Opening a Window of Opportunity: Outsourcing Procurement at Surgery Centers

On Oct. 29, Jon Pruitt, MHA, CMRP, vice president of procurement at Provista, presented a webinar on the supply chain benefits ambulatory surgery centers can realize from outsourcing procurement.

Cost savings are paramount in a healthcare environment of inflation and declining reimbursement. Surgery centers have regularly been outsourcing many services, including housekeeping, pharmacy and billing. "Procurement management is now a hot sector," said Mr. Pruitt. However, the current state of supply chain operations at surgery centers is fragmented. A limited amount of personnel, lack of information technology and minimal governance splinter supply chain management.

A supply chain business partner can help surgery centers expand control of supply chain operations and management. "Outsourcing procurement often incorrectly correlates to a loss of control. The ASC leaders are still making all of the purchasing decisions. A partner just ensures it all goes smoothly," said Mr. Pruitt.

There are a number of models to choose from when working toward improved supply chain operations and management. Surgery center leaders who choose to focus on developing internal capabilities will hire specialized labor, create a management system and maintain a disciplined approach throughout the entire supply chain process.

The next model, a step up, involves the application of technology. Currently, more than half of ASCs maintain paper records for supply chain. At many other centers, a practice management system doubles as a way to track supply chain. "A pure materials management system is the best way to achieve success in improving supply chain," said Mr. Pruitt. A system focused solely on supply chain will have inventory control, case costing, stock-out reduction, overpayment reduction and inventory expiration avoidance capabilities. A supply chain system can save hours of work each day.

"You have all the technology that will help you be more effective, and the savings will more than pay for the technology," said Mr. Pruitt.

The final model involves partnering with a procurement outsourcing company. While internal controls and technology are beneficial, outsourcing gives ASC leaders a helping hand throughout the process. "You are plugged into a wealth of knowledge and resources," said Mr. Pruitt.

This access allows surgery centers to implement cost-saving strategies. Data serves as the foundation of cost savings. With captured and accurate data, ASC leaders can ensure correct contract and distributor pricing, move toward product standardization, gain best possible pricing through aggregation of volume, analyze case costing, begin clinical integration into the supply chain and reduce waste.

Procurement partners can also help surgery centers maximize the advantages of reprocessing, which can lead to a 50 percent reduction in costs. Perhaps most importantly, procurement partners can enhance the benefits of a relationship with a group purchasing organization. The partner will regularly reach out to GPO partners, review contracts and work toward taking full advantage of cost savings.

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More Articles on Supply Chain:
5 Ways Materials Management Information Systems Can Improve Surgery Center Supply Chain
6 Tips for Working With Physicians on Preference Items
4 Steps to Efficient Surgery Center Supply Management & Control

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