8 Reasons for Surplus Surgical Supplies in Hospitals and Surgery Centers
West Coast Medical Resourcesis preparing for a busy year in 2012. After 12 years of running a "one man show," CEO and founder Randy Ware decided to expand his company in 2009 by assembling a strong team. By April, WestCMR will staff 20 employees and move into a new, 16,000-square-foot facility in Clearwater, Florida.
Since 1997, WestCMR has purchased surplus surgical supplies from hospitals and surgery centers across the U.S., lessening the burden of surplus inventory on materials managers. While surgical facilities typically deal with excess inventory three to four times a year, Mr. Ware says most just don't have time to consistently address this issue and too often perfectly viable surgical supplies lose most of their value. In some cases, facility staff members want to believe they will find "other" facilities to buy up their surplus, but history has proven in more cases that not that other materials managers "don't want to deal with anyone else's problem."
In the end, a secondary distributor of surplus surgical supplies is often the best option. "Companies like WestCMR are not always the best option economically, but we are the absolutely the most efficient and fiscally responsible option," Mr. Ware says. "In a nutshell, it’s our mission to help people figure this out sooner than later."
Surgical surplus occurs for a number of reasons, Mr. Ware says. Here he outlines eight ways surgery centers end up with excess inventory.
1. Strict return policies. Original equipment manufacturers generally do not like taking product back, Mr. Ware says. Strict return policies imposed by these OEMs and traditional distributors can work against surgical facilities and negatively impact budgets.
2. Surgeon preferences change or a surgeon departs. Surgeons may decide they prefer another OEM's products over the supplies they have been using. If your facility has inventory of the previous product, you are often stuck with an odd assortment of supplies. This is a very common occurrence since surgeons are constantly targeted by sales representatives showing off the newest surgical supply.
3. Unused custom pack components. Surgical facilities often opt for custom packs to save money and time ordering supplies for a particular procedure. However, if you order custom packs without checking that you need every item included, you may end up wasting surgical supplies by leaving them on the shelf every time a pack is opened.
4. Poor inventory management and stock rotation. Surgical facilities face constant fiscal pressure to maintain "just in time" inventory and tight par levels. This can lead to lots of "onesies" and "twosies" that never get used. In addition, employee turnover and a host of other factors can leave surgical facilities with shelves full of supplies that constantly get pushed aside. Simple ordering errors can also be overlooked for months and lead to shelves full of products that won't be used and can't be returned to the distributor.
5. Discontinuance of surgical procedures. If your facility stops performing a certain surgical procedure, all the supplies for that procedure will become useless to your facility. Even if you think you may recruit surgeons to start performing the procedure again, the likelihood is that technology will change or the surgeons will not want or have the proper training to use the products in your current inventory.
6. Product enhancement or improvement. OEMs regularly release "new and improved" versions of existing products to keep their competitive edge and consistently improve upon their technology. This means your surgeons will frequently insist on the newer products and decline to use up the old inventory.
7. Sales representative turnover and pressures.
8. Contract changes. GPOs and IDNs are doing fantastic work with their OEM partners to negotiate pricing and service contracts that can lead to future savings in healthcare costs by reducing supply costs. However, these contracts typically do not address what to do with the existing or leftover inventory.
Learn more about WestCMR.
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