Stony Brook Ambulatory Surgery Center is an eight-OR ASC that functions as a hospital outpatient department of Stony Brook University Hospital, a 540-bed tertiary care academic medical center. Opened in 2002, the ASC now performs 7,500 procedures a year.
As a multi-specialty center, our inventory consists of a wide variety of surgical supplies and implants. Staff has always been concerned with having adequate inventory on the shelf, not wanting to be without that special item needed to complete a case. With no standardized process for reviewing par levels or counting inventory before ordering, a more-is-better culture developed. Costs were not factored in.
As storage space became an issue and outdated supplies were increasingly found throughout the center, we knew it was time for a change. After a formal assessment, we overhauled our ordering and inventory-monitoring systems. The key results:
1. Days-on-hand decreased from 144 days to 44.
2. Weighted days-on-hand inventory decreased from 156 days to 46.8 days.
3. On-hand inventory dollars decreased from $239,480 to $126,000.
4. Med/surg supply cost per case decreased from $360 to $319 (an 11 percent savings) after the first eight months of the program.
Here are the six steps we took to achieve these improvements.
1. Identify high-use items. These items, which account for about 20 percent of the supplies we buy, make up about 80 percent of the budget. They aren't necessarily expensive, but the quantities are high, so there are lots of opportunities here to uncover savings.
Some examples of our high-use items:
orthopedics several types of screws and anchors, fiber loops
ophthalmology iris retractors, crescent knives, laser knives, viscoelastic
other needles for breast biopsies, ports for breast cancer treatment, disposable probes for cryotherapy and endometrial ablation
2. Develop appropriate inventory-recording worksheets. We have an inventory-count/order call-in sheet for the nurses assigned to each specialty to use as a guideline. It lists minimums and maximums for each supply in our inventory, so they can quickly assess whether we have enough on hand, then determine how many of each item needs to be ordered. They hand it to my assistant, who completes the placing of the orders through our electronic purchasing system, so purchasing (which is done bi-monthly) is centralized.
On a monthly basis, we do a count and determine days-on-hand for inventory. From there, we are able to plug the number of each supply and the days-on-hand into a worksheet and determine how much money we have invested in on-hand inventory. Being able to see this figure brings home the impact of our inventory on our budget.
3. Educate staff on proper use of par levels. Keys here included appropriate identification of items to be included, eliminating consignment items that kept appearing on inventory count lists (consignment items don't affect our bottom line because they're not ours, and we only pay if we use them) and counting errors.
The last of these was the biggest issue, but it was easily corrected. Staff would vary the way they counted certain items for example, instead of saying that we have a case of thermal balloons, someone would say we have 5 on the shelf. We buy these balloons by the case, so that was interpreted by me as our having 5 cases. If a case costs $5,000, we thought we had $25,000 tied up in thermal balloons when in reality we had only one case of 5; there's a big difference between those figures.
We trained everyone to count according to the way we purchase. If we purchase supplies as eaches, they are counted by the each; if we purchase by the case, they are counted by the case. This standardization has contributed greatly to our data integrity, which is key to reducing supply costs.
4. Set minimum and maximum levels using historical data. One of the keys to success when re-setting par levels is to initially set them a bit higher than might be necessary; that maintains staff comfort level; as they see that they can live with those par levels, you can scale back some more.
We actually set minimum and maximum par levels about two or three years ago and monitored usage, but not in any formal way. A couple of months after we started using the master inventory sheet last year, I made some adjustments, because the nurses were following the maximums too often.
Take, for example, iris retractors, one of our high-use items. The maximum used to be set at 14 boxes per month, the minimum at eight. The inventory count was often as high as 10 or 12 boxes. Now, we've ordered just over 100 boxes in the last 12 months that works out to an average usage of nine boxes per month. So I moved the maximum down to 10 (and the minimum down to six). These cost $100 a box, so simply by going from 14 to 10, we've saved $400 a month; you automatically save that money by not ordering those extra boxes.
Another good example is valves for glaucoma: These cost about $670 apiece and we only use perhaps two per month. We were keeping six on the shelves. I need to do it slowly, to maintain that comfort level, but in March, I cut the maximum to four that's an instant savings of $1,300. And in another couple of months, I'll cut from four to three.
We order every other week, so if we have a sudden influx of a certain kind of case, it's not as if we'll be left high and dry. If our volumes really are increasing over the long-term, and it's not just a blip, I'll adjust the maximum level for a particular item back up.
5. Eliminate items. Once we were more closely tracking days on hand, we were able to identify some items that we had in inventory whose quantity never changed because the items simply weren't being used. In our case, there were some cutters and cannulas for arthroscopic surgery that, over time, we had switched from one vendor to another (but the previous stock wasn't used up first). When these items kept appearing with the same inventory count, we spoke with the surgeons and eliminated them entirely.
6. Know there will be exceptions to the rule. We have to justify to the director of supply chain for the hospital any supply that has a weighted days-on-hand of more than 47 days. That keeps us looking constantly at everything and making adjustments as necessary.
Sometimes, timing is the issue for an exception: We just get an order in, and the next day is the count. But over the course of a year's usage, it's consistent. In other cases, you can't have just one of an item. For example, with tissue such as Achilles tendons, you may only use something like that every few months, but you need to have it on hand because you just never know; and you have to have two in case one gets contaminated.
If there is a solid, real reason that an item has been in our inventory, it's OK.
A continual process
Our fiscal year ended June 30, and because we came out under-budget, I was able to buy some pieces of minor equipment and instrument sets surgeons and staff was hoping for. The state of the economy has led to across-the-board budget reductions at our hospital; maintaining these measures and moving forward with new ones such as more procedure-based delivery systems, rather than buying supplies individually will let us continue at the same level of service, despite less money to do it.
Ms. Catalano (mcatalan@notes.cc.sunysb.edu) is the administrative director, perioperative services, at Stony Brook University Medical Center in Stony Brook, N.Y.