With rising costs and declining reimbursements, what’s an O&P practice to do to maintain its competitive edge? In last month’s EDGE Direct, we discussed how some practices do this by bringing fabrication services in-house (“The Value of In-House Fabrication“). This month, we’re exploring why some O&P professionals have found it more economical to use a central fabrication facility.
Talk to most O&P professionals who work in, or own, a central fabrication facility and they agree there are two reasons why an O&P facility might find this to be the right solution for their fabrication needs: cost and specialization.
“C-Fabs have a different value for different customers,” says Craig Mackenzie, CP, RTP(c), president of Evolution Industries, Orlando, Florida. “In some cases we handle only overflow. When a customer’s in-house fabrication is too busy to handle all their work, they send it to us.” Evolution Industries operates out of a 20,000-square-foot facility with 20 employees and mainly serves lower-limb prosthetics clients. “Some C-Fabs specialize in specific products, things that an in-house facility or other C-Fabs don’t do often enough to become proficient,” he adds.
O&P companies also use central fabrication facilities for fabrication support; for example, to help defray costs for items such as a carver or a computer numerical control (CNC) milling machine.
MacKenzie, who began his career in 1998 as a prosthetic technician at Sunnybrook Hospital, Toronto, Canada, says it is a “common misconception” that central fabrication facilities are better than in-house facilities.
“We pull from the same pool of talented technicians that in-house facilities do,” he says. “C-Fabs just see a wider range of requests from customers because they are receiving jobs from multiple facilities.”
But it is cost that drives many O&P firms to use central fabrication facilities as opposed to in-house to build and deliver products. It is a service that comes at a “premium,” according to Brad Mattear, MA, CFO, general manager of O&P1, Waterloo, Iowa. The company has clients from Maine to Alaska to Florida.
“Currently, services of fabrication are provided at a premium due to the lack of technical knowledge in our field,” says Mattear, who has worked at O&P1 for nearly eight years and manages eight certified technicians housed in a 4,500-square-foot facility.
The quantities that a central fabrication facility is able to produce can make it even more attractive, according to Tony Wickman, CTPO, chief executive officer of Freedom Fabrication, Havana, Florida, housed in a 6,000-square-foot facility, which has been in business for 18 years.
“The primary value of a central fabrication facility is the amount we can produce,” he says. “Because of the volume, we can do things that are cost-prohibitive for most in-house facilities. We get the stuff in and out quicker and more efficiently without additional expense.”
Mattear says some central fabrication facilities want to promote that they are specialists on certain items, but O&P1 does not.
“We try and serve evenly across the board to the mass of practitioners,” says Mattear, who got his start in O&P after sharing a cab ride with Dennis Clark, CPO, president of O&P1.
Central fabrication facilities can help to save an O&P practice money from a personnel standpoint as well. Companies using a central fab only have to pay for the staff that they use without carrying the overhead of a full-time staff member when their fabrication needs are not as great.
“Cost containment is a big issue,” says Wickman, who employs seven full-time technicians. “You have to hire a staff. You can keep your staff busy, but if it’s slow, you still have to pay your staff. If it’s slow here, you don’t have to pay for our services.”