1. 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 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.”
2. Elect a staff member to monitor supply levels and costs. Keeping par levels low to help contain supply costs first requires formally electing a staff member who is in charge of monitoring inventory, ordering supplies and equipment and keeping a close watch on prices of each item. Ideally, an ASC hires a materials manager who is tasked with supervising this critical financial aspect of the ASC. Lorreine Borrayo, director of nursing at Carillo Surgery Center in Santa Barbara, Calif., says electing a scrub technician, not a licensed staff member, to fill the materials manager position is the most cost-efficient way to carry out supply cost duties.
“Cesar, who is our materials management staff member, is in charge of ordering everything, keeping a close eye on costs and our supply need,” Ms. Borrayo says. “Of course, he keeps an eye on the quantity but also the quality of everything he orders. He’s the most qualified because he’s the one pulling the supplies from our inventory and making packs for our physicians to use during surgeries. So really, I think he’s the best person for the job.”
3. 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.”
4. Actively compare vendors. One way that ASCs can reduce case costs fairly easily is to reduce supply costs. Administrators or purchasing managers must actively compare vendor pricing to ensure that the center is getting the best deal on its supplies. Becky Mann, director of Houston Orthopedic Surgery Center in Warner Robins, Ga., recommends using a group purchasing organization to further reduce costs but recommends that purchasers continue to compare costs of the GPO with outside vendors rather than assume the GPO’s contract brings the best price.
Administrators should also encourage physicians to use the same brand and type of supplies, such as plates, screws and anchors, for similar cases, which reduces supply costs by reducing the number of vendors that an ASC uses. Showing physician-owners the savings of such uniformity is a fairly easy and often successful way to convince them to agree to a single supply set.
Administrators must also be aware of and prepare for possible fluctuations in supply costs. For example, in 2010, ASCs can expect to see increases in the cost of face masks due to increasing demand for them brought on by the swine flu, says Ms. Mann.
5. Be creative in contract negotiations. Rather than defaulting to a traditional “buy-and-sell” contract, orthopedic-driven ASCs should work diligently to iron out a contract that can provide added benefits. Creative contracting can be achieved in a variety of ways, including extended warranties, free training or free supplement equipment. This is a strategic way to keep costs of orthopedic supplies down, especially in situations where suppliers are vying for your facility’s business.
“It can be something as simple as receiving free accompanying equipment with a big purchase of the supplier’s orthopedic devices, such as implantable screws,” Elaine Thomas, administrator at St. Francis Mooresville (Ind.) Surgery Center, says. “Orthopedic suppliers are trying to help surgery centers keep the costs down [in order to lock in those business deals], so there is definitely the possibility of ASCs getting into some more creative financing.”
