1. Stay educated on reimbursement trends. Supply chain management is a sophisticated process, says John Cherf, MD, president of OrthoIndex. The automobile industry is the leading industry and is considered the “best practice.” This industry is a sort of “best of breed” in supply management because it works opposite of the healthcare industry: thousands of suppliers and fewer buyers who manage those costs aggressively. It’s all about leveraging “buyer power.” Orthopedic ASCs can internally get up the learning curve by committing the staff and time to stay educated on reimbursement trends, optimal coding and managing the cost of specific orthopedic devices, but some facilities may not always be able to do this effectively.
Alternatively, orthopedic ASCs can aggregate buying power in using a third-party firm. Neutral, unbiased, orthopedic technology management specialists can educate ASCs that don’t have the experience or knowledge to capture appropriate pricing. These firms can help propagate buyer power, develop and manage supply chain contracts, leverage provider alignment, maintain compliance and much more.
2. Understand a good benchmark range for dollars of inventory on shelf. Kathleen Whitlow, chief operations offer for Blue Chip Surgical Center Partners, says a range for dollars of inventory on the shelf of an orthopedics-driven ASC will vary based on case volume and whether the ASC has implants brought in case-by-case or keeps them on the shelf.
“The benchmark is center-specific,” she says. “A really well run orthopedic-driven ASC keeps a minimum on the shelves, uses consignment or has the representatives bring in what is needed on a per case basis. Our average for orthopedics inventory shelf dollars is about $50,000-$75,000 for ASCs doing 300 cases a month.”
From “5 Ways to Reduce Supply Costs at Your Orthopedic-Driven ASC.”
3. Make surgeons and staff members aware of what everything costs. Lorreine Borrayo, director of nursing at Carillo Surgery Center in Santa Barbara, Calif., regularly talks to Carillo’s surgeons about pricing on supplies to keep them apprised of how much the facility is spending and to level with them about proposals for new equipment and supplies they may want to start using.
“They have preferences with certain supplies, so I really try to educate our surgeons and employees and point out that a cheaper alternative — such as certain sutures for shoulder rotator cuffs — from a different company is just as good as the model they want but it costs us this much less,” she says. “So we really include our staff with pricing. Cesar is able to go through different companies and do price comparisons.”
From “10 Proven Strategies to Successfully Reduce ASC Supply Costs.”
4. Consider consignment agreements. For our implants, it is absolutely critical we have consignment agreements, says Julie Martin, assistant vice president for surgical services for all three campuses of HealthOne in Denver. Most healthcare venues don’t want to carry an overhead of implants, so having the ability to have consignment and have vendors help us with managing consignment is critical. For instance, for our total knee implants we are not going to carry a whole line of those from five vendors. We expect them to come in and provide the product as we need it; otherwise huge dollars are tied up in inventory.
From “Tip: Reduce Costs of Implants With Consignment Agreements.”
5. Prohibit sales representatives from entering the surgery suite. According to David Forquer, clinical strategist of enterprise solutions for Amerinet, facilities should take an aggressive role in prohibiting sales representatives from going into the surgery suite. If a rep is allowed to enter the surgery suite and talk to the physicians about the “latest and greatest” tools, the ASC administrator will find it much more difficult to overcome physician loyalty to particular brands or sway physicians away from buying expensive, new equipment.
From “Implant Costs: Why ASC-Physician Collaboration Makes Sense.”
