Becker's ASC Review

Supply & Materials Management 4. Negotiate beneficial service agreements. One of the major expenses that often goes unknown and unseen at ASCs are service agreements and Preventative Maintenance contracts. These agreements are really critical to the center's profitability and there is typically room for negotiation, so don't take the first price companies quote. "The first number should be thrown out," says Ms. Gagliardi. "I review just about every service contract in conjunction with our ASCs when we have new capital orders and I factor in a 15 percent discount on the first proposal." In some cases there are companies that offer one-stop shopping for service agreements and if you can negotiate with a third party to service all of your service agreements you can realize up to a 30 percent discount."  The third party company will send a single representative who can help service all equipment; this can instantly drive down cost.   "For anything from the C-arm to the video equipment there will be one specialist instead of 10 different people coming in and repairing at different levels," says Ms. Gagliardi. "We also keep a service log of when PMs are due, and at least 90 days prior to the end of the agreement we evaluate the agreement and re-negotiate. Not every agreement ends on the same day so keeping an updated log and negotiating continually on those agreements is key." 5. Negotiate freight savings. Surgery center administrators are beginning to find ways to save on freight costs. In some cases, administrators can negotiate with a company such as OptiFreight, which has a set price with companies like UPS and FedEx which will save  up to 65 percent off inbound and outbound shipping cost. "It requires about five hours of work on the back end from the surgery center to set up the system, but once this program is set up, the process manages itself," says Ms. Gagliardi. These services have been around for awhile, but have only gained traction over the past few years. "The company provides online access and savings tracking with very intuitive systems," she says. "You can continually monitor what you save and evaluate those savings on a monthly basis." 6. Purchase less expensive commoditized implants from small companies. There are some implants and materials that are truly commodities and ASCs can purchase quality products at a reduced cost from wholesale 35 suppliers. These companies are able to offer cost savings because they don't place device representatives in the operating room during cases. "The newest emerging trend, which I think will be gaining market share over the next two years, is smaller companies that have obtained FDA approval on items such as  plates, screws and Kwires," says Ms. Gagliardi. "We will be able to realize significant savings once we can work with our physicians and get them comfortable with a product that doesn't have a big name behind it. Regent is in the process of trialing these products. The key is engaging clinical staff, administration and surgeons."  For simple cases, surgeons can train clinical staff to assist them without device company representatives, which eliminates the cost of commission. However, make sure patient safety and quality aren't compromised with these devices. "If we can prove this is acceptable clinically for patient safety, we can use common products from these one-off companies," says Ms. Gagliardi. "I see that coming in the future, specifically for those centers that are fiscally minded and want to attack costs at the ASC at every level. Purchasing from one-off products can realize a 30 to 50 percent savings on implants and high cost disposables."  n

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