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To Trash or Not to Trash


									                                                                           1 | Make every attempt to have your surgeons
                                 SURPLUS                                       use it…PERIOD.
                                INVENTORY:                                 2 | Contact your distributor or manufacturer to return it
                                                                           Over the past 14 years of specializing in disposable surgical
                                                                           supplies, we have found that there are a lot of stipulations with

                    To Trash,                                              your vendors, i.e. not taking back open boxes, not authorizing a
                                                                           return of product that has been in your facility for more than
                                                                           30-90 days, etc. When this is the case, the facility is back to

                    or Not to                                              square one and has no other choice but to explore alternative

                                                                           2 | Share these items within your health system
                     Trash?                                                Realize, however, if you are dealing with a product conversion or
                                                                           system contract change, it is likely that your sister facilities are
                                                                           changing product lines as well. Though sharing your surplus
                                                                           surgical inventory lists with your sister facilities is nice in
                                                                           theory; how often do you have time to deal with another
                                                                           facility’s surplus issues? Especially when you have your own.

                                                                           4 | Sell your surplus to a third party
                                                                           Some facilities lean on the experience of third parties or
       David Johnson, Surgical Acquisitions Manager, West Coast            “resellers” when faced with surplus surgical supplies. These
       Medical Resources, Inc. (WestCMR), Seminole, Florida                companies have programs in place that allow you to recoup a
                                                                           respectable portion of your initial investment in these supplies.
          n any industry, surplus inventory is a touchy subject and is     “Disposable, single-use surgical supplies” are considered to be

      I   often an overlooked part of the "supply chain."
          Management’s plate is full and, unfortunately, they may turn
       a blind eye to this topic and put the issue of surplus on the
                                                                           “soft assets” and therefore depreciate in value. Most supplies
                                                                           arrive at your facility with five years of shelf-life before expiring.
                                                                           An average return on selling these supplies back into the
                                                                           medical marketplace through resellers can range from 10 - 30
       back burner. In hospitals and ambulatory surgery centers,
       surplus has become a bigger issue than most want to admit.          cents on the dollar. These supplies are resold to facilities
                                                                           across the country and are often exported and donated.
       All healthcare facilities find themselves with surplus. There are
       four consistent explanations, from hospitals and ASCs, for          5 | Let it expire
       being left with unusable product:                                   Believe it or not, this happens way too often. Why? Could it be
                                                                           because this was not outlined in your Materials Coordinator or
         æ A specific surgeon leaves and the remaining surgeons            Materials Manager’s job description? Perhaps. This usually
           prefer other products                                           happens as a result of being overwhelmed and, in some cases,
                                                                           understaffed to handle surplus surgical inventory when it
         æ Sales representatives oversell and then refuse to take
                                                                           surfaces. This can also happen as a result of you not being
           product back
                                                                           dialed into the actual demand of the products you no longer
         æ Previous materials managers’ mistakes/poor stock                have a need for, while experienced resellers possess the data
           rotation                                                        and stats of current market trends.

         æ Manufacturers consistently develop new technology               In today’s trying economy, it is vital to continuously discover
                                                                           ways to improve Med/Surg spending, minimize losses, create
       Perhaps you have other explanations for surplus issues in your      mutually beneficial strategic partnerships, and always strive to
       facility. What’s not important is “who is to blame,” what is        strengthen each link in the supply chain. Whichever solution
       imperative… is finding a solution. What is the solution?            you choose for dealing with your surplus surgical inventory, it is
       Hospitals and Surgery Centers have five options when faced          important to find a way to minimize the effect that unused
       with surplus surgical inventory:                                    inventory has on the actual cost of performing surgery.æ

22   V.5 | N.4 | Supply Chain Strategies & Solutions
VBP and Its Potential Impact on Supply Chain Professionals
 James Smoker, CMRP, MPA, CS, York, Pennsylvania

         he concept of Value Based Purchasing (VBP) has caused

 T       confusion among some healthcare supply chain
         professionals. The purpose of this article is to help to
 clarify VBP and to cite its potential future impact on supply
 chain professionals.

 Congress called for the creation of VBP with the passage of the
 2005 Deficit Reduction Act. The goal of the VBP initiative is to
 financially reward higher performing hospitals and penalize
 underperforming hospitals. VBP is a further evolution of the
 Federal Government’s Medicare “pay for performance” initiative
 and was to be fully implemented in Federal Fiscal Year
 2009-2010. In many ways, the VBP program is similar to the
 required hospital quality indicators reporting initiative that has             organizations to submit their required data. Each data set is
 been in place for many years.                                                  scored at CMS. If all acute care organizations scored 100%, all
                                                                                would receive their full Medicare payments. If, for example, only
 There are 21 measures against six acute care conditions and
                                                                                50% of acute care organizations scored 100% and the
 metrics. Those conditions include myocardial infarction, heart
                                                                                remaining 50% scored 0%, those scoring 0% would receive a
 failure, surgical infection prevention, and pneumonia. In addition
                                                                                lower than “standard reimbursement rate” and the balance (or
 to the medical conditions, patient satisfaction and risk-adjusted
                                                                                a portion of the balance) would be divided among those
 mortality have been included. In essence, the Centers for
 Medicare and Medicaid (CMS) require all acute healthcare
                                                                                                                                    Continued on Page 24 u

         West Coast Medical Resources, Inc.                                                                                What am I going to do
                       Proudly serving the surgical community since 1997                                                   with all this STUFF !

   Managing your unwanted disposable surgical inventory wasn’t part of your job description...
          So put our fourteen years of experience to work and let us do what we do best.

   Every year your facility experiences product conversions from new contracts, surgeon preference
   changes, and many other factors. OEMs and distributors simply don’t take most inventory
   back. So how do you maximize your return and minimize wasting your time dealing with it?

                    CALL THE
               SURPLUS SPECIALISTS:                                                                        HERNIA

                   WestCMR!!!                                                                          SHAVE
                                                                                                       BLADER    ORTHO             ENDO
                     Randy Ware, President / Founder                                                         S
                        Toll Free: 800-565-6385
                         Phone: 727-392-2800                                                                                    TRAUMA
                          Fax: 407-386-9555                                                                                                GYN

                                                                                                                     Supply Chain Strategies & Solutions | V.5 | N.4 23

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