Becker's ASC Review

87 Executive Briefing: Orthopedic ASC Supply Chain Management Sponsored by O rthopedic surgeon Gary Sherman, MD, discusses how Read-for-Surgery™ concepts from Flower Orthopedics help ASCs become more efficient. 1. ASCs are looking for cost-savings as reimbursement tight- ens. Although orthopedics will remain profitable, "expect things to get tight" as reimbursement rates narrow, Dr. Sherman says. A Read- for-Surgery™ standardized, single-use bone fixation concept helps make ASCs more cost-effective and efficient. Otherwise, washing, wrapping and sterilizing the instrument tray can cost $85 to $100. 2. Old device company relationships may need disruption. Re- evaluate vendor contracts to lower supply costs. Surgeons develop long-standing relationships with certain vendors but other options are available. "Unless there's a difference in clinical outcome, im- plant choice may not make a difference," Dr. Sherman says. 3. Fracture care will continue to shift from hospitals to ASCs. Going forward, the shift of fracture care from hospitals to surgery centers will only get stronger, according to Dr. Sherman. Fracture care isn't urgent, and ASCs can offer superior care. The ASC As- sociation Outcomes Monitoring Project shows more than half of ASCs nationally have infection rates of zero. Furthermore, a 2004 Archives of Surgery study found ASC patients were less likely to require unscheduled follow-up treatment at the emergency room or hospital within seven days of surgery. n F lower Orthopedics — maker and manufacturer of the innovative FlowerCube™ for orthopedic im- plants — and supply chain giant McKes- son Medical-Surgical teamed up recently in a new partnership poised to take on the traditional orthopedic distribution model for ambulatory surgery centers. "Orthopedics is a very complex business and can be very difficult for surgery cen- ters to manage and control. From jug- gling multiple implant trays to deciphering vendor pricing, orthopedics can be very inefficient, something that surgery centers cannot afford, which is why McKesson and Flower Orthopedics together is so compel- ling. With Flower, we combine a disruptive product solution with a proven distribution infrastructure to addresses key customer needs: 1) simplify the supply chain and de- liver the right product at the right time, 2) offer transparent pricing and 3) provide a best-in-class customer experience — all of which result in savings and efficiencies," says Mike Waldman, Senior Manager, Sur- gery Centers Marketing at McKesson Medi- cal-Surgical. "Our collaboration with Flower Orthopedics is quite different for a tradition- ally direct vendor market. You don't see a lot of relationships like these right now, but depending on the timing and the market I think it's a potential trend for the future." Flower's cube concept is a new innovation in a mature market where ASCs can pur- chase commoditized implants at whole- sale prices. Here are five key trends in ASC supply chain management: 1. Rep-less models are king. Traditional supply chain models rely on sales represen- tatives which add expense to the case. New company models, as exemplified by the Flower-McKesson partnership, forego the sales representative and give supply chain control back to the center. The prices are transparent and there are no hidden fees. 2. Open space in the supply closet. A crowded supply closet leads to clutter and expiring materials, which has a negative im- pact on the center's bottom line. "If you are a high volume surgery center that has 25 in- strument trays sitting in your storage room, that's a problem," says Mr. Waldman. "A so- lution like the FlowerCube™ can help create a smaller footprint of space. And with McKes- son's next-day delivery service, you only need enough product for that day of surgery." 3. Customization is key. The Flower- Cube™ can be customized based on sur- geon preference so only the items needed are included. "Flower and McKesson sales representatives will help optimize a sur- gery center's FlowerCube™ by meeting with the physicians and determining what plates and screws they need for their pro- cedure type," says Mr. Waldman. 4. Automation makes the process easier. Automation is taking over healthcare and supply chain ordering and management is no exception. Now companies have online platforms like McKesson's SupplyManager which allows ASCs to search for their de- vice and place an order within minutes. "All of Flower Orthopedics' products are inte- grated into our SupplyManager website, which is more than just a supplies order- ing portal. For example, a multi-site surgery center can develop formularies of common implants and use expense management tools — providing more insight and control into their orthopedic spend than ever be- fore," says Mr. Waldman. 5. True partners create efficiencies with a streamlined approach. Device com- panies and manufacturers are looking to partner more closely with ASCs to really help their business run better. In the ma- terials management arena, streamlining the ordering process helps the center run more smoothly and provides cost-savings. "You have one invoice coming from one source with all the medical-surgical, phar- maceutical and implant supplies. This helps play a major role in driving additional ASC efficiencies." n The Future of Orthopedics in ASCs: 3 Key Thoughts By Helen Adamopoulos and Laura Dyrda 5 Supply Chain Management Trends By Laura Dyrda

• Cover