ASCs at a crossroads – why supply chain management is key

What’s inside:

This article looks at the impact technology can have on Ambulatory Surgery Center (ASC) supply chain management, and the role this has in preparing ASC providers for growth.

There is increasing pressure on ASC providers to review their supply chain management (SCM) because:

  • Many have inefficient manual processes or old automated systems
  • Inventory wastage is high and costly
  • The inventory at hand is bloated and expensive
  • Inefficient data capture is a barrier to better planning and management

Despite all the market opportunities, many ASCs are at a crossroads – planning for growth,

while at the same time being held back by operational inefficiencies.

 

Good news for ASC providers

The media is full of good news stories about ambulatory surgery centers (ASCs). We hear that:

  • The ASC market is set to rise from $2.54 billion in 2021 to over USD 7.53 Billion by 2028 – a growth rate of 27.6%.*1
  • An aging population and rise in chronic disorders are fueling the growth of minimally invasive surgeries, which can now be performed in the ambulatory care setting. These outpatient surgeries are often specialists in growth areas such as ophthalmology, orthopedics, gastroenterology, pain management, cardiovascular, plastic surgery and more.
  • 15-20% of all outpatient surgeries in the US are provided by ASCs*2
  • It seems that size matters, as there are a growing number of collaborations, joint ventures and acquisitions in the ASC sector – which can be an exciting opportunity for many ASCs.

 

With so many opportunities available, ASCs need to ensure they have strong foundations in place that will prepare them for growth.

How gaining better control of the medical supply chain can support growth

Cost Reduction: One of the top issues for ASC leadership is cost reduction and central to this is gaining control of their supply chain management. Medical supplies are typically the second largest line on the budget, after staffing costs. Supply chain disruptions in recent years, and rising inflation, have certainly been a challenge, but the organizational threat is not just external – operational inefficiencies, high wastage and excessive costs all need to be urgently addressed.

As ASCs prepare for expansion, expensive supply chain inefficiencies can no longer be tolerated. With many ambulatory care providers poised for growth, these costs will only become a heavier financial burden, if they are left unchecked.

Cost of staffing: Alongside the need to add supply chain efficiencies, is the pressure to handle chronic staff shortages, which will likely involve searching for additional funds to respond to the rising cost of recruitment and the need for more enticing employment packages.

Implementing new ASC inventory management technology and workflow efficiencies not only makes cost savings that can be diverted towards staffing costs, but it may actually help healthcare organizations to operate more effectively using fewer staff.

 

Supply chain automation tools for ASC inventory management
Supply chain automation tools for ASC inventory management

The starting point for improving inventory management in many ASCs

The ASC healthcare supply chain is an area that’s ripe for review. Outdated manual systems and inefficient automation tools have proven to be costly and inefficient for some ambulatory care providers, leading to complicated workflows, bloated inventories and high levels of wastage. Moreover, the lack of efficient data capture and business analytics has hindered effective planning and management. Let’s take a look at three issues which are contributing to inefficient ASC supply chain management.

Clear vision: The ambulatory care sector is competing against health systems and large hospitals for finite supply volumes. When procuring essential medical supplies, the starting point is a clear understanding of their current and projected inventory needs. Without this there is a high risk of inefficient procurement which leads to even bigger issues such as delayed surgeries and compromised patient care.

 

ASCs to need to have SCM strategies that enable agile practices that can manage

continuing supply chain disruptions.

 

Outdated systems and processes: In order to keep on top of supply and demand, ambulatory care provides need systems that deliver real-time vision, end-to-end tracking and timely data. But many are far from this point, instead they may be using outdated manual systems and or inefficient automated processes that fail to provide real-time visibility into inventory levels, leading to overstocking or stockouts. Manual processes also contribute to data inaccuracies, delays in procurement, and difficulties in tracking and billing. Many ASCs grapple with expensive bloated inventories and high costs associated with excess stock and poor expiration management.

The cause and effect of poor SCM: Inefficient tools and limited data are leading to data gaps that hinder planning and decision making, resulting in many ASC providers being caught up in a vicious circle. It’s time to break free.

It’s clear that having the right, automated supply chain management tools in place is the starting point of effective SCM.

The role of data in supply chain management

SCM is the foundation of ASC operations management, and has a direct impact on the provision of timely and cost-effective patient care.

ASC leadership recognizes that data is key, and looking into the data outputs when upgrading their inventory management systems is paramount. The right technology for ASC inventory management can deliver many benefits, such as:

  • Provide real-time inventory visibility
  • Deliver full usage data to support accurate procurement
  • Give useful management information by item, patient or surgeon.
  • Ensure full case costs are tracked and billed
  • Achieve a streamlined inventory, lower wastage and lower costs
  • Give management the full data they need to make better decisions
  • Achieve full regulatory compliance 

 

The AI-driven supply chain has arrived.

Advanced inventory management automation delivers

operational, clinical and financial benefits. 

 

Supply chain data: Technology can play a pivotal role in transforming the ASC supply chain. By adopting advanced SCM solutions, ASCs can achieve accurate and automated data capture and base supply chain decisions on meaningful business information.

The best inventory management systems combine advanced data sensing tools that collect full and accurate data, with AI management systems that analyze and share this valuable information. The best managing systems are equipped with predictive analytics capabilities that help ASCs to forecast demand, identify trends, and make data-driven procurement decisions.

These digital inventory management systems can automatically generate purchase orders, track shipments, and manage stock levels based on consumption patterns and lead times. With a proactive approach to SCM, ASCs can reduce wastage, avoid stockouts, and improve overall operational efficiency.

Collaboration and integration with suppliers

The most successful supply chain management involves strong collaboration and integration with key supply chain stakeholders.

Forward thinking ASCs are establishing strategic partnerships with reliable suppliers and distributors who can meet their specific requirements in terms of quality, timeliness, and cost-effectiveness. By fostering close relationships with suppliers, ASCs can benefit from streamlined order processing, prompt delivery, and improved service levels.

IDENTI Platform - AI Management Software for inventory management reports, metrics and analytics
IDENTI Platform – AI Management Software for inventory management reports, metrics and analytics

 

To make this closer partnership work seamlessly, they are utilizing shared access to the supply chain system so that all parties see real-time inventory data for greater trust, transparency and traceability.

When this is achieved it opens the door to discussions such as vendor-managed inventory (VMI), where suppliers retain full responsibility for consigned stock within an ASC. This is achieved via the use of advanced SCM automation that enables them to virtually monitor inventory levels, track consumption, manage expiry and replenish stock. With these arrangements in place the ASC provider would not bear the cost of expiry waste and all expenditure would be on a ‘pay per use’ basis, giving a big boost to their cashflow.

When they have the right technology in place, many providers are turning towards consignment arrangements for their high value items, which can result in significant cost savings.

 

Three effective ways for ASCs to stay competitive

Ambulatory care providers can improve their competitive edge and meet the demands of a rapidly evolving healthcare landscape by:

 

Driver for SCM success How it works
Embracing innovative technologies

 

Technology really is a gamechanger when it comes to getting full vision of inventory and achieving end-to-end tracking of implants and medical inventory.
Making data-driven decisions

 

Data drives decision-making. When management see the full picture and receive future projections, they can make informed decisions that respond to actual need rather than work on a ‘best guess’ basis.
Creating collaborative supply chain partnerships

 

Working in partnership leads to smoother supply chain activity, better relationships and improved contractual arrangements. Using technology to deliver shared vision across all stakeholders is a key element of establishing trust and transparency.

 

The role of data analytics and business intelligence

Management information: Data-driven decision-making lies at the core of effective SCM. ASCs must leverage data analytics and business intelligence tools to extract actionable insights from the vast amount of data generated within their supply chains. By analyzing historical consumption patterns, ASCs can identify usage trends, seasonal variations, and supply-demand fluctuations, aiding in accurate demand forecasting and inventory planning. AI technology is far better placed to spot trends than humans and this technology is improving healthcare providers’ ability to anticipate future demands and ensure that adequate stocks are in place.

The best ambulatory surgery center software delivers meaningful data analytics that can help ASCs identify cost-saving opportunities, for example the analysis of purchase history and usage data can help ASCs to:

  • Negotiate better pricing with suppliers
  • Trigger the sourcing of alternative vendors
  • Aim for greater standardization of Physician Preference Items (PPI)
  • Look to consolidate purchasing to achieve volume discounts

 

Case costing: Ambulaory care centers can also analyze case costs, including supplies, equipment, and labor, to optimize resource allocation and identify areas for cost reduction. Case costing is crucial to ASCs’ bottom line and gaining a clear understanding of how much a case should cost will help to discuss reducing variance among physicians and review PPI to ensure lowest costs while maintaining the highest standards of care. In these delicate discussions with physicians, it is critical to have solid data to back up recommendations.

Advanced inventory management systems for ambulatory surgery center (ASC) providers

An example of an ambulatory care inventory management system is the IDENTI Medical suite of data sensing solutions and managing software.

Choosing the right tools to manage your ASC supply chain is crucial. At IDENTI Medical all of our products are built on three pillars:

  • Data sensing tools: Covering different types of inventory:

 

Clinician-friendly tools make it simple and easy for nurses to locate and track medical inventory in the healthcare setting.

A single cloud management platform for ambulatory care makes integration with hospital systems a breeze for the management of ambulatory pharmacy supplies, medical devices, implants and bulk supplies.

  • Snap & Go image recognition technology for accurate, digital utilization documentation straight to the EMR
    Snap & Go image recognition technology for accurate, digital utilization documentation straight to the EMR

     

    Cloud software: However smart your software is, if it’s not easy to integrate with core healthcare systems, it will simply create data silos. The IDENTIPlatform is an AI cloud-based inventory management solution that is interoperable with core systems and seamlessly shares supply chain data with your:

 

 

AI-powered SCM technology provides analytics and forecast data that can help you better manage your people, processes, and products.

Transformative technology for competitive advantage

ASCs stand at a crossroads, with immense growth opportunities on the horizon. To capitalize on these opportunities and ensure sustainable success, ASCs must prioritize supply chain management as a key strategic focus. By leveraging technology, data analytics, collaboration, and innovative procurement models, ASCs can streamline their SCM processes, reduce costs, minimize wastage, and enhance patient care.

 

Embracing an agile and data-driven approach to SCM is essential for ASCs to strengthen their bottom line despite rising costs and shrinking margins. As the ASC market continues to expand, organizations that embrace digital ambulatory management solutions to prioritize and optimize their SCM practices will emerge as leaders, running a tight ship that delivers high-quality care while gaining competitive advantage.

 

If you are looking to transform your ASC supply chain, talk to us about your needs and we’ll discuss ready-made, easy-to-implement solutions.

 

 

 

*1 Ambulatory Surgical Center (ASC) Market to Reach Over USD (globenewswire.com)

*2 Revenue Cycle Management Company Savista Expands Services More Broadly to Ambulatory Surgery Centers (yahoo.com)

 

 

Sign up for our digital library

About the author

Shmulik is VP of Sales and Business Development. His background includes 30 years in senior positions, including COO and Executive VP at Sarel, Israel’s GPO for public healthcare. He has a history of successful leadership, strategic planning, operations management and organizational growth. Shmulik leads IDENTI’s sales and distribution teams, dealing with hospitals, medical organizations, distributors and vendors across the global.