Jesseye Arrambide, RN, BSN, CNOR, executive director at Oregon Outpatient Surgery Center and vice president and program chair of the Oregon Ambulatory Surgery Center Association, shares 10 ways surgery centers can save money on supplies and equipment.
1. Purchase refurbished or demo capital equipment. While some capital equipment should be purchased brand new, Ms. Arrambide says ASCs can save money by purchasing some demo or refurbished equipment. "There are options out there for demo equipment that's only been used a couple of times," she says. "A lot of times, companies will refurbish it and give you the same warranty that comes with a new piece of equipment." When you talk to sales reps, she recommends asking for a quote on a particular piece of equipment, then asking the rep if the company has options for demo or refurbished equipment.
She says she usually has to ask sales reps for the option of demo or refurbished equipment, but once she does, the companies are often willing to work with her. "You usually have to ask the question and let them know you're looking at other companies," she says.
2. Consign implants. Since implants are such a significant cost to Ms. Arrambide's ASC, she worked hard with her vendors to consign implants. "We have pretty much told them, 'We'll use your product, but you have to consign to us,'" she says. Implants are so expensive that you don't want to purchase them and then let them sit on the shelf.
3. Look at shipping costs. Ms. Arrambide advises ASC administrators to examine shipping costs and other additional hidden costs when negotiating with vendors. She says some vendors may exempt the ASC from paying shipping, or the center may be able to choose ground shipping rather than air mail for non-urgent supplies.
4. Consider generic implants. Ms. Arrambide said some implants are dropping in price as patents expire and the implant designs become available to different companies. "That's a huge cost savings," she says. Talk to your sales reps about the availability of generic implants and network with colleagues to find out when patents expire.
5. Take advantage of distributor reward and rebate programs. Ms. Arrambide recommends building a strong relationship with your vendors and distributors to make sure that you capture all possible savings. "We work very closely with our distributors, and if you start purchasing one product while you're already purchasing another product, you can build a better relationship and achieve a better reward," she says. Most distributors have reward and rebate programs for loyal customers, so make sure to ask your representatives and apply for all available discounts.
6. Review custom packs. The supplies that come in custom packs may change regularly, meaning surgery center administrators must regularly review the contents to make sure the ASC needs everything that's included. "The custom packs may routinely change, and all of a sudden, you don't need one of the things that come in it," Ms. Arrambide says. "Review annually to make sure you're not opening one supply separately all the time." She says your ASC should continually look at other vendors to make sure you are getting the best deal on your custom packs.
7. Post PAR levels. 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 don't have to run down the hallway and get something," she says. "We tend to packrat things and stock a bin fuller than it needs to be stocked." If your staff members are overstocking supplies, you will end up with more supplies on your shelf than you need. Determine the correct level of each supply in the pre-op and post-op areas, then post those PAR levels to let staff members know when to stop stocking.
8. Reprocess when possible. Ms. Arrambide says ASCs can recognize a 50 percent savings on equipment by reprocessing supplies with an FDA-approved reprocessing company. She recommends doing thorough research into respected companies in your area and then sending appropriate items for reprocessing whenever possible.
9. Track expiration dates. During quarterly inventory, Ms. Arrambide's staff flags items that are approaching expiration. She then sets up a "show and tell" table so that staff can look at nearly-expired items and plan to use them before the expiration date arrives. "That gives us a 3-6 month lead time for all supplies," she says. "For implants, we do it six months before the expiration date because they're really expensive." Setting up this "show and tell" table can also give staff members an idea of which supplies frequently approach expiration without being used.
10. Post supply and case costs. Ms. Arrambide recommends posting supply costs in your ASC to help physicians and staff understand the impact of using certain items. "I remember recently we were dealing with a lot of repairs on some of our scopes, and four scopes had to go out to be repaired at $1,500 a piece," she says. "We need to keep physicians aware of those costs and help staff understand that you don't open something unless the doctor says, 'I need this now.'" When her surgical team starts a case, the team members do not open every supply immediately, but instead hold them in a cart until each item is necessary. She says preference cards should also be kept up-to-date so staff members don't stock supplies the physician no longer uses.
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1. Purchase refurbished or demo capital equipment. While some capital equipment should be purchased brand new, Ms. Arrambide says ASCs can save money by purchasing some demo or refurbished equipment. "There are options out there for demo equipment that's only been used a couple of times," she says. "A lot of times, companies will refurbish it and give you the same warranty that comes with a new piece of equipment." When you talk to sales reps, she recommends asking for a quote on a particular piece of equipment, then asking the rep if the company has options for demo or refurbished equipment.
She says she usually has to ask sales reps for the option of demo or refurbished equipment, but once she does, the companies are often willing to work with her. "You usually have to ask the question and let them know you're looking at other companies," she says.
2. Consign implants. Since implants are such a significant cost to Ms. Arrambide's ASC, she worked hard with her vendors to consign implants. "We have pretty much told them, 'We'll use your product, but you have to consign to us,'" she says. Implants are so expensive that you don't want to purchase them and then let them sit on the shelf.
3. Look at shipping costs. Ms. Arrambide advises ASC administrators to examine shipping costs and other additional hidden costs when negotiating with vendors. She says some vendors may exempt the ASC from paying shipping, or the center may be able to choose ground shipping rather than air mail for non-urgent supplies.
4. Consider generic implants. Ms. Arrambide said some implants are dropping in price as patents expire and the implant designs become available to different companies. "That's a huge cost savings," she says. Talk to your sales reps about the availability of generic implants and network with colleagues to find out when patents expire.
5. Take advantage of distributor reward and rebate programs. Ms. Arrambide recommends building a strong relationship with your vendors and distributors to make sure that you capture all possible savings. "We work very closely with our distributors, and if you start purchasing one product while you're already purchasing another product, you can build a better relationship and achieve a better reward," she says. Most distributors have reward and rebate programs for loyal customers, so make sure to ask your representatives and apply for all available discounts.
6. Review custom packs. The supplies that come in custom packs may change regularly, meaning surgery center administrators must regularly review the contents to make sure the ASC needs everything that's included. "The custom packs may routinely change, and all of a sudden, you don't need one of the things that come in it," Ms. Arrambide says. "Review annually to make sure you're not opening one supply separately all the time." She says your ASC should continually look at other vendors to make sure you are getting the best deal on your custom packs.
7. Post PAR levels. 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 don't have to run down the hallway and get something," she says. "We tend to packrat things and stock a bin fuller than it needs to be stocked." If your staff members are overstocking supplies, you will end up with more supplies on your shelf than you need. Determine the correct level of each supply in the pre-op and post-op areas, then post those PAR levels to let staff members know when to stop stocking.
8. Reprocess when possible. Ms. Arrambide says ASCs can recognize a 50 percent savings on equipment by reprocessing supplies with an FDA-approved reprocessing company. She recommends doing thorough research into respected companies in your area and then sending appropriate items for reprocessing whenever possible.
9. Track expiration dates. During quarterly inventory, Ms. Arrambide's staff flags items that are approaching expiration. She then sets up a "show and tell" table so that staff can look at nearly-expired items and plan to use them before the expiration date arrives. "That gives us a 3-6 month lead time for all supplies," she says. "For implants, we do it six months before the expiration date because they're really expensive." Setting up this "show and tell" table can also give staff members an idea of which supplies frequently approach expiration without being used.
10. Post supply and case costs. Ms. Arrambide recommends posting supply costs in your ASC to help physicians and staff understand the impact of using certain items. "I remember recently we were dealing with a lot of repairs on some of our scopes, and four scopes had to go out to be repaired at $1,500 a piece," she says. "We need to keep physicians aware of those costs and help staff understand that you don't open something unless the doctor says, 'I need this now.'" When her surgical team starts a case, the team members do not open every supply immediately, but instead hold them in a cart until each item is necessary. She says preference cards should also be kept up-to-date so staff members don't stock supplies the physician no longer uses.
Related Articles on Supply Chain Issues:
Drug Vending Machine Increases ASC Patients' Compliance: Q&A With Kelly Durian at Iowa City Ambulatory Surgery Center
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Indiana Senator Says Device Tax Could Cut Jobs in His State