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Save Money on Supplies

Come to ASCA 2013 to learn about this and other cost-control strategies. By ARTHUR E. CASEy, CASC

Supply cost is one of the two largest variable expenses that a center can control (salary is the

other). During my

presentation “How to Leverage Your Relationships with Your Supply Ven- dors to Get Better Performance” at ASCA 2013, April 17–20, in Boston, I will share some of the techniques that I have used successfully to keep costs down and run an efficient ASC. Some of the topics I will cover


Inventory on Hand Supplies

are controllable through

inventory. As a general rule, you should turn over the value of your inventory every 30 days, a process commonly described as 30 days in inventory. You can calculate days in

inventory for your ASC using this two-step

process. First, take your

total supply cost for the month and divide that number by the number of days in the month. (That gives you your supply cost per day.) Second, di- vide that number into the total value of your total inventory. That number is your days in inventory. If you want to eliminate potential

monthly swings that can occur due to the timing of your invoices, you can take your total supply costs for three months, divided by the number of days in those three months, divided into your total inventory to determine your ASC’s days in inventory. Another quick way to stay on top of inventory is to make certain that your total in- ventory on hand is never larger than your average monthly supply expense. I recommend using just-in-time in-

ventory and purchasing. Don’t order supplies in bulk if you can avoid it, especially if those supplies will take two months or more to use. Inventory sitting on the shelf just wastes mon- ey by tying up your cash. Evaluate whether it makes sense to return items that you no longer use, even if there is a restocking fee. Typically, you will still come out ahead. Another common problem that ASCs encounter with inventory is storing a particular item in too many locations. When the same item is stored in too many places, you can easily end up having three or four boxes of that item when one would be more than adequate. Designate a limited number of places to store a given supply. Additionally, it is not unusual for staff members who have run short of supplies in the past to hide and hoard products in an attempt to ensure that they won’t run short again. The more supplies you have on the shelf, the less money you have on hand to use elsewhere. Go through your fa- cility regularly to collect items and put them in their proper location.

Perpetual Inventory, Preference Cards and Par Levels Managing your inventory can be easy if you stay on top of it. The most ef- fective inventory process is perpetual inventory, an approach where inven- tory accounting is updated continu- ously as transactions are made. With this system, the book inventory is usually very close to the real inven- tory. The best way to maintain per- petual inventory, and the best way of knowing what supply items you need, or have used, is to use a computer in- ventory system that has the ability to track physician preference cards. Your ASC should have a physician- specific preference card for every procedure that is performed. For ex- ample, if you have five physicians

The advice and opinions expressed in this article are those of the author and do not represent official Ambulatory Surgery Center Association policy or opinion. 8 ASC FOCUS FEBRUARY 2013

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