6 Tips for Making Smarter Equipment Purchasing Decisions

The difference between what ASCs spend to perform procedures and what they are paid is often quite small. That's why success in a surgery center is often dependent upon an ability to not only maximize case volume and throughput but to do so as cost effectively as possible. Poor equipment purchasing decisions can quickly shrink margins and turn profitable cases into those that break even or even lose money. If an ASC makes a substantial purchasing mistake or enough poor purchasing choices over time, it could doom the business.

"There's often little room for error concerning equipment purchases in a surgery center," says Stephanie Martin, MHA, CASC, vice president of operations for Regent Surgical Health. "If you make a significant purchase that's not financially, clinically and operationally justified, regret will set in fast. Resolving these mistakes is often difficult. Even when doable, it usually means a loss of money, wasted time and possible harm to surgeon satisfaction."

Martin provides the following six tips to help ASCs better ensure they make appropriate purchasing decisions.

1. Understand the laws of unintended consequences. One of your busiest surgeon-owners asks for the latest and greatest piece of equipment. As an owner and heavy hitter for the ASC, you may feel pressured to approve the request without hesitation to help keep that surgeon happy. But understand that if you do so, Martin says, that may be the first of many requests you receive.

   "When you say 'yes' to one surgeon in your facility, you often start a snowball reaction with other surgeons in the facility," she says. "Since one surgeon got a new toy, another wants one as well. Before long, you can get bombarded with requests. Surgeons asking for equipment isn't necessarily bad as some requests may be worth pursuing, but you want to ensure decisions aren't made impulsively. Rather, you need to have a basis for why requests are approved or disapproved."

2. Develop a standard process for requests. To improve your equipment purchasing process while avoiding any appearance of favoritism, implement an objective, uniform process.

   "This process should spell out exactly how all surgeons should submit purchasing requests and what factors will be taken into consideration when weighing a decision," Martin says. "Such factors will likely include the upfront cost of the equipment, any ongoing expenses, clinical benefits, impact on turnaround time and whether the equipment will enable the ASC to add more and/or new cases. Follow your process to completion every time if you want objectivity in your decisions."

3. Trial equipment. While not always an option, take advantage of opportunities for your surgeons to trial equipment before making a purchasing decision.

   "A trial can serve as a great way to bring a piece of equipment into your ASC without spending a lot of money and making a big commitment while you and the interested surgeon get a better understanding of the equipment and its potential benefits," Martin says. "A surgeon may believe a piece of equipment will allow them to complete cases faster, but a trial might reveal that cases are more likely to take the same amount of time or longer. A surgeon might also find that the new equipment isn't as comfortable to use as their existing technology. The more you can learn about a piece of equipment before committing to a significant purchase, the better."

4. Learn the true costs of equipment. The cost of equipment is easy to understand when all you need to pay is the purchase price. But some pieces of equipment bring additional expenses, such as those associated with standard maintenance, more significant repairs, associated instruments and any special cleaning tools.

   "There's a lot of buzz these days concerning robotics in ASCs," Martin says. "A robot is a perfect example of a piece of equipment that's very expensive up front and has fairly substantial ongoing costs."

   Such high costs should not necessarily be a deal breaker, Martin says. Before pulling the trigger on a purchase like a robot, ASCs should carefully evaluate the pros and cons as dictated by their purchasing review process.

   "If your ASC is already performing total joint replacement procedures and considering a robot for these cases, will the robot allow you to bring more of such procedures or are you just cannibalizing cases you are already doing and driving up the costs?" Martin says. "I have heard physicians say they can bring more cases to ASCs and deliver better outcomes if they had use of robots. We are also increasingly hearing that patients want to undergo procedures performed by surgeons who use cutting-edge technology, such as robots. While costs are an important consideration — and you want to make sure you determine all of them before make a decision — understand all the factors that should be weighed."

5. Compare and contrast to educate. The decision of whether to approve a significant purchase will often fall to governing board members. You can help them make an informed decision — as well as help physicians requesting items better understand the rationale behind a decision — by comparing like surgeries that use and do not use the equipment.

   "Being able to compare what a piece of equipment does to case costing, procedure time and other important factors for the same CPT code can help paint a clearer picture concerning whether or not a purchase is justified," Martin says.

   One example of such a situation Martin recalls concerned the use of a coblator wand to remove tonsils. "Proponents were saying the wand made these cases quicker and patients bled less postoperatively, overall making it a better experience. But the cost to use the wand added a fair amount of money to cases where ASCs were not making much to begin with, especially since many of the patients were covered by Medicaid. This was a time when doing an in-depth analysis of time and costs along with clinical and patient satisfaction benefits was critical to making the best decision."

6. Find the evidence. It's one thing to believe a piece of equipment will deliver a clinical, operational or financial improvement. It's another thing to know it.

"We always want to be basing our decisions on evidence-based practices," Martin says. "For pieces of equipment, do they really deliver what sales representatives so proudly say they do?"

Unfortunately, sometimes such evidence is not available for equipment or available to the extent that you may desire. If you can trial or lease a piece of equipment, consider performing a quality assurance and performance improvement (QAPI) study on it.

"ASCs are required to conduct studies that show we are working to improve care," Martin says. "Assessing whether a piece of equipment will help do so fits that bill. With a QAPI study, you're moving past what something costs and working toward assessing the quality value of the equipment. What you learn may be significant in guiding a final decision."

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