Playing the “Stock Market”

Savvy inventory practices can keep your ASC well stocked without tying up cash.

By Samantha Stahl, Assistant Editor

With the increasing amount of pressure to keep tabs on every dime that goes in or out of an ambulatory surgery center, successful inventory management is rising in the ranks of priority. How does an ASC go about maintaining a useful inventory of IOLs and surgical equipment without breaking the bank and overstocking underused materials? Without careful watch, materials can go missing or unordered.

The ordering process can eat up precious time and money, so streamlining inventory management is a worthy cause. In this feature, we'll discuss ways various ASCs approach the task and plans from industry that can help ease the hassle.

Smart Stocking

“Inventory management is key in an ASC because not only do products outdate, inventory is money sitting on shelves that might be better used elsewhere to grow your center,” says Victor Holmes, MD, of LaQuinta, Calif. Dr. Holmes insists that it is necessary to have a designated person responsible for the task, whether it is a scrub tech at a smaller surgery center or a dedicated inventory manager at a larger center.

“Getting our surgeons on board with using a predictable set of supplies for a given case is fundamental to good inventory management,” he says. His centers maintain two weeks worth of supplies, and materials are reordered within 24 hours of use. While most cataract supplies are kept on hand, they do not stock any toric IOLs. Instead, doctors must supply IOL power data at least one week in advance to avoid costly overnight shipping. Graft material, like corneas and amniotic membranes, are also ordered as needed.

While smart stocking policies that minimize the amount of supplies kept on-hand at the practice are a good way to save money, Dr. Holmes emphasizes “the importance of not being penny wise and pound foolish. If you miss a case that reimburses $15,000 because you didn't have a $200 supply on hand, your materials manager has failed,” he says. “You are better off overstocking until you understand your supply chain well.”

To avoid that type of problem, Sarah Cwiak, MBA, a practice administrator in Jeffersonville, Ind., says they are always stocked three weeks out based on the prior year's demand. “Our surgical flow follows our clinical flow by about two weeks, so we order supplies based on last year's volume and then use the practice as an ‘over-under.’” For example, if they have a week in the clinic with significantly higher volume in CAT evaluations in comparison to that calendar week a year prior, then they alert the ASC to monitor surgical schedules closely for a possible upsurge.

The center's annual volume also dictates how custom packs are ordered, which they have drop-shipped monthly to reduce the cost per pack. Lenses are ordered on consignment, with at least two of each power kept in stock and four to six of the most common powers. Ms. Cwiak says the only downside to this is with their Alcon toric lenses, which have three different astigmatic corrections for each power, causing them to “take up a decent amount of space in your facility!”

“The doctors and techs know if they select a lens we do not consign, then the surgical date will have to be at least two weeks out,” she says. Ordering sheets are kept in each operating room, Ms. Cwiak explains, so as a lens is implanted or opened, a staff member places one of the lens stickers onto the sheet for reordering. Consignments are checked monthly to ensure that nothing has expired.

Industry Assistance

Many companies recognize the need for flexibility and provide options to accommodate. Abbott Medical Optics, for example, offers custom packs for surgical supplies and adaptable financial programs based off of a center's volume of surgery and how frequently they'd like to be billed. “We work with every customer to make it as easy as possible for the person doing the ordering, both for budget control and administrative control,” says Becky Kirkwood, AMO's director of marketing, Americas.

She explains that all of the company's lenses are available by consignment and are handled by “bill and replace,” meaning the ASC keeps a full stock of lenses, but are only billed for what they use. “They do have to have a whole closet full of diopters, but we're taking the financial burden away,” she says. The company reconciles stock quarterly or however frequently the ASC needs.

Amoeasy.com, the company's online ordering system, also helps simplify the process. Available to all AMO customers, the ASC is supplied with a barcode scanner for taking inventory and automating their re-order. “It makes the administration and management of inventory a lot easier. With one click, they can re-order,” Ms. Kirkwood says.

“The most important thing is the relationship with your vendor. Be flexible and they will,” says Kevin Waltz, MD, partner at Surgical Care Center in Indiana. “Be willing to negotiate. Be willing to compromise.” He credits balancing a useful back stock without overspending to close observation and supervision of inventory.

An alternative solution is to place the inventory responsibility in external hands. Outsourcing companies like Sightpath Medical provide surgical equipment and supplies for ASCs based on a cost-per-procedure model. “The burden of inventory management is reduced because our technicians transport all necessary supplies and IOLs to the ASC on surgery day and remove the unused items when they leave,” says Dan Robins, Sightpath's vice president of access operations. By giving ASC staff time to tend to tasks other than inventory maintenance, the center can benefit from labor cost savings, he explains.

RFID Reminders

“Always keep a watch out for expiration dates. Missing one is the surest way to have to throw something away without using it,” says Paul Koch, MD, of Warwick, RI. Though they essentially keep no toric IOLs in stock, Dr. Koch says that his center orders lenses on consignment and uses the WaveMark radio frequency identification device (RFID) scanning system for IOL inventory.

A crucial benefit to using an RFID system, says Farrell Tyson, MD, FACS, of Cape Coral, Fla., is the elimination of one more possible human error during inventory control. He uses Hoya's Smart Automated Inventory Management (SAMI) system, a supply chain management program designed to simplify the ordering process.

Before implementing SAMI, Dr. Tyson's center would fax copies of the stickers from the used IOL box to the company to re-order after surgery. Simple, yes, but not without downsides. “The problem was that you didn't always know what you had in stock. Inventory was only checked every three or four months by a rep, and if they said something was missing, you were responsible for it.”

The SAMI system allows you to put RFID tags on any product—phaco packs, disposable instruments, etc.—making it easy to keep tabs on everything kept in inventory. Its most useful implementation, however, is with premium IOLs, says Dr. Tyson.

“SAMI lets you have real-time inventory of your lens stock. With increased values of premium IOLs, it's very important to keep track—it can be a big form of revenue loss. Just losing a few premium IOLs could be a few thousand dollars lost for your practice.” With around seven different types of IOLs kept in stock at all times, Dr. Tyson says there is opportunity for something to go missing. He also keeps all toric lenses in stock, following recommended algorithms for how many to order in each power range.

The most important tool for inventory maintenance, according to Dr. Koch, doesn't cost a thing: “Common sense, really. We try to keep enough on the shelves that we do not run out, but not so much that we won't get around to using it.” OM