1. Appoint a physician champion for supply chain standardization. The physician champion should be someone who is in a senior position at the surgery center and interested in promoting future cost savings through standardization. To appoint this person, bring all high volume surgeons from each specialty in one room to discuss supply chain management, liability and their commitment to success at the surgery center. During this meeting, a leader should come forward to really advocate for reducing costs by streamlining implants.
“Typically, physicians will listen better to their fellow surgeons than to someone from the outside,” says Lori Pilla, vice president of Amerinet Clinical Advantage and Supply Chain Optimization. “Keep the physician champion in the loop about steps you are taking to standardize implants and communicate with them on a consistent basis. Additionally, if you come across someone who isn’t willing to change, ask the physician champion to help stand with you from a united perspective to discuss the issue.”
The physician champion will play the key role of influencing other surgeon partners to participate in the process and provide insight into the best method for standardization. Remind them that standardization of products in the market today does not necessarily mean “one” as it did historically. It could be just reducing the multiple suppliers to a much smaller number.
2. Treat commodities as commodities. Many implants on the market today are commodities, meaning you don’t need the “name brand” to achieve the highest value. When there is a cost difference between two commodities, consider choosing the less expensive implant. “We all have to think about the huge cost-price difference across the instrument, implant and device markets once you leave the United States,” says Chris Zorn, vice president of sales for Spine Surgical Innovation and executive director of Minimal Incision-Maximum Sight (MIMS) Institute. “Cost pressure is rapidly mounting. The question is how long can these huge cost-price differences be acceptable to the consumers of surgery service and the payors?”
3. Pit vendors against each other during vendor negotiations. Brooke Smith, administrator, Maryland Surgery Center for Women, recommends centers threaten vendors with the possibility of switching a center’s physicians to another product or another vendor.
“We use that fact,” she says. “We literally have all the gynecologists from the local hospital. If I make a move to go one way or another, I have the power to sway X number of doctors not to use that product.”
Eric Friedlander, CEO of Starpoint Health, says ASCs should always work with more than one vendor to guarantee a competitive price. When entering into price negotiations, surgery centers should have bids from other vendors. He says, surgery centers should ask two or three vendors to submit bids and then pit the bids against each othe
4. Be flexible about switching suppliers or reducing the number of suppliers. Narrowing the number of suppliers from whom specific supplies are purchased can also be an effective strategy, says Richard Peters, senior director of surgery services for Provista. However, before journeying down this path, make sure you are fully aware of physician sensitivities and loyalties to specific products. Recognize that suppliers often have long-standing relationships with physicians that strongly influence the final decisions about product selection and utilization. If a single source contract just won’t fly, work with them to reduce the number of suppliers for that product to as few as possible.
5. Consider consignment for expensive items. Jesseye Arrambide, RN, BSN, CNOR, executive director at Oregon Outpatient Surgery Center and vice present and program chair of the Oregon Ambulatory Surgery Center Association, recommends surgery centers consign expensive items such as implants.
“We have told them, ‘We’ll use your product, but you have to consign to us,'” she says. “Implants can be so expensive that you don’t want to purchase them and then let them sit on the shelf.”
Another way to mitigate the high cost of these items is by working with insurers to carve out, or reimburse the price of the implant separate from the procedure itself, the cost of the implant from the reimbursement itself, Ms. Savoie says.
“Many insurances do not cover implants or high dollar items separately,” she says. “At times, we are able to negotiate carve outs, but that is getting increasingly more difficult. The southern region seems to have more difficulty getting implant reimbursement than the Northeast. Ultimately the best scenario is getting insurance contracts with carve outs. When that is not an option, we search for different vendors or attempt to negotiate pricing in order to perform the cases at the center.”
6. Select the right electronic health system. Electronic health systems are important in ASC management. Since your staff will be most involved in using your system, you should give them a role in choosing the best fit, says Jennifer Brown, RN, endoscopy nurse manager of Gastroenterology Associates of Central Virginia in Lynchburg. “When you help your staff get into the selection process, when you get into training, then things tend to fall into place,” she says. The staff ended up choosing ProVation Medical, in part because the system was customizable to the practice’s needs. Your staff has a wealth of knowledge about the daily tasks that help your practice run smoothly, so let them play with various systems before you come to a decision about your long-term investment.
Related Articles on Surgical Supplies:
10 Tips from ASC Administrators on Tough Vendor Negotiations
Amerinet Partners With Amblitel for Surgery Center Financial Management Services
Novarad Named Approved Supplier for Amerinet
