5 orthopedic-driven ASC supply chain management trends

Flower Orthopedics — maker and manufacturer of the innovative Flower Cube for orthopedic implants — and supply chain giant McKesson Medical-Surgical teamed up recently in a new partnership poised to take on the traditional orthopedic distribution model for ambulatory surgery centers.

"Orthopedics is a very complex business and can be very difficult for surgery centers to manage and control. From juggling multiple implant trays to deciphering vendor pricing, orthopedics can be very inefficient, something that surgery centers cannot afford, which is why McKesson and Flower Orthopedics together is so compelling. With Flower, we combine a disruptive product solution with a proven distribution infrastructure to addresses key customer needs: 1) simplify the supply chain and deliver the right product at the right time, 2) offer transparent pricing and 3) provide a best-in-class customer experience — all of which result in savings and efficiencies," says Mike Waldman, Senior Manager, Surgery Centers Marketing at McKesson Medical-Surgical. "Our collaboration with Flower Orthopedics is quite different for a traditionally direct vendor market. You don't see a lot of relationships like these right now, but depending on the timing and the market I think it's a potential trend for the future."

Flower's cube concept is a new innovation in a mature market where ASCs can purchase commoditized implants at wholesale prices. Here are five key trends in ASC supply chain management:

1. Rep-less models are king. Traditional supply chain models rely on sales representatives which add expense to the case. New company models, as exemplified by the Flower-McKesson partnership, forego the sales representative and give supply chain control back to the center. The prices are transparent and there are no hidden fees.

2. Open space in the supply closet. A crowded supply closet leads to clutter and expiring materials, which has a negative impact on the center's bottom line. "If you are a high volume surgery center that has 25 instrument trays sitting in your storage room, that's a problem," says Mr. Waldman. "A solution like the FlowerCube™ can help create a smaller footprint of space. And with McKesson's next-day delivery service, you only need enough product for that day of surgery."

3. Customization is key. The FlowerCube™  can be customized based on surgeon preference so only the items needed are included. "Flower and McKesson sales representatives will help optimize a surgery center's FlowerCube™  by meeting with the physicians and determining what plates and screws they need for their procedure type," says Mr. Waldman.

4. Automation makes the process easier. Automation is taking over healthcare and supply chain ordering and management is no exception. Now companies have online platforms like McKesson's SupplyManager which allows ASCs to search for their device and place an order within minutes. "All of Flower Orthopedics' products are integrated into our SupplyManager website, which is more than just a supplies ordering portal. For example, a multi-site surgery center can develop formularies of common implants and use expense management tools — providing more insight and control into their orthopedic spend than ever before," says Mr. Waldman.

5. True partners create efficiencies with a streamlined approach. Device companies and manufacturers are looking to partner more closely with ASCs to really help their business run better. In the materials management arena, streamlining the ordering process helps the center run more smoothly and provides cost-savings. "You have one invoice coming from one source with all the medical-surgical, pharmaceutical and implant supplies. This helps play a major role in driving additional ASC efficiencies."

This article is sponsored by McKesson and Flower Orthopedic.

More articles on surgery centers:
Rapid anesthesia M&A activity in 2014: A recap

6 things to know about the New York ASC market

100 ASC benchmarks to know—2014

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