5 Ways to Reduce Supply Costs at Your Orthopedics-Driven ASC

Here are five ways orthopedics-driven ASCs can drive down supply costs.

1. Work with vendors to lower costs on orthopedic devices. Jaime Wilber, director of nursing at Ashtabula (Ohio) Surgery Center, says working with a knowledgeable representative from a vendor company allowed her ASC to add a hip arthroscopy procedure in a cost-effective manner. This also gave the nursing staff a chance to learn how to use the equipment through hands-on tutorials with vendor representatives, rather than leaving staff members to spend precious time learning how to use it on their own.

"We called the vendor, who gave us a great break on the prices of the instruments we needed for the procedure," she says. "They came out and talked with our nurses, who would be assisting in those cases, to show them how to use the instruments and also came on the day of scheduled hip arthroscopy surgeries in case something might go wrong with the equipment. The key is we only contact vendors that are knowledgeable and trained in the specialty and in the equipment they work with, and we won't talk to any vendors that aren't."

2. Stay updated on trends in the device industry. John Cherf, MD, president of OrthoIndex, says although the cost of orthopedics-related supplies, such as implants and other devices, continues to rise, orthopedic-driven ASCs could combat this by learning more about the device industry, as well as effectively coding and managing the cost of orthopedic devices. Orthopedic-driven ASCs can also manage costs by consulting third-party orthopedic technology management specialists.

"A third-party firm can educate ASCs that don't have the experience or knowledge to capture appropriate pricing," Dr. Cherf says. "These firms can help propagate buyer power, develop and manage supply chain contracts, leverage provider alignment, maintain compliance and much more."

3. Consider consignment agreements for implants.
Julie Martin, assistant vice president for surgical services for all three campuses of HealthOne in Denver, says consignment agreements have been critical in reducing implant costs.

"Most healthcare venues don't want to carry an overhead of implants, so having the ability to have consignment and have vendors help us with managing consignment is critical," she says. "For instance, for our total knee implants we are not going to carry a whole line of those from five vendors. We expect them to come in and provide the product as we need it; otherwise huge dollars are tied up in inventory."

4. Understand a good benchmark range for dollars of inventory on shelf. Kathleen Whitlow, chief operations offer for Blue Chip Surgical Center Partners, says a range for dollars of inventory on the shelf of an orthopedics-driven ASC will vary based on case volume and whether the ASC has implants brought in case-by-case or keeps them on the shelf.

"The benchmark is center-specific," she says. "A really well run orthopedic-driven ASC keeps a minimum on the shelves, uses consignment or has the representatives bring in what is needed on a per case basis. Our average for orthopedics inventory shelf dollars is about $50,000-$75,000 for ASCs doing 300 cases a month."

5. Customize pre-packages. Most GPOs allow surgery centers to customize pre-packages, which would include supplies needed for any one procedure. This allows the surgery center to cut back on wasted supplies and related costs.

"We just customized pre-package trays for knee arthroscopies," says Steve Smith, director of Surgery Center of Wisconsin Rapids. "In these pre-packages, there should be everything you would need in order to perform a knee scope. By going through the packs and customizing it, we're able to lower cost by 10-15 percent without affecting patient safety or patient outcome. You always have to see if changing supply will affect either of those in any way."

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