Cost Cutting at ASCs: Best Initiatives From ASC Leaders

Here, three ambulatory surgery center administrators and managers discuss their best ideas for cost cutting initiatives.

Karen Howey, CASC, Administrator and CEO of Macomb Township (Mich.) ASC: We formed a Savings Value Analysis Committee that meets quarterly and is comprised of our materials manager, our [central processing department] person, at least one scrub technician and one operating room registered nurse.

This committee discusses possible cost savings ideas and areas to focus on, from new products to a new surgeon who has come onboard requesting costly items to changes we can make in our everyday routine. Getting the staff focused on the problem, making them aware of costs and giving them time, set aside, to work on it has had a huge [impact] on the education and results of this committee.

Our materials manager 'rounds' on our top vendors and physicians monthly. She makes it a point to sit down and discuss new items available, better cost savings through trialing a product or changing products with the physicians. She is also constantly asking the vendors about what is on the horizon that is cheaper and how can we improve what we are already have.

Our materials manager also reviews our custom packs biannually to see if there are items that can be removed, thereby reducing the cost, or identifying items that we can drop for the cases and get cheaper because they are not used as often as they were when the packs were created. She also analyzes any standing orders with the packs to see if volumes have adjusted and makes changes as necessary.

Last year we also switched to a third-party whole seller for our hernia mesh. This vendor sends out a list of meshes they have available at reduced costs and we can find savings by picking up several of our needed stock by not ordering everything straight from our main vendor.

Finally we are constantly looking for any and all reprocessing opportunities. We check, again biannually, to see if there are new items we can reprocess that we are not currently doing. We added some ENT items last year that resulted in thousands of dollars in savings. The caution here is to make sure the reprocessing company you chose meets all the required standards.

Luann Lamb, Manages Supply & Equipment Orders, Texas Orthopedics Surgery Center (Austin): With fluctuating drug prices and availability, having three to four sources for pharmacy purchases saves money. With many drugs being on back order, you can usually find one vendor who is still sending out product.

Keeping a list of vendors and pricing for each drug gives you a quick reference and you can move down the list and find the best price.  Many times you see a large price difference between the different vendors. At one time we were ordering all of our drugs from one vendor. Having multiple sources can save us up to $1,000 on a weekly order.

You should also keep track of minimum orders for each vendor. It does not make sense to order a 25-pack of lidocaine that saves you $10, if you are paying a $15 minimum order fee. These savings help to offset cost when you have to pay higher prices for alternate products because of national back orders.
Using two GPOs with two different vendors has also saved us a lot of money. The time it takes to go through your inventory and get pricing from each vendor is well worth the savings. I found savings of more than $8,000 over a one year period on supplies that are ordered every week. You can see trends — where one vendor has better contracts with different manufacturers. Over $1,500 was saved in changing our vendors for syringes and needles alone, and we are getting the same product.
We use primary and secondary vendors for our implants so I know when I need to replace or add an instrument set, and I can usually go to my vendors and ask for a deal. I agree to purchase a number of implants up front and the vendor gives us the instrument set for free. I will only agree to this if I know we can use the implants within one quarter so I do not have product sitting on my shelf. We are not spending any more money than we would have and we add instrumentation to our inventory.

Anne Roberts, Administrator, Surgery Center of Reno (Nev.): The motivation [behind the cost saving strategy] was three-fold. First, to improve the quality of services provided and physician and staff satisfaction. Second, to decrease operating costs. And third, to improve professional development and expertise of staff.  

A quality improvement committee was formed led by an operating room staff member who had a true understanding of the initiatives and processes necessary to achieve results.  The STAR (Surgery, Tactics and Recognition) committee included OR staff and leadership that worked together towards the goals. We methodically went through service lines with a standardized approach, looking for opportunities for cost savings, trade out of products, practice changes and staff education. Physicians were involved in review of both products and processes.

The mission statement of the committee was to "add value to the facility by providing on-going services that evaluate clinical practice, promote fiscal responsibility and support professional development." I wanted to increase OR staff involvement in the development of staff expertise and education, improve understanding and accountability for staff decisions that had a financial impact, improve physician satisfaction, develop true service line leaders, review equipment, instrumentation and supplies in facility, standardize preference cards and embrace professional development and certification.

We measured the results in multiple ways. The completion of specific goals was measured, for example, we ensured that all preference cards were updated, and we reviewed and revised of all OR packs.

At year end, we were able to save approximately $105,115 in medical supplies from the previous year.

More Articles on ASCs:

Dr. Daniel Eglinton Opens Asheville Biologics and Orthopedics
Sanford Health Opens $9M Orthopedics & Sports Medicine Center
Dr. Jeffrey Postma Joins Lakeland Healthcare's Community Bone and Joint

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