Here are five surgery center leaders on the best ways to keep supply costs down.
Josh Billstein, practice manager of the ambulatory surgery center at The Polyclinic, Seattle: Compare insurance plan allowables with supply costs. Every month, Mr. Billstein's sits down and audits ASC supply costs versus the allowable charges for every insurance plan. This is reported to the governing body because when physicians understand that the ASC is receiving a finite amount of money from each insurance carrier, they tend to be more flexible in exploring alternative products, Mr. Billstein says.
"For example, we did an audit of one of our urologists for an [incontinence] case and found that the supplies were not the most cost-effective on the market," he says. "When you compare products side-by-side with the physician, you can move that data point more easily." He says the physicians enjoy comparing their supply costs with the amount of money the insurance carrier provides for a particular case.
Jesseye Arrambide, RN, BSN, CNOR, Executive Director, Oregon Outpatient Surgery Center: Post PAR levels. You can prevent supply hoarding in your ASC by posting PAR levels on your shelves and bins, Ms. Arrambide says. "I'm a nurse, and I know that nurses really want to make sure we have all the items we need for each case. We don't want to run down the hallway and get something, delaying the case" she says. "We tend to packrat things and stock containers more full than they need to be stocked. It increases inventory and supply costs."
Determine the correct level for supplies in each area and post those PAR levels to let staff members see the expected stock levels. Ms. Arrambide says most ASC administrators do "just in time" ordering so they don't run out of supplies to begin with.
Stuart Katz, MBA, FACHE, Director, TMC Orthopaedic Outpatient Surgery, Tucson, Ariz.: Keep a "bin" of unused supplies. Mr. Katz's surgery center reviews customized packs on a regular basis to make sure they aren't spending money on supplies that physicians don't use. However, instead of reviewing supplies with physicians — who may not realize which supplies go unused — Mr. Katz says his center keeps a bin in the decontamination area to store leftover supplies. "Whatever that was in the pack that wasn't used, we put in it in the bin," he says. "Every week or two weeks, we look at what's in there and decide whether we still need to order it." He says if you perform 100 arthroscopies in two weeks and discover that the same drape is placed in the bin for every procedure, you probably don't need to order the drape with the pack.
Eliminating an item from a custom pack doesn't mean you have to stop ordering it entirely, Mr. Katz says. "You can have it on the shelf and pull it for the case," he says. "You don't need to open it until the doctor needs it."
Toni Rambeau, CASC, Administrator, SurgCenter in Glen Burnie, Md.: Encourage physicians to test less expensive surgical tools. Though physicians may be partial to the surgical tools used during training and medical school, nudging them in the direction of less expensive alternatives with the help of a vendor is an effective cost-cutting strategy for the long term. Ms. Rambeau will ask a sales vendor to come to the office with surgical tools ready to sample. She can then sit down with the vendor and the physician to compare two items side by side, allowing the physician to personally handle and assess the potential alternative. "Ultimately it's their decision, but nine times out of ten they see that it's less expensive to go this route, and we'll move toward a less expensive item," said Ms. Rambeau.
Connie Casey, Administrator, North Point Surgery & Laser Center, West Palm Beach, Fla.: Consolidate suppliers to give them higher volume. The more volume you can give a supplier, the better pricing you can achieve, Ms. Casey says. If you use one vendor for a certain supply, you can give them monthly case volume numbers and demonstrate how much money they will make from you in a month. "They really have to know how much work they're going to get out of the facility," she says. "You can say, 'We love the anchors you're putting in the shoulders, but we can't pay that much. If we're going to do this many cases a month, we will need a lower price.'"
If you consolidate suppliers, you will also likely build a better relationship with the vendors you use, Ms. Casey says. It's important that you stay close with your vendor representative to hear about discounts and negotiate deals. Ms. Casey says she has been able to achieve significant cost savings by working with local companies rather than national ones. When you have a relationship with a supplier, she says, "you can explain to them that some payors won't pay for implants, so you need a discount on the implant from the supplier."
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"For example, we did an audit of one of our urologists for an [incontinence] case and found that the supplies were not the most cost-effective on the market," he says. "When you compare products side-by-side with the physician, you can move that data point more easily." He says the physicians enjoy comparing their supply costs with the amount of money the insurance carrier provides for a particular case.
Jesseye Arrambide, RN, BSN, CNOR, Executive Director, Oregon Outpatient Surgery Center: Post PAR levels. You can prevent supply hoarding in your ASC by posting PAR levels on your shelves and bins, Ms. Arrambide says. "I'm a nurse, and I know that nurses really want to make sure we have all the items we need for each case. We don't want to run down the hallway and get something, delaying the case" she says. "We tend to packrat things and stock containers more full than they need to be stocked. It increases inventory and supply costs."
Determine the correct level for supplies in each area and post those PAR levels to let staff members see the expected stock levels. Ms. Arrambide says most ASC administrators do "just in time" ordering so they don't run out of supplies to begin with.
Stuart Katz, MBA, FACHE, Director, TMC Orthopaedic Outpatient Surgery, Tucson, Ariz.: Keep a "bin" of unused supplies. Mr. Katz's surgery center reviews customized packs on a regular basis to make sure they aren't spending money on supplies that physicians don't use. However, instead of reviewing supplies with physicians — who may not realize which supplies go unused — Mr. Katz says his center keeps a bin in the decontamination area to store leftover supplies. "Whatever that was in the pack that wasn't used, we put in it in the bin," he says. "Every week or two weeks, we look at what's in there and decide whether we still need to order it." He says if you perform 100 arthroscopies in two weeks and discover that the same drape is placed in the bin for every procedure, you probably don't need to order the drape with the pack.
Eliminating an item from a custom pack doesn't mean you have to stop ordering it entirely, Mr. Katz says. "You can have it on the shelf and pull it for the case," he says. "You don't need to open it until the doctor needs it."
Toni Rambeau, CASC, Administrator, SurgCenter in Glen Burnie, Md.: Encourage physicians to test less expensive surgical tools. Though physicians may be partial to the surgical tools used during training and medical school, nudging them in the direction of less expensive alternatives with the help of a vendor is an effective cost-cutting strategy for the long term. Ms. Rambeau will ask a sales vendor to come to the office with surgical tools ready to sample. She can then sit down with the vendor and the physician to compare two items side by side, allowing the physician to personally handle and assess the potential alternative. "Ultimately it's their decision, but nine times out of ten they see that it's less expensive to go this route, and we'll move toward a less expensive item," said Ms. Rambeau.
Connie Casey, Administrator, North Point Surgery & Laser Center, West Palm Beach, Fla.: Consolidate suppliers to give them higher volume. The more volume you can give a supplier, the better pricing you can achieve, Ms. Casey says. If you use one vendor for a certain supply, you can give them monthly case volume numbers and demonstrate how much money they will make from you in a month. "They really have to know how much work they're going to get out of the facility," she says. "You can say, 'We love the anchors you're putting in the shoulders, but we can't pay that much. If we're going to do this many cases a month, we will need a lower price.'"
If you consolidate suppliers, you will also likely build a better relationship with the vendors you use, Ms. Casey says. It's important that you stay close with your vendor representative to hear about discounts and negotiate deals. Ms. Casey says she has been able to achieve significant cost savings by working with local companies rather than national ones. When you have a relationship with a supplier, she says, "you can explain to them that some payors won't pay for implants, so you need a discount on the implant from the supplier."
Related Articles on the Supply Chain:
Amerinet Partners With Amblitel for Surgery Center Financial Management Services
Novarad Named Approved Supplier for Amerinet
10 Steps to Maintain Control of an ASC's Central Supply Area