Randy Piper, Vice President of Non Acute Contracting at Amerinet, discusses why it's beneficial for ambulatory surgery centers to participate in a committed contracting program. Q: How are you able to bring committed contracting programs to ASCs?
Randy Piper: We've been able to work with our suppliers and negotiate contracts with non-specific, non-acute care centers. Those ASCs must have the ability and willingness to commit their volume for several months to standardized products, with the potential for significant savings. We are able to leverage our position with manufacturers who are looking to secure and grow business in the non-acute market.
These programs are designed to provide the greatest value by category. As we are contracting with suppliers, those devices have gone through the FDA clearance process and beat competition from other companies. The products in the program are all vetted and have real cost savings. Our program doesn't have a dollar commitment, but rather a percentage commitment, which makes it more accessible for the average surgery center.
Q: Where is it important for ASCs to focus when they want to drive costs down?
RP: The main areas of spend for supplies include wound closure, surgical instruments, physician preference items and examination gloves. Those categories comprise much of the disposable spend and those are the high dollar products we can leverage by virtue of their compliance to these programs. They can earn an additional 15 to 20 percent savings.
The items we are looking at most often drive high dollar disposable spend and cost per procedure. That's important, as we are seeing reimbursements shift again for freestanding ASCs. When surgeons don't want to standardize, you can tell them how standardization would impact the bottom line and let them know what their bottom line savings would be if they did. The impact on behavior when they see the savings opportunity is amazing.
However, the flexibility of the program itself is key to the savings in the non-acute care setting.
Q: Some physicians have trouble standardizing because they are worried about quality. How can you ensure you're getting the best clinical and cost value when standardizing implants?
RP: ASC administrators can start by paying attention to their group purchasing organization's recommended manufacturers, because they are the ones that have demonstrated an ability to provide real value to the bottom line. Any device or implant should be validated by clinical practitioners to make sure the device company's white papers are accurate and they are really at a lower cost for the total utilization of care.
We look at that to ascertain the real value of devices. Sometimes device company representatives are overly optimistic with regard to the value of their newest products, and are incentivized to up sell to the latest and greatest widget, and we want to avoid that.
Q: What challenges could ASCs face in a committed contracting program?
RP: The challenges are more internal than external, and the committed program isn't for every ASC. The GPO representative will have a good understanding of what options will have the most impact. We understand that it's much easier for acute care organizations to standardize, but the ASC has separate stakeholders involved and fewer resources to spend on each initiative. GPOs can help ASCs drive compliance to the appropriate programs and cut costs.
Most surgery centers should strive for standardization because when it comes down to it, it's a little bit of sacrifice for significant savings. If the bottom line is important, they should look at standardization and aggregation. These contracts are able to incur savings and it's up to the ASC to say that the savings warrant driving compliance initiatives.
Q: What role do you see standardization playing in ASCs in the future?
RP: ASCs have the ability to standardize, but that's different than actually wanting to streamline supplies. We work with ASCs that have physician- and procedure-specific case cards and custom procedure trays to drive compliance where possible. The customization is an extra expense, but if you have an ASC that's willing to standardize other products, then you have the ability to drive savings. There are significant savings to be had as reimbursement shifts closer to Medicare rates than before.
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