Purchasing
1. Pit supply vendors against each other. There are always several companies that offer the equivalent to a certain type of equipment, so Steve Corl, administrator at Mackinaw Surgery Center in Saginaw, Mich., recommends doing a product comparison. His biggest supply needs for orthopedics are anchors and screws, which act as implants. His ASC looks at each company’s product and involves its physicians in the process, which he says “is key because it’s not always about prices. Even though one product might be cheaper, you might want the more expensive equivalent because it’ll add more value to the facility.”
Once his center has compared the products, he lets the companies know that Mackinaw Surgery Center is comparing their prices to other companies. “Then it becomes a bidding war over prices between the three or four companies,” he says. “We go to them and say, ‘We know the quality is equal in all of your products across the board. We need your best price and we’re going to go with the best one out of the rest.'”
From: Quick Tip: Negotiating Prices With Supply Vendors
2. Consider building a relationship with a hospital. A partnership with a hospital can give an ASC access to supplies and purchasing power to negotiate lower supply costs. “Our relationship with the hospital means they have the same supplies,” says Lynda Simon, administrator of St. John’s Clinic: Head and Neck Surgery in Springfield, Mo. “If they’re low on something, we can share, and if we’re low on something, they can share.” She adds, “Because all the purchasing goes through the system, that gives you a little bit of extra push because the hospital is working on your behalf to get costs down as low as they can.”
From: 3 Ways to Cut ASC Costs Through Supply Management
3. Reduce purchasing mistakes by giving common items a trial period. An ASC will frequently see a commonly-used item from another manufacturer at a reduced cost, such as a hand cleanser or non-sterile gloves, and immediately switch without a mini-trial, says Susan Kizirian, chief operating officer for ASCOA. The trial doesn’t have to be a big deal, she says. Just get the item for trial and gather feedback, and then switch to the new item, giving staff and physicians who use the item time to try the new item, compare it to what’s currently used and give feedback. Upfront buy-in saves the dollars that overcoming resistance to change generates.
From: 3 Mistakes ASCs Make When Purchasing Supplies
4. Never buy impulsively. When ordering supplies, an ASC must stay tough and focused on what may be the best deal for the surgery center as a whole and not just for individual physicians. Georganna Howell, administrator of Baltimore-based Greenspring Surgery Center, compares prices between several companies before settling on a final purchase.
“There was a company that offered $18 per unit for a Bovi pen after I was offered $25 per unit [by a previous company],” she says. “But I could get [the deal] if I buy a minimum of 1,000 units. I went with a third company because there was no minimum or maximum purchase required, and I actually ended up with a better price than either company. You never want to lock yourself into a minimum or maximum purchase requirement. Everything we purchase has a thought behind it. I want top-of-the-line supplies and won’t settle for less, so I’m going to shop around.”
From: 3 Tips on Cutting ASC Supplies and Materials Costs.
Managing
1. Measure cost, frequency of use and reimbursement. Becky Johnson, clinical director of Lincoln (Neb.) Endoscopy Center, focuses on the cost of any new equipment as well as how often the equipment will be used and the amount of money that will be reimbursed from payors when using the equipment.
“We’ve talked about [purchasing] equipment for monitoring pH in the esophagus and hemorrhoidal banding, but based on how frequently physicians would even use those, how much it cost and lack of reimbursement from insurance companies, the research didn’t support it,” she says.
From: 3 Best Practices for Purchasing Equipment for Your Endosocpy Center.
2. Hire an inventory manager. The key to inventory control is an inventory manager who has complete responsibility for tracking your inventory, according to Sandy Berreth, administrator of Brainerd Lakes Surgery Center in Baxter, Minn. “You don’t have to hire a medical person, though it doesn’t hurt to have an experienced OR nurse because they just know what you need and what you’re using,” she says. “The key is to have a single person who’s completely engaged in the process of inventory control.”
If you leave inventory duties up to your administrator or other staff members, they may neglect inventory tasks when your ASC is busy and they have other things on their plate. An inventory manager will let you know which supplies you aren’t using, which you could be saving money on and which cases cost you the most in terms of supplies — information you may overlook if you’re handling the responsibility on top of everything else.
From: 7 Steps to Cut ASC Costs Without Sacrificing Quality
3. Keep supplies in short stock. If you want to cut costs and prevent waste, look at your supply shelf and make sure you don’t have unnecessary supplies sitting around. “We have a very small owned inventory, and everything is in very, very short stock,” says Tammy Burnett, administrator of The Plastic Surgical Center in Flowood, Miss. “We order quickly and we don’t use supplies when they’re not needed.”
She says her staff members are vigilant about preventing waste: Before they start a procedure, they look at every supply involved to make sure it’s necessary. “If they’re looking at a suture, our staff are involved enough to say, ‘No, we need this link because it’s longer and we’ll pay less for it than we would for several shorter ones’,” she says.
David Kelly, administrator of Samaritan North Surgery Center in Dayton, Ohio, says most centers have supplies that are rarely used. “Get rid of the things that don’t add any value,” he says.
From: 3 Ways to Cut ASC Costs Through Supply Management
4. Review supplies per case every month. Supplies are a significant line item expense ASCs can control. Brian Brown, regional vice president of operations for Meridian Surgical Partners, notes it is essential for ASCs to budget for supplies based on its case mix. Some important supply items to look at are implants, IOLs and pharmaceutical expenses.
Implants should be monitored particularly closely, and ASCs should make sure expensive devices are covered by payors. “ASCs need to break out implants and make sure payments have been received. Back-office employees should make sure patients have the proper authorizations when submitting claims, because margins can be affected if implants are not paid for,” Mr. Brown says.
