Carefully Track Supplies to Control Costs Under APCs

As soon as ambulatory payment classifications (APCs) take effect, central supply will instantly become a cost center rather than a revenue center. When you consider that supplies and equipment make up a considerable portion of a hospitals budget, perhaps as much as 25 percent at some facilities, the dollar amounts involved can be quite large. This isnt cause for panic, but some caution and a little planning are in order.

Right now, were charging pretty much item by item, said Dottie Bringle, RN, BSN, MSHSA, director of surgery and intensive care unit services at St. Johns Regional Medical Center in Joplin, Mo. Under APCs, were going to get one payment like diagnosis-related groups (DRGs), so it behooves us to be careful and keep track of everythingnot that we shouldnt have been doing that already.

Some hospitals keep track of their supply use better than others, Bringle notes, and those that effectively control their costs should fare better overall. Supply issues have a crescendo effect. Its going to become very important to cut supply costs, so it will be important to get a handle on that, then it will taper down.

Rhonda Smith, clinical director at Doctors Hospital in Groves, Texas, has been working on the APC problem for a year and a half: gathering information from other hospitals, talking to hospital directors and attending seminars. She believes that careful documentation will be key to surviving APCs, but she notes that there are plenty of strategies for dealing with the new outpatient prospective payment system (OPPS).

Get Everyone Involved

Smith recently switched to a new inventory-control method. Weve started using a charted method that pieces [supplies]. Knowing what is used and when its used will help facilities calculate the cost of different services and assess the financial impact of APCs on the facility.

Before adopting a supply-tracking system, Smith talked to nurses and learned that they preferred a checklist. She assembled the necessary information from a series of publications, including the CPT codebook for definitions, the Certification for Emergency Nursing manual, guidelines from the Joint Commission on Accreditation of Healthcare Organizations and American Osteopathic Association, and several others.

Now, a combination of nurses notes and a triage sheet make up a quick supplies-use checklist. It goes immediately on the chart, and the person who picks up the chart will use the rest of the sheet, Smith explains. Working with the clinical staff ensured acceptance of the new system before it was implemented.

Although nurses are crucial to any supply program because of their role in documentation, hospitals shouldnt neglect doctors in this endeavor. Physicians are affected, Bringle notes. If the hospital cant survive with cost containment, they wont be able to get new equipment. And surgeons like to [...]

- Published on 2000-08-01