10 Key Thoughts for ASC Administrators Before Large Equipment Purchases

Michelle PunshonMichelle Punshon, administrative director for Musculoskeletal Ambulatory Surgery Center at Coastal Orthopedics & Sports Medicine in Bradenton, Fla., discusses 10 key considerations for ambulatory surgery center leaders before making a big equipment purchase. Musculoskeletal Ambulatory Surgery Center at Coastal Orthopedics & Sports Medicine is affiliated with ASD Management.

1. Find out how much you'll be reimbursed. If the equipment purchase is for a specialty or service you don't already provide, check reimbursement rates to make sure payments will cover equipment costs. "Figure out what you will be reimbursed for each procedure using the new machine," says Ms. Punshon. "You'll want to make sure that related procedures will bring in enough revenue to off-set that cost. What case volume will the new equipment bring in?"

2. Take disposables into consideration. Each procedure includes disposables, which bring additional costs to the table. "The cost of the disposables need to be considered when calculating your breakeven point with the purchase of the equipment," says Ms. Punshon. "You also want to make sure you can purchase the different kits your doctors require for the major equipment."

3. Check with GPOs for better contracts. Contact your group purchasing organization to see if they have a contract on the big-ticket items. Sometimes you'll realize a savings from their connections on the big equipment purchases as well as the small. "Make sure the sales rep knows what GPO you are a member of so you get the appropriate pricing," says Ms. Punshon.

4. Factor in preventative maintenance costs. Once the equipment is purchased, you may need preventative maintenance on the machinery to keep it running smoothly and increase its longevity. Keep these costs in mind, too. Down the road, you'll likely run into repair costs as well. Consider global costs over the long-term before deciding to invest. "Ask whether the company will be there to help you support the machine and set it up," says Ms. Punshon. "They should be available for staff in-service days to train on the equipment."

5. Cover all new and refurbished options before deciding on one. Large equipment purchases are a cost-burden, and some ASCs may be able to purchase high quality refurbished equipment for a lower cost. "There are vendors out there specializing in selling refurbished equipment, and that can be a really good deal," says Ms. Punshon. "Sometimes the vendor supplying new equipment has another line of refurbished equipment or a demo unit you can buy at a discounted rate, but it would still come with a warranty."

6. Beware of purchasing the latest fad. You don't want to buy an expensive piece of equipment that will be outdated tomorrow. Instead, focus on equipment that will last for years at the forefront of the field. "I was administrator of a urology center that purchased a laser that was used for several years," says Ms. Punshon. "You are going to invest a lot of money in it, so make sure it will be around long enough to recoup that investment."

7. Limit surgeon wish lists. Every surgeon has a "wish list" of new and expensive equipment they'd like to use at the ASC, but centers don't have the resources to accommodate everyone. "If it's a group of eight surgeons, not everyone can have their special toys," says Ms. Punshon. "Work with all surgeons to build a consensus about which purchases make the most sense."

8. Achieve product line continuity. Purchase the new equipment from a vendor or product line familiar to all ASC surgeons. "You'll want to have some level of continuity between the group and a product line so all surgeons are familiar with using the equipment," says Ms. Punshon. "It's also easier for staff if everyone is using the same products for procedures; you don't want every orthopedic surgeon using a different arthroscope."

9. Conduct staff and surgeon training. Think about workflow with the new equipment and what resources it will take to actually implement in the practice. Time and energy will be spent learning to use the new equipment, and the procedures will likely take longer in the beginning until staff and surgeons learn to become more efficient. "Research what training is needed and available for staff," says Ms. Punshon.

10. Benchmark with other centers that already have this service line. Before purchasing the equipment, talk to administrators and physician leaders at centers already using this equipment and use their benchmarks to project your future success. "Ask these other administrators about their experience with the equipment, maintenance and longevity," says Ms. Punshon. "You don't want to start a service if the equipment goes down a lot; you want it available all the time. Network with your peers in the area to see what they think before moving forward."

More Articles on ASC Issues:
10 Steps to Immediately Improve Surgery Center Profits: Cost Reduction & Benchmarking
3 Myths of Out-of-Network Reimbursement
Can Recovery Care Centers be Financially, Legally Viable for ASCs?

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