Physician preference items, disruption & more: BroadJump's Ann Castro discusses the top ASC supply chain challenges

Ann Castro, BroadJump's vice president of non-acute sales, has 25 years of experience in the healthcare industry, specifically in the group purchasing organization space. Before joining BroadJump, Ms. Castro worked as a facilitator for a surgery center client committee.

Becker's ASC Review asked Ms. Castro to share her thoughts on the supply chain challenges facing ASCs today.

Note: Responses have been lightly edited for style and clarity.

Question: Why are physician preference items challenging for ASCs? What are some ways ASCs can tackle these challenges?

Ann Castro: Physician preference items represent the highest percentage of supply chain expenses. Physicians are trying to work with these specific items and don't want to move. At BroadJump, we've found price variances [of] up to 442 percent for PPIs, making this a challenging area when it comes to controlling costs. Instead of asking the physician to switch products, the ASC should identify where the variation is and focus on how to fix it. I believe an easy way to do this is by using a comparative analytics tool and [using] their positioning in the market to pay a more realistic price for these products. Once you know where you stand in the market, you can use that information to really level the playing field when you're negotiating with some of these suppliers.

Q: Are you seeing any disruptive forces affect ASC supply chain management?

AC: We're at a point where patients are demanding price transparency for their procedures. Surgery centers and physicians have got to demand transparency from their suppliers. Utilizing a supply chain or inventory management system can really help [ASC staff] track expenditures so they can understand the reasons for the change. Tools have unbiased data to provide true transparency in the current market. This allows ASCs to better negotiate with suppliers and really maximize efficiencies.

Surgery centers also lack bandwidth to negotiate better pricing. It's not often that we see a dedicated materials manager in a surgery center. Typically, the person responsible for supply chain have many other responsibilities and most materials managers don't have time to allocate toward data mining and price-checking to cut costs. Surgery centers need to utilize tools that can easily identify the need of improvement in the price point to make decisions toward decreasing spend. ASCs should really focus on items that [present] a reimbursement challenge or that have a high area of spend like physician preference items. That way, they can maximize what little time they do have available.

Q: What tools can ASCs use to improve supply chain operations?

AC: ASCs need to start by tackling big-ticket items. Those who handle supply chain at ASCs are often really busy, however, if they focus on the areas that might truly be hurting their overall financial health, that can have an extremely beneficial outcome. Data analytics tools that aggregate all the center's data provide an overall view of supply spend, as well as [a] breakdown by category. This allows surgery centers to decide where to devote their time and maximize their efficiencies.

Q: Can you delve into the challenges planned orthopedic surgery costs present for ASCs?

AC: For orthopedics, that is the biggest area for physician preference items. Typically, for those centers, their supply chain spend is allocated at a 60 percent rate. So, orthopedic practices spend a majority of their overall supply chain budget on physician preference items. With so many procedures moving to an outpatient setting, I'm finding the dynamics of the volume are really shifting within our market. The time is right to leverage market share and volume, and begin to focus on physician preference items.

Q: How does supply chain play into case costing? What challenges are ASCs facing in that space?

AC: It's easier for a single-specialty to know exactly where [its] case costing is. If you're not watching your preference cards or case costing, you really could be losing revenue. If your costs outweigh what's being reimbursed, that's not an ideal way to increase your revenue. Focusing on what encompasses that procedure — and the implant is going to be the biggest part —would be the first area to focus on.

To participate in future Becker's Q&As, contact Rachel Popa at rpopa@beckershealthcare.com.

For a deeper dive into ASC industry trends, attend the Becker's 17th Annual Future of Spine + Spine, Orthopedic & Pain Management-Driven ASC in Chicago, June 13-15, 2019. Click here to learn more and register.

More articles on supply chain:
ASC supply chain tip of the day: Use time-saving tools
ASC supply chain tip of the day: Tackle big-ticket items
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