As payers steer patients toward lower-cost settings, ASCs are pressured to improve supply chain efficiency and discover new savings opportunities, regardless of the organization's size, region or hospital affiliation.
A group of about 20 ASC administrators from across the U.S. gathered at Becker's ASC 25th Annual Meeting: The Business and Operations of ASCs, Oct. 18-20 in Chicago, to discuss the primary supply chain challenges facing their organizations.
This article is sponsored by Medline.
Here are three supply chain challenges identified during the discussion:
1. Navigating vendor relationships.
The tendency for vendors to raise prices after noticing higher reimbursement for items such as new stents is a source of frustration, said a registered nurse who serves as administrator and business manager at a surgeon-established Midwestern ASC.
"We had instances where they knew we were going to be reimbursed higher, so they jacked their price up higher," she said. "We try to go back and negotiate with them to get the price back down, but that's really frustrating from our side when we're doing what we can to turn a profit."
An administrator at a surgery center in the Midwest said vendors looking to capture the amount of the Medicare reimbursement increase particularly affects centers specializing in ophthalmology, where it's part of the business model to have "the latest and greatest."
For several administrators, vendors upselling products for the OR is also a major pain point. At an orthopedics-focused ASC in the Midwest, vendors are invited to a meeting to review policies — and learn what will happen if they don't follow them. One of those rules is to notify the clinical director before visiting the building. The administrator overseeing several ASCs in the West developed a similar policy requiring vendors to sign in at the front desk and obtain a purchase order, in order to get paid. If vendors fail to follow that policy, their services are considered a free "gift."
The nurse administrator at a two-OR ASC in the Southeast and the administrator and medical director of a plastic surgery ASC in the West relayed positive experiences working with prime vendors, although the Western facility uses multiple sources for items other than sutures.
Using a prime vendor can help curb overspending, according to the interim administrator of a 10-OR ASC in the West, who was previously the vice president of operations at a healthcare management services organization. In situations where an item is needed for a specialty case but there isn't a need for a large quantity, a prime vendor can help get a lower amount.
2. Discovering cost-saving opportunities.
Educating staff members and physicians about the cost of items and the consequences of hoarding is a huge opportunity to slash expenditure. When nurses hoard inventory, it deals a blow to inventory tracking and case costing. The administrator of an orthopedics-focused ASC in the Midwest suggested playing 'The Price is Right' or creating a contest to help nurses learn how much items cost.
At an orthopedic and pain management surgery center in the Southeast, staff members have complete access to an electronic pricing system they pull up immediately if a physician asks the cost of an item. Physicians at the center are engaged and actively aware of expenses. "It's part of our culture to have cost knowledge," the nurse administrator said.
Even the small things add up. A Midwestern ASC switched from single-use marking pens to multiuse ones after the CDC published information about self-sterilizing, saving the center about $6,000 a year. The center used that extra money to throw a staff party, and other savings have financed 15-minute massages for employees.
While watching costs, it's important to be aware of how items are handled. The administrative director of an ophthalmology ASC in the Midwest noted it's easy for busy staff members to carelessly shove items in the cabinet instead of putting the old ones in front and the new behind. The center's staff members are now making a conscious effort to be mindful about storage to prevent waste.
3. Keeping up with regulation changes.
Overall, ASC leaders weren't concerned about CMS' efforts to increase transparency, saying they already post prices online. They commended CMS' proposal to remove eight ASC quality reporting measures from the 2020 payment determinations as a way to reduce administrative burden. "We had good quality without reporting it," said the administrator of a multispecialty facility in the Midwest.
As the government turns more attention to ASCs, news organizations are doing the same. However, ASC administrators weren't concerned about a Kaiser Health News and USA Today report from earlier this year that questioned the safety of ASCs, as they said it hasn't affected business or quality reporting at all. The administrator of a surgery center in the Midwest said his facility has always shared the ASC's quality data openly with patients and surgeons — in fact, the data is precisely what attracts business.
"A lot of surgeons tell us it's easier for them to get patients to come when they're able to provide that information in the office. We always attach the latest quality data from nearby hospitals. The patients see that — it's an eye-opener for a lot of them," he said.