Archive May 2015 XVI, No. 5

Business Advisor: 5 Supply-Saving Solutions

Reducing case costs frees up funds for investing in the future.

Corrie Massey

BIO

money on the table BONUS BENJAMINS Efficient supply management is like finding money on the (back) table.

Next to staffing, supply costs are a surgical facility's biggest expense. Here are 5 strategies to contain your supply costs without sacrificing quality. You can use what you save in supplies to help maintain your facility's profit margin and physician-owner dividends, invest in new service lines, fund equipment upgrades, and keep you and your staff nicely compensated.

Standardize as much as possible. Start by case-costing, particularly for implant-heavy cases like hernias, cataracts, orthopedics, and urology and gynecology (slings and bulking agents). To achieve the biggest financial impact quickly, focus on the financials of the most frequently performed cases. If you find, for example, that rotator cuff repair costs vary widely between your surgeons, do a little more digging. If Dr. Ortho always converts to an open repair from an arthroscopy, it could be saving OR time, but costing more in materials. Be sure to account for those types of variances in your analysis. If you find OR times and implant or materials costs are all over the map, involve your surgical team to determine next steps. It may be an easy conversation with a particular surgeon about his techniques or it may require a physician group discussion led by your medical director.

When cost variance is not due to implant costs, try to pinpoint other opportunities for standardization. One example is the use of procedure packs. Custom packs are convenient for staff, saving them time when they're opening cases. However, custom packs can cost more than standard issue packs.

In addition, if a single component of your custom pack is on backorder, production of the entire collection of supplies can be derailed. Making changes to custom packs can also be tricky and expensive, especially if your volume is low and your contract commits you to using all of the packs on hand before change requests are fulfilled. On the other hand, pre-source packs are more varied in their offerings than they used to be and are usually more readily available, without the lag in production associated with custom packs. Choosing a more basic pack lets you add custom components without affecting production and delivery.

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