Many surgery center administrators prefer to standardize equipment purchases as much as possible to incur cost savings on supplies. However, some ASCs need to retain physician preference items. Here are five tips for profitability while maintaining physician preference.
1. Incentivize supply staff to keep inventory management cost-effective. Josh Billstein, practice manager of the ambulatory surgery center at The Polyclinic in Seattle, says his surgery center incentivizes the surgical techs who work on inventory management to watch supply costs. The surgical techs provide par levels for each supply based on physician preference cards, keeping in mind how many supplies would be needed for a "worst case scenario" at the surgery center. Mr. Billstein says this "worst case scenario" does not always directly represent how many supplies are kept at the center, but it's useful for more critical items. He says his surgical techs divide supplies into three categories: level A, which must be ordered early and checked on a continual basis; level B, which can swing one way or the other; and level C, which are ordered infrequently and are not necessary for most cases.
He says he incentivizes surgical techs to keep supply costs down by providing gift cards and monetary rewards when they stay on-budget. "It's like a competition for them — can we beat what we did last month?" he says. "It's important to empower your on-site staff and try to reward them."
2. Don't open what you don't use. If your surgeons have custom packs, make sure they are using everything in the packs. If something goes unused, the surgical team should not open the package. "If there is something we don't use on the physician preference cards, we don't open it. That saves on costs for items like shaver blades," indicates Erika Horstmann, Director of Operations for Pinnacle III. "We include surgeons on the decisions about what should and should not be opened. When surgeons want everything opened just in case, we tell them how much it costs just to open an item as well as the cost burden on our surgery center when it's wasted."
You can also go a step further by eliminating the unused item from the custom packs.
"We look at custom packs annually to ensure we are using everything in the pack and not wasting any of it," states Ms. Horstmann. "We also obtain bids from different vendors to ensure we are receiving the most competitive pricing. Last time we did this, we saved $100 per pack, which is significant savings."
3. Reduce the number of suppliers for a specific product. Narrowing the number of suppliers from whom specific supplies are purchased can also be an effective strategy, says Richard Peters, senior director of surgery services at Provista, LLC. However, before journeying down this path, make sure you are fully aware of physician sensitivities and loyalties to specific products. Recognize that suppliers often have long-standing relationships with physicians that strongly influence the final decisions about product selection and utilization. If a single source contract just won't fly, work with them to reduce the number of suppliers for that product to as few as possible.
4. Involve physicians in the purchasing process. Provide comparative cost and quality data for physician preference items and involve the surgeon in supply chain decisions. "The whole idea is to increase the visibility of how the physicians' choice on supplies impacts the surgery center's bottom line," he says. "They're really starting to pay attention and evaluate products they can use that have a stronger value proposition and have the same clinical outcomes."
In a survey conducted in October 2011, 55 percent of centers said they were very or somewhat engaged with their physicians on managing supply costs, while 39 percent said they were engaging with their physicians at higher levels than in past years.
5. Ask physicians to fill out a "clinical justification form" for new products. If physicians are hesitant to accept standardization — or they come back from every specialty conference with a request for a new piece of equipment — you might ask them to fill out a "clinical justification form" for every new product. Mr. Billstein says if a physician wants to bring a new product to the surgery center, he or she must fill out a form that details any relationships the surgeon has with the product vendor, why they want to use the product and how it compares to other products on the market.
He says mandating this process for every physician helps each surgeon feel comfortable about what his or her colleagues are receiving from the surgery center. If every physician has to go through the same justification process, the surgeons can assume that purchasing decisions are not taken lightly. They also may hesitate to come to the administrator with a request for expensive equipment if they know they don't really need it.
More Articles on Surgery Centers:
Physician Recruitment Trends for ASCs: Q&A With Paul Eiseman of Regent Surgical Health
18 Statistics on Surgery Center Acquisition Market
5 Initiatives for a Better Patient & Physician Experience
1. Incentivize supply staff to keep inventory management cost-effective. Josh Billstein, practice manager of the ambulatory surgery center at The Polyclinic in Seattle, says his surgery center incentivizes the surgical techs who work on inventory management to watch supply costs. The surgical techs provide par levels for each supply based on physician preference cards, keeping in mind how many supplies would be needed for a "worst case scenario" at the surgery center. Mr. Billstein says this "worst case scenario" does not always directly represent how many supplies are kept at the center, but it's useful for more critical items. He says his surgical techs divide supplies into three categories: level A, which must be ordered early and checked on a continual basis; level B, which can swing one way or the other; and level C, which are ordered infrequently and are not necessary for most cases.
He says he incentivizes surgical techs to keep supply costs down by providing gift cards and monetary rewards when they stay on-budget. "It's like a competition for them — can we beat what we did last month?" he says. "It's important to empower your on-site staff and try to reward them."
2. Don't open what you don't use. If your surgeons have custom packs, make sure they are using everything in the packs. If something goes unused, the surgical team should not open the package. "If there is something we don't use on the physician preference cards, we don't open it. That saves on costs for items like shaver blades," indicates Erika Horstmann, Director of Operations for Pinnacle III. "We include surgeons on the decisions about what should and should not be opened. When surgeons want everything opened just in case, we tell them how much it costs just to open an item as well as the cost burden on our surgery center when it's wasted."
You can also go a step further by eliminating the unused item from the custom packs.
"We look at custom packs annually to ensure we are using everything in the pack and not wasting any of it," states Ms. Horstmann. "We also obtain bids from different vendors to ensure we are receiving the most competitive pricing. Last time we did this, we saved $100 per pack, which is significant savings."
3. Reduce the number of suppliers for a specific product. Narrowing the number of suppliers from whom specific supplies are purchased can also be an effective strategy, says Richard Peters, senior director of surgery services at Provista, LLC. However, before journeying down this path, make sure you are fully aware of physician sensitivities and loyalties to specific products. Recognize that suppliers often have long-standing relationships with physicians that strongly influence the final decisions about product selection and utilization. If a single source contract just won't fly, work with them to reduce the number of suppliers for that product to as few as possible.
4. Involve physicians in the purchasing process. Provide comparative cost and quality data for physician preference items and involve the surgeon in supply chain decisions. "The whole idea is to increase the visibility of how the physicians' choice on supplies impacts the surgery center's bottom line," he says. "They're really starting to pay attention and evaluate products they can use that have a stronger value proposition and have the same clinical outcomes."
In a survey conducted in October 2011, 55 percent of centers said they were very or somewhat engaged with their physicians on managing supply costs, while 39 percent said they were engaging with their physicians at higher levels than in past years.
5. Ask physicians to fill out a "clinical justification form" for new products. If physicians are hesitant to accept standardization — or they come back from every specialty conference with a request for a new piece of equipment — you might ask them to fill out a "clinical justification form" for every new product. Mr. Billstein says if a physician wants to bring a new product to the surgery center, he or she must fill out a form that details any relationships the surgeon has with the product vendor, why they want to use the product and how it compares to other products on the market.
He says mandating this process for every physician helps each surgeon feel comfortable about what his or her colleagues are receiving from the surgery center. If every physician has to go through the same justification process, the surgeons can assume that purchasing decisions are not taken lightly. They also may hesitate to come to the administrator with a request for expensive equipment if they know they don't really need it.
More Articles on Surgery Centers:
Physician Recruitment Trends for ASCs: Q&A With Paul Eiseman of Regent Surgical Health
18 Statistics on Surgery Center Acquisition Market
5 Initiatives for a Better Patient & Physician Experience