Here are four established strategies for streamlining supply chain costs in ambulatory surgery centers.
1. Standardize pharmaceuticals. Larry Teuber, MD, president of Medical Facilities Corp., recommends ASCs standardize pharmaceuticals as much as possible. "In our business, [pharmaceuticals] are a big cost, and you have to standardize to save money," he says. "That doesn't mean esoteric stuff, just basic stuff." As with equipment and implants, the more you can standardize your pharmaceuticals and convince your physicians to accept standardization, the more money you will save.
From: 4 Common Surgery Center Supply Chain Mistakes
2. Standardize and reduce medical supplies. Standardizing medical supplies, such as implants and expensive single use items, results in huge savings for ASCs because of the economies of scale that is achieved when negotiating prices with vendors. Providing larger volumes over fewer suppliers yields greater price points for these extremely expensive items. Tom Wilson, managing partner of Monterey Peninsula Surgery Centers and board member of the California Ambulatory Surgery Association, says an added benefit in standardizing medical supplies is time savings for materials managers, which indirectly translates into staffing costs.
"If an ASC has 13 different types of anchors, that's a huge cost because that ASC's [materials management] employees are spending more time and money in maintaining par levels, establishing re-order points and monitoring inventory," he says.
Mr. Wilson says ASCs should also strive to eliminate medical supplies that are rarely used from its inventory. In a recent orthopedic section meeting, his ASCs eliminated 15 unnecessary inventory items, including several different types of anchors and cannulas. "Of course, there are certain supplies that, even if only used a handful of times a year, are absolutely needed [regardless of frequency of use]. However, eliminating items that are not used very often or any duplicative items have saved our centers time, effort and money," he says.
From: 5 Things Every ASC Should Do To Reduce Supply Costs
3. Manage the total life cycle of equipment. Mike Kintner, service contracts manager at TriMedx, says the costs related to supporting a piece of equipment over its entire life cycle, from the point of acquisition to disposal, may actually equal or exceed what it cost to just purchase it. To minimize life cycle service costs as much as possible, he suggests ASCs strategically analyze whether a piece of equipment requires lifetime support that is cost-effective.
"What organizations don't look at is how much it costs over a piece of equipment's life span to support it, and they usually only look at the capital acquisition," he says. "They have to actively manage service costs to understand that maybe an investment in equipment with higher capital would be better because its service costs over its life span will be lower than cheaper equipment."
From: 5 Strategies for Saving Your ASC Money by Streamlining Equipment Costs
4. Invest in technicians to maintain your equipment. While the capital purchase of equipment might seem more daunting in the short term, service contracts provided by the original equipment manufacturer can cost your facility significantly more money over a period of several years. According to Joe Skochdopole, executive director of finance for TriMedx, centers can usually save money by employing their own technicians to maintain and fix equipment, rather than relying on service contracts that can charge more than five times the salary of the technician per hour of work.
Investing in quality technicians is not cheap, but it reduces your reliance on manufacturer contracts and ensures you have a staff member available to promote equipment uptime and get to know your facility's needs. Mr. Skochdopole says the proximity alone of an employed technician can be valuable. "One of the critical factors is response time," he says. "If you have someone on site, it's a matter of them walking [to the equipment]. Depending on where you're located, a manufacturer may have to send somebody out from a major city, so you have half a day of downtime before they can even take a look at it."
The minimum amount of time equipment is down, the better your revenue generation will be, he says. In terms of finding quality technicians, Mr. Skochdopole says facilities can hire people straight form the manufacturer, where technicians may be tired of working on the road and want to stay in one place. You can also look at local technical schools, inquire with the American College of Clinical Engineering or advertise locally.
From: 5 Ways to Save Money on ASC Equipment
1. Standardize pharmaceuticals. Larry Teuber, MD, president of Medical Facilities Corp., recommends ASCs standardize pharmaceuticals as much as possible. "In our business, [pharmaceuticals] are a big cost, and you have to standardize to save money," he says. "That doesn't mean esoteric stuff, just basic stuff." As with equipment and implants, the more you can standardize your pharmaceuticals and convince your physicians to accept standardization, the more money you will save.
From: 4 Common Surgery Center Supply Chain Mistakes
2. Standardize and reduce medical supplies. Standardizing medical supplies, such as implants and expensive single use items, results in huge savings for ASCs because of the economies of scale that is achieved when negotiating prices with vendors. Providing larger volumes over fewer suppliers yields greater price points for these extremely expensive items. Tom Wilson, managing partner of Monterey Peninsula Surgery Centers and board member of the California Ambulatory Surgery Association, says an added benefit in standardizing medical supplies is time savings for materials managers, which indirectly translates into staffing costs.
"If an ASC has 13 different types of anchors, that's a huge cost because that ASC's [materials management] employees are spending more time and money in maintaining par levels, establishing re-order points and monitoring inventory," he says.
Mr. Wilson says ASCs should also strive to eliminate medical supplies that are rarely used from its inventory. In a recent orthopedic section meeting, his ASCs eliminated 15 unnecessary inventory items, including several different types of anchors and cannulas. "Of course, there are certain supplies that, even if only used a handful of times a year, are absolutely needed [regardless of frequency of use]. However, eliminating items that are not used very often or any duplicative items have saved our centers time, effort and money," he says.
From: 5 Things Every ASC Should Do To Reduce Supply Costs
3. Manage the total life cycle of equipment. Mike Kintner, service contracts manager at TriMedx, says the costs related to supporting a piece of equipment over its entire life cycle, from the point of acquisition to disposal, may actually equal or exceed what it cost to just purchase it. To minimize life cycle service costs as much as possible, he suggests ASCs strategically analyze whether a piece of equipment requires lifetime support that is cost-effective.
"What organizations don't look at is how much it costs over a piece of equipment's life span to support it, and they usually only look at the capital acquisition," he says. "They have to actively manage service costs to understand that maybe an investment in equipment with higher capital would be better because its service costs over its life span will be lower than cheaper equipment."
From: 5 Strategies for Saving Your ASC Money by Streamlining Equipment Costs
4. Invest in technicians to maintain your equipment. While the capital purchase of equipment might seem more daunting in the short term, service contracts provided by the original equipment manufacturer can cost your facility significantly more money over a period of several years. According to Joe Skochdopole, executive director of finance for TriMedx, centers can usually save money by employing their own technicians to maintain and fix equipment, rather than relying on service contracts that can charge more than five times the salary of the technician per hour of work.
Investing in quality technicians is not cheap, but it reduces your reliance on manufacturer contracts and ensures you have a staff member available to promote equipment uptime and get to know your facility's needs. Mr. Skochdopole says the proximity alone of an employed technician can be valuable. "One of the critical factors is response time," he says. "If you have someone on site, it's a matter of them walking [to the equipment]. Depending on where you're located, a manufacturer may have to send somebody out from a major city, so you have half a day of downtime before they can even take a look at it."
The minimum amount of time equipment is down, the better your revenue generation will be, he says. In terms of finding quality technicians, Mr. Skochdopole says facilities can hire people straight form the manufacturer, where technicians may be tired of working on the road and want to stay in one place. You can also look at local technical schools, inquire with the American College of Clinical Engineering or advertise locally.
From: 5 Ways to Save Money on ASC Equipment