Run tight ship to keep outpatient facility afloat
Run tight ship to keep outpatient facility afloat
Key is to cut cost of supplies
As the recent Medicare changes force managers in outpatient centers to look at ways to cut expenses, they should take a close look at what they're paying for supplies, one outpatient expert suggests.
Large health care organizations are able to negotiate lower prices for supplies because they can promise the suppliers that they will make larger volume purchases, says Jennie Simmons, RN, CPSN, president of Surgery Center Consultants, an Atlanta-based group purchasing organization that represents 135 surgery practices. Previously, Simmons was an administrator at an Atlanta outpatient surgery center for eight years.
Traditionally, locally owned ambulatory surgery centers (ASCs) have had little clout in negotiating lower supply costs because they don't purchase large enough volumes, Simmons says.
Another problem has been that the people in charge of buying supplies for these outpatient facilities often are not familiar with supply purchasing, Simmons adds. "They may not know if this particular item is a good price and where you can find a certain product."
However, Simmons says, outpatient facilities may improve their supply and equipment purchasing habits by following these guidelines:
1. Buy good used equipment.
If you've been working with your medical equipment supplier for a number of years and have grown to trust the supplier, consider buying some used equipment from the same company, Simmons suggests.
"You will need to check it out and check with the people who have purchased the equipment previously," she adds. "Also, make sure the parts still are available and that the manuals are included with the used equipment."
2. Join a group purchasing organization.
A group purchasing organization provides individual outpatient centers with the clout they could not command on their own. When the group purchasing organization manager negotiates with suppliers, he or she can guarantee the purchase of thousands of a particular item instead of dozens, and therefore negotiate price cuts, Simmons says.
Consider other possible discounts
Group purchasing organizations also may be able to negotiate discounts on linen service, biohazard waste disposal, and medical insurance for its members, Simmons adds. (See names of two group purchasing organizations, p. 62.)
3. Discuss costs with your anesthesiologists.
"You need to make the anesthesiologists very cost-conscious because many of them come from the hospital setting, and they are not aware of the costs of particular drugs," Simmons says.
The outpatient facility manager should talk with the anesthesiologists to establish basic protocols for creating an inventory of the drugs, Simmons says. These protocols will help a surgery center avoid tying up a large amount of revenue in inventory through storing rarely used pharmaceutical supplies.
4. Find low-cost office supplies.
"Many times I find the Office Depot down the street has been so competitive in costs that it's competitive with what you're buying through a group purchasing organization," Simmons adds.
Also, remember that everything can be negotiated with your supplier - even printing supplies, she says. So if you have found a less expensive price somewhere else, tell your supplier about it.
5. Use your supplier's software to help with inventory control.
Most medical suppliers will provide clients with an inventory purchasing program with which they can place orders and immediately see the price, Simmons explains.
"It will print out an invoice and let you know if the item is on back order and what the substitute availability is," she adds. "This is available to customers for free from some companies, and all you have to do is ask for it."
The other advantage is this will save the facility staff time since there will be no need for phone calls and waiting for an invoice to be processed.
Also, outpatient facilities should limit their list of suppliers.
"Some small clinics are ordering from 20 different companies to save a few pennies," Simmons says. "But what is your time worth? It's much more cost-effective to use an inventory control program and one supplier."
6. Switch to custom packs.
"One of the best recommended practices now is to buy custom packs," Simmons says.
Custom packs are being created for a variety of procedures, and they are a good way to keep a tight control on inventory costs, Simmons says.
"I used to be anti-custom packs because I thought I could buy the individual items at a lower cost - maybe save $3 to $4 on the surgery package," Simmons says.
Since suppliers typically sell supplies by the case, custom packs end up being less expensive because they prevent a facility from keeping too much of its money tied up on supply shelves, Simmons explains. For example, if a facility orders a $200 case of custom packs for a facelift procedure, then it will have enough supplies for four procedures. Each custom pack might have 20 to 30 individual items, Simmons says.
But if the same facility were to put together those 20 to 30 items, it would have to spend perhaps $3,000-$4,000 on cases of each of those items and store the hundreds of leftover items, she explains.
"The extra inventory of medical supplies on the shelves is money sitting in your supply room," Simmons says. "Also the extra inventory requires more extensive inventory checks and increases the likelihood that items will be used unnecessarily."
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