Todd Borst, managing partner of Smithfield Surgical Partners in Northern California, recommends six ways save on supplies in ambulatory surgery centers.
1. Don't get comfortable with pricing. An ASC has to be ready to switch GPOs and vendors when prices become less favorable. "You can't be loyal to any one vendor," Mr. Borst says. While it can be difficult to switch suppliers, it would be worthwhile if a great deal of money were being lost to a high-priced vendor.
2. Compare prices with competitors. Scrutinizing supplier pricing is essential. "The idea is to get these guys to work against each other all the time," Mr. Borst says. Check prices for the key items the surgery center buys from its current GPOs and vendors and compare them to prices of competitors. If an item costs less at a competitor, point this out to the supplier. This is not a great deal of work. Even when a lot of specialties are involved, no more than 30 key suppliers would have to be monitored.
3. Check GPO prices monthly. GPO prices have to be checked monthly because they are constantly changing. "You've got to be vigilant," Mr. Borst says. "GPOs change their pricing all the time." Perform a contribution margin analysis on GPO prices to understand if you are getting the best prices. "You may get a low price for a wide range of goods, but the savings may be offset by higher prices for some key items," he says.
4. Check vendor prices monthly. "You've got to look at every line item," he says. "They'll be giving you a discount in some areas but then they'll be whacking you in other areas."
5. Go outside the GPO as needed. Even with the GPO discount, prices can sometimes be lower at vendors outside the GPO. For example, Mr. Borst found that a vendor outside the GPO was selling lead aprons for X-rays at a price that was 60 percent lower than the next lowest-priced vendor. "That was a substantial savings on an item that normally costs $1,600 to $1,700," he says.
6. Check high-dollar implants daily. Implant prices can vary daily by as much as 10 percent. Each time the center has an upcoming implant, contact the representatives of key competing implant makers to check their prices. If the implant maker you usually use has a higher price, you may still decide to stay with that company if it offers other valuable services.
Learn more about Smithfield Surgical Partners.
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