Supplies are your ASC’s second highest overhead expense. So if you want your ASC to profit amidst flat reimbursement levels, you must spot and stop all inventory inefficiencies.
“As far as specific items go, you are only going to be able to get the price down so low,” says Sam Goldberger, MD, MBA, a Beverly Hills, CA ophthalmologist who specializes in oculofacial plastic surgery. To make an impact on your profits, you must scrutinize—and possibly overhaul—the entire supply chain at your ophthalmic ASC. Here’s how:
Look Beyond the Big Stuff
Ophthalmic ASCs spend lots of money on supplies like IOLs, viscoelastic, phaco tubing, and the surgical tray. While it makes sense to cut your largest and most obvious expenses, don’t overlook smaller price differences in lower-priced items. “If the item is high-use, it adds up,” says Dr. Goldberger.
Examples: Masks and shoe covers are two under-the-radar supplies that are high-use cost centers. Some expenses, like janitorial supplies, get overlooked because there’s the assumption of “we’ve always used that vendor.” The lesson? Go over every supply you order—not just the “important” ones—to determine whether there is a less expensive option that doesn’t compromise quality of care.
Shape Up Your Shipping
Shipping and freight makes up 3-5 percent of the average ASC’s supply spend, according to internal data from OptiFreight Logistics. Many centers try to save money on supplies by keeping stock levels as low as possible. However, you’ll run the risk of expensive rush or overnight shipping fees if you suddenly need an item you don’t have in stock (like a speciic premium IOL).
Stocking lenses on consignment is an answer for some centers. You can maintain the right levels of inventory without tying up a lot of capital and hampering your cash flow. that capital might be better used to grow your center in other areas. One caveat? The “bill and replace” cycle of reconciling consigned inventory can be time consuming and requires more frequent communication with your vendors. To reduce staff time and money spent on that task, consider an automated inventory management system if you plan on sticking with consignment for the long haul.
Use Automated Inventory Management
A data-based approach to inventory management is essential to realizing significant cost savings, but many surgery centers still rely on paper records or manual spreadsheets. “Centers that don’t employ the right technology to track and analyze inventory data have a much harder time identifying opportunities to lower supply costs, eliminate waste, and reduce staff time involved in the inventory process,” says Chad Camac, vice president of sales at ManagementPlus. When shopping for a HIT solution, Camac recommends looking for these features:
7 Inventory Management System Must-Haves for Ophthalmic ASCs
- Web-based/wireless capability. Connectivity with your primary suppliers is a bonus.
- User-friendly interface. A variety of staff members will likely use the system, so it should be relatively simple and intuitive. If not, it will be tough to get staff buy-in.
- Systems with a subscription can be more affordable versus one that requires a large capital outlay.
- Real-time tracking and charge capture. Auditing your inventory once a month isn’t enough. Real-time updates help you maintain optimal supply levels, prevent revenue from falling through the cracks, and ensures soon-to-be expired products are used first.
- Analysis of trending data is essential to identifying opportunities for savings.
- Accuracy. Even an error rate as small as 5 percent could result in significant financial and material waste.
Physician spending on items outside of the surgical kit varies dramatically, says Chris Kassen, who served as vice president of supply chain operations for Surgical Care Affiliates, in his recent Becker’s ASC Review webinar. If you can get all of your doctors to agree to the same supplies, you can negotiate better deals for surgical packs that include those supplies.
If getting all of your surgeons to agree on anything sounds impossible, take heart—and stick to the data. Target procedures with a high variance in supply costs per surgeon, and low reimbursement, advises Kassen. In the average ophthalmic ASC, it’s not unusual for supply cost per cataract procedure to vary by $75-$100 among physicians, he says.
Tip: Peer pressure—the good kind—is a great way to influence change, so consider appointing a “physician ambassador” to lend credibility to your mission and bring colleagues on board.
Choose a surgeon whose case costs are significantly lower than others. Look at the supplies he or she is using, present them to other physicians, and ask if they would be interested in using that new supply.
And don’t overlook pharmaceutical choices. Pharmaceutical spend tends to be less varied among physicians than other materials, but that doesn’t mean drug preferences don’t deserve a closer look. Choosing generics over brand name drugs can save a center thousands of dollars over time.
Don’t forget to regularly update your surgeons’ preference cards to make sure the supplies they’ve indicated are the actual supplies they still use. “If your surgical staff is on point, they will have noticed if a surgeon is no longer using a kit pack item during surgery, and should bring that to your attention,” Dr. Goldberger says. But that’s not always the case, especially if your facility has many rotating surgeons.
Rethink Your Processes
“There is often a ‘knee-jerk’ response of opening up all supplies ahead of a case,” says Dr. Goldberger. But even the basic supplies used in a procedure can differ depending on the case’s particulars. “Not every ptosis repair is done the same way—some require different sutures than others,” he notes. “BSS bottles are opened routinely for all eye procedures that need irrigation, but if the procedure is not intra-ocular, then less expensive normal saline can be used,” he continues. Whenever possible, try opening supplies only when they’re needed. “Enlisting cooperating of your surgeons and clinical staff could really minimize your expenses,” Dr. Goldberger says.
Practice Proper Care
Because the price of disposables like bipolar pencils, retinal forceps, and phaco tubing continues to increase, some ASC managers assume that reusable items are a better deal in the long run. Not so, according to Dr. Goldberger. “Reusable items may indeed offer cost savings, but they are not the right choice for every ASC or even every surgeon,” he says.
For example, some surgeons prefer disposable blades while others prefer a reusable diamond blade. But “in a high-volume surgery center, it can be hard to properly maintain reusable items according to the manufacturer’s guidelines,” Dr. Goldberger cautions. Take an honest look at whether or not your facility and staff can safely and efficiently maintain reusable items. “Untrained or rushed staff can damage instruments, leading to expensive repair or replacement costs,” Dr. Goldberger warns.