and staff about the case analysis and engage your team to meet cost saving goals. Appoint a physician champion to lead the efforts. "This helps lend creditability to the activity we intend to perform at the facility," said Mr. Klassen. "The best way to change behavior is the peer-to-peer discussion."
The physician champion should be someone who can best influence other surgeons in the group to make the change. "Make sure everyone is aligned and there is a timeline for starting and stopping," Mr. Klassen said.
2. Perform the case data analysis. Examine the case data information, including physician preference cards, to identify the supplies used. Make sure the supplies indicated on the preference cards are the actual supplies still used by cross checking with the physician's purchase history over the past six months.
Companies often list the items in each pack; if that information isn't readily available, ask the device representative. "Figure out what is necessary to accomplish rebates and make sure the preference cards are aligned with the purchase history," said Mr. Klassen. "You'll start to see purchasing trends as you compare items."
3. Data validation. It's important for everyone to agree the data is credible. After gathering important information, reach out to the surgeons and operating room staff to verify all the information is correct. You can also visit the operating room and observe the process.
"We now take our preference cards and create a spreadsheet documenting what each surgeon does," said Mr. Klassen. "We review with staff to make sure we aren't forgetting anything. Then we finalize a supplies-used list."
4. Opportunity analysis. After all the data is gathered and verified, compare the physicians among each other and with outside benchmarks to identify the "best-in-class" and figure out how outliers can reach those numbers. You can categorize the preference cards based on what is inside and outside of the pack and examine trends between physicians who perform similar cases.
"You can calculate the opportunities for cost savings and identify the low-hanging fruit," said Mr. Klassen. "Know what the prices are to see opportunities to reduce the cost in packs. Categorize the items listed for each doctor to see the cost per case for each surgeon and compare it against the best-in-class. The result is savings."
5. Surgeon engagement. It's crucial to engage surgeons — especially outliers — to participate in cost-saving opportunities. Physician champions or other surgeons at the center are often the best people to bring their colleagues on-board. "We've found that the best way to talk with our surgeon partners is to tailor our message for that audience," said Mr. Klassen. "We meet with the surgeons individually and then as a whole team in a comfortable offsite environment."
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