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who perform knee arthroscopies in your ASC, you should have five dif- ferent preference cards for that pro- cedure, one for each physician delin- eating his/her individual preference. You can use these preference cards to keep track of exactly which supplies you are using. You can also use them to determine if you should remove certain supplies from inventory. Ad- ditionally, your center should be or- dering supply items only with pur- chase orders tied to your inventory computer system. Using these two components, the process of main- taining your inventory on a perpetual basis should be significantly easier. When you reorder supplies, the best method for knowing how many of an item you should purchase is to establish reliable par levels. Par levels are basically a set figure that equates to the number of a specific item that you will need in the near future, i.e., the next five days. For example, if you have an item that you use 25 times a week, you might set your par level for that item at about 35 or 40. That is the number of that item you should aim to have on hand at all times. A good standard would be to set the par level for all of your items at about 1.5 to 2 times the amount that you typically will use in a week. You should ad- just and manage your par levels con- tinuously based on actual usage and changes to your operations.


Actively Seek Cost Savings Another trick that I use to help reduce supply costs each month is to ask the ASC’s materials and purchasing man- ager to identify two or three supplies items that the ASC uses frequently and to find a way to purchase them at a lower price. Even if there is only a 15- to 25-cent savings per item, those savings can add up quickly. Typically, to identify these items, I ask the pur- chasing personnel to look at high- dollar items or high-usage items. Then, I ask them to compare their


contract group purchasing organiza- tion (GPO) pricing with pricing avail- able from their main distributor and look for a similar item that is com- parable in quality but less expensive from a different source. Because pric- ing through your GPO might change throughout the year as items come on and off contract, someone on your ASC’s staff must constantly moni- tor contract pricing of each item and verify that you are getting the correct pricing every time an order is placed.


Make your Supply Vendors Work for you


Because sales representatives are un- der constant pressure to maintain and increase their revenues for their com- panies, even your favorite vendor may not be assisting you in identifying po- tential cost-saving ideas. I challenge the ASC managers who I work with to bid their supply purchasing from one distributor to the next periodically. This is the only assured method of getting the absolute best price. Usual- ly, you will not get a discount on your supply items unless you ask for better rates. There is almost always room for negotiating a better price if you know how to ask for it.


Rules for Negotiating: 1. When you compare the cost of two similar items, be sure to com- pare their quality as well.


2. Never give a competitive vendor the price that you are already pay- ing. If you do, they will either match it or give you just a small savings. If you don’t give them your


current price, give you a better rate.


3. Never accept the prices that you are given first. Always ask for bet- ter rates.


4. Negotiate and put your vendors up against each other to bid down your supply costs. Annually, look at the top 50 items you use most often and the top 50


they might


most expensive items that you use throughout the year. See if you can get better rates on all of them. Every vendor is going to have some prod- ucts that are better priced than others. There is no rule, however, that says you have to obtain all of your items from one vendor, although sometimes vendors offer a discount or additional incentives and reductions if you order a large percentage of items through them. It is important to evaluate if the additional reduction is larger than ac- tually lowering your unit item cost by using a different vendor.


Standardization Finally, one additional opportunity to garner savings in your supply costs is to convince your physicians to standardize their supply items. When you have pref- erence cards for individual physicians for all of the light procedures they pro- vide, accommodating their individual supply requests can create more items in storage than you actually need and tie up your money on the shelf. Ask your physicians to standardize as many of the products that they use as possible. Using case-costing, it is easy to show each physician in your ASC what the other physicians are doing. Often when this information is presented correctly, most physicians will at least consider changing their supply item if they can- not justify the higher cost. This process can be particularly successful because nobody wants to be an outlier. At ASCA 2013, you will find many more ideas for cutting costs and im- proving revenue. You’ll also get the lat- est regulatory news, clinical updates, one of the best networking opportuni- ties of the year and much more. I look forward to seeing you in Boston.


Arthur E. Casey, CASC, is the senior vice president of business development at Outpatient Healthcare Strategies, a con- sulting management services firm based in Houston, Texas.


ASC FOCUS FEBRUARY 2013 9


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