Maximize your ASC's OR supply chain

Ambulatory surgery center leaders face the challenge of reducing costs while increasing patient volume and offering high-quality service.

During a recent webinar sponsored by Cardinal Health, Bilinda Garlock, RN, BSN, manager of clinical operations of ASCs at Cardinal Health, and Marvella Thomas, senior consultant of clinical operations of ASC national accounts at Cardinal Health, identified waste and offer strategies for ASC leaders to manage operating room inventory.

Run-down of numbers
The average ASC supply costs account for 17 percent to 25 percent of an ASC's net revenue1, with 25 percent of clinical staff time allotted for supply chain activities.2

"While supply cost pressures are a concern, so too, is the average ASC's overall financial health," said Ms. Garlock. And ASCs face several financial challenges in the industry, today. Paid almost 50 percent less by CMS for the identical service performed in a hospital outpatient department, ASCs are also burdened by falling reimbursements.3

"While the financial pressures loom large for ASCs, the opportunity is great," added Ms. Garlock. "The fact is that patients often prefer ASCs over hospitals, which can be overwhelming and hard to navigate. In contrast, ASCs can be more convenient, have better service and feature lower out-of-pocket costs."

OR supply management
To offset profit cuts due to falling reimbursements, successful ASCs will strategize ways to limit waste by managing OR inventory.

The first step in OR supply management involves uncovering your ASC's supplies and pinpointing duplicates. Often, the OR core area, specialty carts, case pick areas, case carts and bulk storage areas house the exact same supplies. Ms. Thomas noted the same supplies can often be found in seven or more locations.

"To uncover the waste, we first have to recognize that supplies are duplicated in many areas," said Ms. Thomas. "Multiply this number by inventory dollars per operating room and the financial impact becomes overwhelming."

To cut costs, ASCs should consider approaching supply management differently. But, managing OR inventory is no trivial task, presenting the following challenges:

  • Diversity of procedures
  • Physician preferences
  • Typical practice issues
  • Limited data
  • Preference card management 
  • Duplication of supplies 
  • Lack of automated inventory control systems
  • Multiple categories of OR supplies

Surplus of supplies
Across the nation's ORs, little consistency exists regarding supply costs. Most ORs contain a surplus of supplies so surgeons may always access desired products.

"Rarely would anyone run out of supplies in the operating room, because historically the practice has been 'just-in-case,' which is placing one on the shelf and one in the drawer, just in case it's needed," Ms. Thomas added. This "just-in-case" purchasing practice undoubtedly drives up costs.

"Responding to physician preference requests demonstrates to surgeons that the facility values them, respects their time, cares about their patients and wants them to have an efficient environment in which to do their work," said Ms. Thomas. That said, many supplies are clinically equivalent, and ORs should standardize as much as possible.

Product standardization proves even more arduous in ASCs. When recruiting a physician, an ASC often makes promises without discussing actual costs.

"This is a disconnect that should be addressed with both business development and the materials managers and administrators," Ms. Thomas said.

Inventory management is further muddied by the following complications:

  • Lack of data to support inventory levels
  • Perioperative nurse opens everything on the preference card to ensure the surgeon has what he or she wants
  • People who do not know the operating room are making purchasing and distribution decisions
  • Lack of integration between materials management and surgical services
  • Unestablished PAR levels
  • Perioperative nurses are trained to take care of patients, not manage inventory
  • Materials manager may be under-valued by clinical team

"And in some facilities, materials managers may be required to function as clinical staff on a frequent basis, giving them less time to manage the inventory they were hired to manage," Ms. Thomas added.

Leveraging data analysis
Many ASCs don't possess data on supply usage, inventory level, product duplications and procedure cost by physician. Without this quantifiable data, ASCs will be hard-pressed to implement processes to enhance OR inventory management.

"Plus, the method of collecting data is still manual in many ASC ORs. This lack of technology is hindering the ability to accurately determine where you are regarding annual spend, inventory and turns," said Ms. Thomas. "As a result, it's more difficult to set realistic goals."

Data analysis would especially improve preference cards. Since most ASCs have handwritten preference cards, material managers have no way of gathering data on supply consumption.

"Without the visibility that data analytics can provide, it's difficult, if not impossible, to align inventory levels with actual product usage," Ms. Thomas explained.

Maximizing your inventory
The first step to improving your supply chain management involves building a team of ASC leaders, material managers, physicians and perioperative clinical staff.

"It's critical to educate stakeholders. And accessing and presenting the facts is the first step in addressing the problem," added Ms. Garlock.

Once you have your team onboard, take back control of your ASC's inventory by exploring the following:

  • Product consolidation: ORs contain a surplus of “like” commodity products, such as bouffant caps. Consider consolidating these types of products from three vendors to one. Another quick-fix involves combining individually pulled products into either standard or custom procedure-specific kits or packs. Review pack program annually for item changes, waste elimination and practice changes. 
  • Product consignment: Discuss consignment opportunities with vendors for costly products, like orthopedic and spine. 
  • Product standardization: Only 34 percent of ASCs utilize product standardization, even though it is a proven cost-saver4. Begin standardization with products which possess little clinical sensitivity, such as drapes and gowns. 
  • Product flow and vendor access process: An unregulated flow of products and vendor access can disrupt your supply chain. To prevent this, establish a policy for new product entry and create a multidisciplinary committee to oversee requests for new products.

Ms. Garlock also recommended integrating critical clinical practices into the strategy to drive out waste, such as selecting the right product for the right task; choosing the appropriate gown; exploring the elimination of over draping practices; and transitioning to lower cost product alternatives.


  3. CMS – National Healthcare Expenditure Annual Growth 2015


Listen to the webinar recording here, and view the webinar slides here


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