Amazon & other ASC supply chain disruptors: 3 Qs with Shields Health Care’s Prashanth Bala
Written by Rachel Popa
June 27, 2019
Price transparency is a hot topic on the provider side, but it should also be touched on for supply chain, according to Prashanth Bala, director of ambulatory surgical centers for Shields Health Care Group.
Mr. Bala weighed in on the key trends in ASC supply chain management for Becker’s ASC Review.
Note: Responses have been lightly edited for style and content.
Question: Are you seeing any disruptive forces affect ASC supply chain management?
Prashanth Bala: With ASCs being relatively new across most of New England, we are finding that our vendors have had to alter their traditional processes that catered toward hospitals. We have prioritized partnerships that focus on providing exceptional quality and service and asked our surgeons to standardize their supply needs so that we may offer higher volumes of orders to our vendor partners. This allows us to ensure that we have what we need, when we need it, in order to deliver excellent patient care at affordable costs.
With that said, national shortages in certain drugs and fluids have created unique challenges. In order to ensure that we are meeting the needs of our patients, we must revert to purchasing large quantities of some supplies that we know have the potential to be unavailable at any given point. If these product shortages were not an issue, we could cut costs even further than we already do.
Q: What tools can ASCs use to improve supply chain operations?
PB: It all starts with strong partners for supplies, who keep us apprised of where our supplies are coming from and when we can expect them to arrive.
Technology then plays a crucial role in managing the daily schedule and inventory, particularly our electronic medical record, which helps us to determine our current needs. We mark from our inventory when a preference card is pulled. We then replenish as inventory nears our set par levels. We are in the process of implementing inventory management software that can help us electronically track what is pulled and used (based on preference cards) and what needs to be reordered.
We are always looking to improve processes. Our next goal is to get to a point where technology can inform the inventory manager that the needed items are in the cart and ready to be approved for reorder. We hope to get to this level of automation to ensure efficiency and relieve our staff of having to spend hours in front of shelves and spreadsheets. In the meantime, there are now a number of software programs that can assist with this initiative, including both costly and free programs that utilize a manual bar code scanning process.
Q: Do you think Amazon might affect ASC supply chain? If so, in what way?
PB: Our priority is always on quality and patient safety, and we are confident in our vendors’ abilities today. That being said, we would love to see a marketplace in which to find all our supplies/implant needs and compare pricing. Price transparency is something that is often talked about for ASCs in relation to patient care, but not so much on the supplier side.
For ASCs, two areas that I see savings opportunity for which Amazon is known are in freight and shipping, and utilization of generic products.
Our medical/surgical distributor, Cardinal Health, has been an excellent partner that has helped us reduce our shipping costs through their freight program to the tune of $15K to 20K per year. Most of these savings have been seen in supply purchasing for “add on” cases, where shipping costs for grafts would otherwise be prohibitive. Through this program, we’re a little less concerned about that facet of supply chain logistics, which offers us the ability to ensure patients can been seen most expeditiously.
We are very judicious in the way that we identify “generic” products and take painstaking measures to ensure that the products are true matches to the “name brand” products. That said, being able to more easily compare and contrast pricing and products would lead to cost savings for ASCs.
While Amazon may be a model to consider in the future, until they can provide us a level of service we receive now from our partners, I don’t see enough value to make a change.