Supply Chain Management Inventory Control The Basics Amy Gagliardi, Corporate Purchasing Director ASCs 2010 Conference, May 19-22, 2010
The Basics of Supply Chain and Inventory Management Integration Control Strategic Focus Supportive Structure Empowerment Physician Support Consistency Skill Set Organization
Integration The supply chain must have appropriate integration with clinical systems, revenue cycle, IT and clinical operations. The supply chain can no longer be viewed as a back dock support service that provides products and services required by clinical staff.
Integration Weekly Meetings with Director of Nursing, Administrator, Business Office Manager Staff Meetings How much does this cost? Reporting Education Do your employees know that materials management can exceed 35% of your operating budget and that approximately 20% is supply cost?
Control Who is ordering supplies and signing contracts? All GPO relationships, inventory management, purchasing, vendor relationships and contracts, along with financial and inventory reporting should funnel thru your organizations supply chain. Materials Managers must play an integral part in an organizations annual budget process. Utilize your GPO budget impact projections and pharmacy drug price forecast. Financial Statements Read and understand your impact on monthly statements Revenue Cycle Understand the reimbursement for each case, specifically implant intensive procedures.
Strategic Focus Supply Chain management should focus on total impact of care, not just cost. The strategic value should affect both the patient outcome and the cost of care. Spend time in the OR Materials Managers should review all clinical benchmark reports Focus on procedure specific outcome indicators for quality, risk and safety. Learn the differences in Anesthesia, Pre Op and PACU medications and their affect on clinical outcomes.
Supportive Structure Position yourself to take advantage of supply chain opportunities. Maximize your GPO contracts Have 1 primary and 1 secondary GPO Have a market basket run annually Take advantage of all rebate opportunities
Supportive Structure Regional Contracting Service Contracts Reprocessing Office Supplies Shredding Companies Floral Delivery Foodservice Fully integrate your Information Management System
Empowerment The Basement or the Broom Closet The physical location of the materials manager should be positioned to enforce central purchasing, improve inventory management and to aid in the redesign of logistics and procedures across the organization.
Solutions for space restriction: Daily transaction meetings with Business Office Manager/Accounts Payable to review disputed invoices price changes Weekly meetings with Administrator & DON Empowerment Ideally, the materials office should be in close proximity to the Business Office Manger or Accounts Payable
Physician Support You must pick your champion Administration and DON are critical to this process Provide proper and accurate data and metrics Continually increase awareness of supply issues and strategic importance Staff meetings Board meeting
Consistency Accurate Reporting of supply costs, variations and price increase/decrease must be reviewed monthly Case costing reports, both supply usage and revenue/cost reports must be run quarterly Semi annual inventory value reports should be reviewed Materials Managers must engage with their peers as a unified industry in order to have a strong voice when engaging manufacturers. ASC Foundation benchmarking Your Management Groups benchmarking Benchmark within your facility
THE NEW SKILL SET With the ever changing landscape of healthcare and challenges with reimbursement, materials managers can no longer focus solely on processing requisitions, placing orders and stocking shelves. In order to move towards a focused strategic outcome, materials managers need a new skill set.
Analytic Skills Evaluate Spend History and Cost Benefit 20204 IV ADMIN SET PRIMARY *NF1251 CS/50 (OLD# NF1250) 01/01/09 01/01/10 303639 B BRAUN MEDICAL NF1251 Vendor Total: $5,600.43 Contract MS50608 Expiration 9/2011
Analytical Skills Average of Contribution Margin2 Primary Payer Code Procedure LS MCR RR MDCR 11423 EXCISION, BENIGN LESION INCLUDING MARGINS, EXCEPT SKIN TAG (UNLES -$193.95 20552 INJECTION(S); SINGLE OR MULTIPLE TRIGGER POINT(S), ONE OR TWO MUS -$7.09 23412 REPAIR OF RUPTURED MUSCULOTENDINOUS CUFF (EG, ROTATOR CUFF) OPEN; -$699.91 25605 CLOSED TREATMENT OF DISTAL RADIAL FRACTURE (EG, COLLES OR SMITH T -$127.18 29870 ARTHROSCOPY, KNEE, DIAGNOSTIC, WITH OR WITHOUT SYNOVIAL BIOPSY (S -$49.43 62311 INJECTION, SINGLE (NOT VIA INDWELLING CATHETER), NOT INCLUDING NE -$506.93
Analytical Skills Code Procedure Count of Code Procedure Sum of Contribution Margin Average of Contribution Margin 29881 ARTHROSCOPY, KNEE, SURGICAL; WITH MENISCECTOMY (MEDIAL OR LATERAL 49 95,913 1,957 62311 INJECTION, SINGLE (NOT VIA INDWELLING CATHETER), NOT INCLUDING NE 73 23,607 323 45385 COLONOSCOPY, FLEXIBLE, PROXIMAL TO SPLENIC FLEXURE; WITH REMOVAL 14 15,151 1,082 45380 COLONOSCOPY, FLEXIBLE, PROXIMAL TO SPLENIC FLEXURE; WITH BIOPSY, 32 14,649 458 26989 UNLISTED PROCEDURE, HANDS OR FINGERS91665) 1 11,924 11,924 20680 REMOVAL OF IMPLANT; DEEP (EG, BURIED WIRE, PIN, SCREW, METAL BAND 6 11,715 1,952 63030 LAMINOTOMY (HEMILAMINECTOMY), WITH DECOMPRESSION OF NERVE ROOT(S) 1 11,652 11,652
Project Management Experience Leverage cross functional expertise from physicians, clinical staff, finance and administration to reduce cost while improving patient care. Develop a case study on different methods and products (implants and supplies) for Hernia Repairs and their affect on financial and patient care.
Facilitation Skills The materials manager must posses facilitation skills to ensure that different points of view are considered when developing strategies. The materials manager must posses the professional skills to communicate effectively across the organization.
The New Skillset Microsoft Excel Amerinet Inquisit ASC Association GPO publications Professional Society (CPM, HCPM)
Different Theories of Supply Chain Just In Time Inventory The process of monitoring inventory in such a manner as to minimize cost associated with inventory control and maintenance. A just in time inventory strategy can significantly cut the operational expenses of a business in regards to the amount of inventory that must be stored at any one time and the amount of taxes that must be paid on larger inventories.
Just In Time Inventory You MUST have a solid understanding of your inventory needs and the amount of time in which shipping and delivery can be consistently met. This process can only be managed if a current and accurate data base is maintained. You must negotiate a minimum order charge with your distributor/manufacturer.
Consignment Inventory Management Solution Beyond Implants distribution is now offering supplies on consignment. Reduces operational cost. Start with custom packs You must be able to accurately account for usage. BOM/AP involvement
Standard Supply Chain This can be very successful for organization of inventory, maximization of GPO contracts, and accurate database maintenance. The enhancement of technology in IS systems, EDI order capability and barcode technology has greatly increased the efficiency of supply chain in ASC s.
Organization
Managing your Database Inventory No Inventory Description Vendor Name Vendor Item No Vendor UOM Vendor Conversion Factor Vendor Cost Contract No Contract Exp Date Manufacturer Manufacturer No Vendor No Expense Ledger No MASK ANESTHESIA ADLT LG SZ 6 *DYNJAAMASK6 37006 CS/20*** SCISSOR POTTS TENOTOMY CURVED 6" 37024 *CH5675*** CARDINAL HEALTH* 65651-515 CS 100 124.36 MS50392 T1 12/31/2009 CARDINAL 65651-515 CARDINA 50100-00 MEDLINE INDUSTRIES* DYNJAA MASK6 CS 20 26.8 MS60401-T1 12/31/2009 MEDLINE DYNJAAMASK6 MEDLINE 50100-00 CARDINAL HEALTH* CH5675 EA 1 60.01 MS80832 7/31/2011 V.MUELLER CH5675 CARDINA 50100-01 KNIFE SURG HDL#3 METRIC SCALE 5" CARDINAL 37031 *SU1403-001*** HEALTH* LINER SUCTION CANNISTER 1500CC *65651-30120 515 CS/100* SU1403-001 EA 1 4.93 MS80832 7/31/2011 V.MUELLER SU1403-001 CARDINA 50100-02
Managing Your Database Case # Patient Name Doctor Date CPT Code Code Procedure Clinical Labor Minutes Primary Payer Net Revenue ($) 45380 COLONOSCOPY, FLEXIBLE, PROXIMAL TO SPLENIC 8454 BALDWIN, C NALQASSEM 07/01/09 45380 FLEXURE; WITH BIOPSY, 380 MCR 375 17 45380 COLONOSCOPY, FLEXIBLE, PROXIMAL TO SPLENIC 8456 GILLIAM, L NALQASSEM 07/01/09 45380 FLEXURE; WITH BIOPSY, 340 MCR 560 37 45380 COLONOSCOPY, FLEXIBLE, PROXIMAL TO SPLENIC 8458 MELENDREZ, D NALQASSEM 07/01/09 45380 FLEXURE; WITH BIOPSY, 310 LL760 629 17 45385 COLONOSCOPY, FLEXIBLE, PROXIMAL TO SPLENIC 8436 JONES, E NALQASSEM 07/01/09 45385 FLEXURE; WITH REMOVAL 345 MCR 563 17 G0121 COLORECTAL CANCER SCREENING; COLONOSCOPY ON 8406 COX, J NALQASSEM 07/01/09 G0121 INDIVIDUAL NOT MEETIN 315 MCR 731 37 G0121 COLORECTAL CANCER SCREENING; COLONOSCOPY ON 8415 MARRUJO, M NALQASSEM 07/01/09 G0121 INDIVIDUAL NOT MEETIN 240 MCR 356 17 G0121 COLORECTAL CANCER SCREENING; COLONOSCOPY ON 8442 LUNCEFORD, G NALQASSEM 07/01/09 G0121 INDIVIDUAL NOT MEETIN 270 MCR 356 17 43239 UPPER GASTROINTESTINAL ENDOSCOPY INCLUDING 8473 SANDOVAL, R NALQASSEM 07/01/09 43239 ESOPHAGUS, STOMACH, AN 210 BCBS27630 1,182 36 43239 UPPER GASTROINTESTINAL ENDOSCOPY INCLUDING 8486 NICHOLS, R NALQASSEM 07/01/09 43239 ESOPHAGUS, STOMACH, AN 175 LL760 814 36 31536 LARYNGOSCOPY, DIRECT, OPERATIVE, WITH BIOPSY; 8482 BURCH, S TFROST 07/01/09 31536 WITH OPERATING MICR 270 BCBS27630 1,352 60 30140 SUBMUCOUS RESECTION INFERIOR TURBINATE, 8475 REESE, S TFROST 07/01/09 30140 PARTIAL OR COMPLETE, ANY 320 TRC 862 50 30140 SUBMUCOUS RESECTION INFERIOR TURBINATE, 8477 KNOX, D TFROST 07/01/09 30140 PARTIAL OR COMPLETE, ANY 355 TRC 1,440 52 42820 TONSILLECTOMY AND ADENOIDECTOMY; YOUNGER 8467 RUIZ, R TFROST 07/01/09 42820 THAN AGE 12) 330 LS 480 68 8468 TORRES, F TFROST 07/01/09 42820 42820 TONSILLECTOMY AND ADENOIDECTOMY; YOUNGER THAN AGE 12) 240 MCD 516 68 Procedure Supplies
Questions
Thank You Amy Gagliardi, Corporate Purchasing Director Phone: 708-492-0531 E-mail: agaglidardi@regentsurgicalhealth.com