Lori Pilla, RN, vice president of the clinical and supply chain operations program at Amerinet, discussed fiscally responsible materials management at the Becker's 20th Annual Ambulatory Surgery Centers Conference, held Oct. 24-26 in Chicago.
Some of Ms. Pilla's strategies for profitable materials management include:
1. Engage surgeons. ASCs should know their surgeons' preferences before establishing supplier contracts so they can implement contracts without confrontation. "Where physician preferences conflict with your contract, you'll have a harder time staying profitable," said Ms. Pilla.
2. Know where you can aggregate spend. Ordering materials in large volumes can and should add up to discounts. ASCs should try to aggregate materials volumes in a way that allows them to leverage discounts. In addition, committing to a supplier and complying with any agreements may encourage suppliers to discount ASCs they see as particularly committed to their products.
3. Establish supplier partnerships. "Suppliers can be good partners in their common goal to remain viable," said Ms. Pilla. The most important thing ASCs can do in establishing supplier partnerships is identify suppliers with depth in their supply portfolios. This can let a given ASC limit the number of suppliers it does business with. "Commit to the supplier, and they'll commit to you," said Ms. Pilla.
4. Limit Inventory. Having more than two weeks of inventory on hand is wasteful and unnecessary. ASCs should only keep what they need on hand. With good materials management, running out of materials will never be a possibility.
5. Know your physician spending. A good strategy to do this is to track average cost per case and cost per surgeon on a monthly basis. Share the results among the practice, even if in a blind report. Outlier physicians should know what the spending and cost expectation is, and it is the job of ASC administrators to help them meet this.
"There are currently 5,000 plus licensed surgery centers. That number will be reduced by 25 percent in the next few years from acquisitions and facility closings as a result of the Affordable Care Act," said Ms. Pilla. "By tracking your costs and monitoring your inventory, you will be less likely to lose independence or go under."
Some of Ms. Pilla's strategies for profitable materials management include:
1. Engage surgeons. ASCs should know their surgeons' preferences before establishing supplier contracts so they can implement contracts without confrontation. "Where physician preferences conflict with your contract, you'll have a harder time staying profitable," said Ms. Pilla.
2. Know where you can aggregate spend. Ordering materials in large volumes can and should add up to discounts. ASCs should try to aggregate materials volumes in a way that allows them to leverage discounts. In addition, committing to a supplier and complying with any agreements may encourage suppliers to discount ASCs they see as particularly committed to their products.
3. Establish supplier partnerships. "Suppliers can be good partners in their common goal to remain viable," said Ms. Pilla. The most important thing ASCs can do in establishing supplier partnerships is identify suppliers with depth in their supply portfolios. This can let a given ASC limit the number of suppliers it does business with. "Commit to the supplier, and they'll commit to you," said Ms. Pilla.
4. Limit Inventory. Having more than two weeks of inventory on hand is wasteful and unnecessary. ASCs should only keep what they need on hand. With good materials management, running out of materials will never be a possibility.
5. Know your physician spending. A good strategy to do this is to track average cost per case and cost per surgeon on a monthly basis. Share the results among the practice, even if in a blind report. Outlier physicians should know what the spending and cost expectation is, and it is the job of ASC administrators to help them meet this.
"There are currently 5,000 plus licensed surgery centers. That number will be reduced by 25 percent in the next few years from acquisitions and facility closings as a result of the Affordable Care Act," said Ms. Pilla. "By tracking your costs and monitoring your inventory, you will be less likely to lose independence or go under."