With reimbursement tightening, costs increasing, and supply chain challenges growing, ASCs must find ways to make smarter equipment and supply purchases that reduce expenses while helping ensure clinical staff have the tools they need to consistently deliver safe, high-quality care. Furthermore, sound equipment purchasing strategies can translate to numerous operational and financial opportunities. To achieve these benefits, ASCs are increasingly turning to and relying upon technology.
Here are 10 ways purchasing technology is supporting surgery center improvement efforts.
As you read through the ways technology is helping ASCs below, you may spot a recurring theme. Technology is allowing ASCs to get more of their work done — or more work they’ve wanted to do — while reducing staff workload.
In today’s environment, this benefit is substantial. ASCs, like most of healthcare, are struggling with staff recruitment and retention. They’re also spending more to support staff and staffing-related efforts. ASCs can add and leverage technology that allows them to streamline the completion of responsibilities and projects as well as automate previously manual processes. Investments in such technology is helping surgery centers better navigate staffing uncertainties and cost increases while also achieving improvements in performance, efficiency, and productivity.
When considering the cost of an equipment or supply purchase, whether for product research, case costing, comparing different vendors or other purposes, the number focused on is often what is considered the “price at the pump” — i.e., what the product is priced and would be sold for. While this figure is important, it does not exist in a vacuum. Technology is helping ASCs better calculate the “true” cost of equipment and supplies by factoring in everything from financing fees, to prompt pay discounts, to overdue payment fees, to return and exchange fees, and other factors, all of which can affect the true cost — and possibly in a significant manner.
By improving their ability to calculate “true” purchasing costs, technology is also helping ASCs perform more accurate and complete case costing. Such data is then used to more effectively identify areas to target for growth (e.g., highly profitable procedures and specialties; high-volume, low-cost procedures) and worthwhile cost-cutting initiatives.
In addition, this data is providing greater, more accurate insight into surgeon- and procedure-specific costs, allowing ASCs to better perform internal and external benchmarking. This allows surgery centers to more easily identify areas for improvement and best practices to further adopt.
In 2007, Amazon.com announced the launch of its “Subscribe & Save” feature that offered customers the ability to identify products they wanted on a routine basis, pre-schedule those products to be ordered and delivered, and receive a discount on their orders. Amazon.com still offers this feature and has since expanded consumer control of it, allowing shoppers to schedule more frequent orders. Numerous other companies offer a service like “Subscribe & Save.”
Technology is allowing ASCs to leverage similar automation of procurement and payment with their product vendors. This is helping surgery centers better ensure they have the products they need in their inventory and have confidence that more products will be delivered before they are needed. In addition, by using technology in this manner, ASCs are engaging their vendors in discussions about savings that should be associated with ongoing purchases, bulk purchases and prompt payments.
Whether small or large, purchases always have one thing in common: data entry. Whenever an ASC makes a purchase, someone must document the information associated with that purchase — everything from the purchase order number, to the price, to the vendor, and much more. Technology can help reduce manual procurement data entry and often automate documentation. In addition to the efficiencies associated with reducing manual data entry, ASCs also benefit from the decreased likelihood of human error.
Consider that Quality Magazine notes that research indicates the average error rate in manual data entry is about 1%, with that figure fluctuating when data being entered is complicated, if the individual entering the data is tired or in a hurry, or if someone has handwriting that is difficult to read — all challenges that can be associated with ASC purchasing data entry. A single error out of every 100 data points can lead to issues that waste significant money and time for surgery centers.
Technology is allowing ASCs to gain better insight into how well their equipment and supply vendors are meeting purchasing needs and expectations. This covers a wide range of areas and metrics, including on-time delivery, quality of equipment, prompt payment discounts, bulk discounts, ease of ordering, ease of payment, and timeliness of exchanges and refunds. By gaining access to data and information concerning the performance in these areas, ASCs gain the enhanced ability to compare vendors and negotiate or renegotiate contracts based upon expenses and performance parameters.
If ASCs are hoping to engage their surgeons more effectively in discussions about changes to preference items that can help reduce costs and increase case profitability, centers will be best served by bringing concrete data to share with their surgeons. This data may show the cost difference between like pieces of equipment, the cost difference from one surgeon to another for the same procedure, or bulk purchasing opportunities, for example. Technology is allowing ASCs to track and gather this and other data and then generate reports that are helping get surgeons on board with making cost-effective changes to the equipment they use.
Equipment purchasing is not a foolproof process. Errors will occasionally occur. While an ASC can hope that its vendors will catch and resolve these mistakes, surgery centers should not assume this will happen. Technology is providing ASCs with a streamlined method of comparing its procurement and payment data, helping centers identify overcharges, unprocessed refunds, undelivered products, missed bulk purchasing and prompt payment discounts, and other problems affecting the bottom line.
When ASCs need to make a big equipment purchase, they often secure a loan from a bank. But this is usually not a wise financing path as the interest rate can be unnecessarily high. Technology is providing ASCs with the payments and disbursements data that allows them to gain a better understanding of when payers typically pay claims and when equipment vendors need to be paid. With this information, an ASC will be better positioned to make more intelligent, data-driven financing decisions, such as taking on a small loan note directly with the equipment vendor.
Whether ASCs are pursuing more traditional fee-for-service managed care contracts or looking to engage in value-based care contracts, understanding the direct and indirect expenses associated with the procedures that will be covered by these contracts is critical. Technology is providing ASCs with more exact purchasing data that is helping centers determine what payment rate to accept for individual and groups of procedures, bundles, and episodes of care. This data is also helping surgery centers calculate appropriate patient self-pay rates.
Finally, with equipment and supply expenses as one of the two highest costs for ASCs (along with staffing), ASCs must make sure they perform effective inventory management. Poor inventory management can lead to unnecessary and incorrect purchases, over-purchasing, misplaced or lost supplies, expired supplies and even unnoticed theft. Technology is helping ASCs avoid these problems and achieve a better managed inventory that keeps equipment and supply spend at expected levels. In addition, technology is providing insight into an ASC’s inventory that’s allowing centers to make better timed purchases that help with maintaining a lean inventory, reduce waste, and provide significant cost savings opportunities.
New technology has come onto the market that’s helping ASCs achieve the types of equipment purchasing improvements they’ve long wanted and now need more than ever. The innovative, intuitive and intelligent triValence solution is simplifying the ASC infrastructure and making it easier and possible for surgery centers to capture and analyze purchasing data that lead to transformative changes.
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