Solving ASC Supply Challenges, Cost Issues With Data-Driven Decision Making
Although it is important to use technology, data and advanced practices to implement cost-reduction initiatives, many ASCs face challenges that impede them from successfully utilizing data, according to Mr. Pruitt. In order to understand the advanced practices that can drive down costs, it is important to understand the ASC market and current challenges in procurement.
The ASC market faces the following five challenges:
1. Lack of information technology. According to Mr. Pruitt, many ASCs do not have the necessary technology to keep purchasing data visible, making it harder to identify and reduce costs. More than half of surgery centers still rely on paper records for supply-chain management, 40 percent of ASCs use an inventory management system and 20 percent still track supply chain costs by spreadsheet, according to a survey conducted by Provista in 2011.
2. Limited personnel. "Many ASCs have limited personnel so the employees spend much of their day fire fighting and wearing multiple hats to deal with various priorities. The limitation on resources is a challenge," says Mr. Pruitt.
3. Lack of supply chain governance. According to Mr. Pruitt, ASCs typically lack the additional oversight that is needed to manage and formally address their supply chain — the second biggest expense after payroll. "If there are policies and procedures in place, they are often not applied," says Mr. Pruitt.
4. Minimal focus on standardization and value analysis process. There is a need for ASCs to address clinically sensitive items if they want to move toward a clinically integrated supply chain. According to Mr. Pruitt, clinicians have the expertise to standardize and add value to a supply chain process. "The voice of the clinician is needed to allow for greater adoption, better compliance and better savings," he says.
5. Loosely organized infrastructure. There tends to be a lack of policies and procedures — accepted best practices — around the supply chain in the ASC industry, according to Mr. Pruitt. "Instead of 40 different ways of managing a supply chain, there should be one best way. Adopting best practices to maximize the use of group purchasing partner contracts as well as other policies and procedures is a good way to make sure that everyone is on the same page," says Mr. Pruitt.
In order for an ASC to use data to drive supply chain and procurement decisions, it needs to address some of the above challenges.
"Using a data-driven approach to supply chain management, [ASCs] are going to achieve significant cost savings. Make this part of your strategic plan," says Mr. Pruitt. In order to use data, an ASC must start by using technology and/or a materials management information system. "Once [an ASC] has access to data, [it] can put a plan together to achieve cost-savings," Mr. Pruitt adds.
1. Technology. ASCs should adopt a common procurement technology platform, says Mr. Pruitt. "[ASCs] need to use technology to gain control and reap the benefits that come from visible data," says Mr. Pruitt.
2. Materials management information system. Mr. Pruitt recommends a materials management information system as a necessary tool to take action on efficient reduction in supply chain costs. ASC's considering this approach should look for these capabilities in a technology platform:
• Designed specifically for the healthcare industry
• Web-based and wireless capabilities
• Simple, easy-to-use internet browser interface
• Connectivity to primary suppliers via electronic data interchange, which helps surgery centers manage supply chain spend
• Affordable subscription fee vs. expensive capital outlay
• Helps surgery centers manage their total supply spend, not just commodity supplies
Mr. Pruitt closed his presentation on data-driven supply chain management by detailing some of the benefits that ASCs may see when they utilize data to drive procurement decisions.
1. Cost-savings. Visible data allows ASCs to create methodologies that accelerate cost savings. "When ASCs engage data analysis and incorporate a clinical voice, they can identify cost-savings and positive clinical outcomes," says Mr. Pruitt.
2. Improved customer service. "When [ASCs] use a centralized procurement model, there is more communication on a daily basis about back orders or any situation," says Mr. Pruitt.
3. Accounts payable efficiencies. According to Mr. Pruitt, an automated process and data in an ASC's system will reduce the amount of errors and repeat goods that are paid for. "With automation and visible data, the accounts payable team can also take advantage of discounts like early payment discounts," says Mr. Pruitt.
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