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Make Game-changing Decisions Using Business Analytics

Posted on in Service Solutions

By Clint Geffert, President, VGM & Associates

I happened to be flipping through the television channels recently when I came across the movie Moneyball. Being a baseball fan, I was drawn to it immediately. Before long I was relating to Billy Beane and the challenges and thoughts he was applying to the Oakland A’s and applying it to the HME industry. It made me wonder: Is our industry using business analytics or statistical data frequently enough to evaluate business operations?

Those of you not familiar with the plot of Moneyball, in the early 2000s the Oakland Athletics General Manager Billy Beane was hampered with the lowest salary constraints in professional baseball. If he ever wanted to win a World Series and compete with teams in the big markets, Billy had to find a competitive advantage. Billy turned baseball on its ear when he used statistical data to analyze and place value on the players he picked for his team. His adoption of statistical analytic led the Oakland A’s to the playoffs and an American League record 20-game winning streak in 2002. 

Every HME that wants to maximize efficiencies and gain a competitive advantage should exploit the potential of business analytics. I am a firm believer in leaning on instincts and experience to make business decisions. However, accompanying these skills with business analytics can differentiate you from your competition.

You Must Commit to Change

In order to apply business analytics or metrics, one must approach it with a firm commitment and an open mind. The activity can be as detailed as going through all of your business processes and clearly identifying and defining needs or applying it to specific areas of the operation to validate if it still complies with your overall strategy. Once this is done, then you must enable the change to achieve solutions which deliver value to your stakeholders – patients, drivers, care givers, management, etc. 

Evaluate Your Business to Identify Opportunities

There are several benefits of reviewing your business in depth from time to time. One, it can provide ideas or thoughts on improving the overall structure or efficiencies of the business. Areas identified as opportunities may include applying automation, outsourcing, adding or eliminating positions, which may or may not be necessary. Our industry has seen drastic change in reimbursement over the last few years, and a business must change to match market conditions. Conducting a comprehensive business analysis bi-annually or annually can often provide clarity on difficult decisions, which need to be made in order to optimize revenue; it may mean walking from contracts or product categories, which you have served for a long period of time.

The HME industry is currently facing challenges, and like the Oakland A’s of the early 2000s, it is steep with tradition, is increasingly competitive and is faced with declining reimbursement. However, it shows a promising future for those businesses that are willing to change their models and accommodate the modern health care consumer.

For more information on how business analytics can improve your bottom line, download VGM’s Analyzing Business Operations playbook at playbook.vgm.com

 

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