Member Q&A: Maximizing Profitability for Your Business
on Tuesday, November 5, 2019
Below are a series of questions that focus on generating revenue within different areas of your business. Our experts hear these questions often in the marketplace or the questions have been submitted directly to us through member-exclusive tools. There are also topics from our latest VGM Playbook, “Maximizing Profitability for Your Business.”
Topic: CPAP Resupply
Q: Many providers are asking whether they should keep their CPAP resupply business inhouse or outsource it with the assistance of a vendor partner?
A: Let’s discuss the advantages and disadvantages of both.
In-sourcing advantages: more control, increased visibility, economies of scale
In-sourcing disadvantages: higher volumes, higher investment, dedicated equipment, supply chain problems
Outsourcing advantages: flexibility, lower investment, improved cash flow, lower labor cost
Outsourcing disadvantages: provider choice, loss of process control, longer lead time, information control
Here’s a tip if you’re considering outsourcing: provider’s don’t need to outsource 100% of their business. Providers should always remember to have a small amount of inventory in stock for new CPAP referrals. For instance, start small with just a portion of your inventory. Then lastly, when considering outsourcing and where to start, look at the variety of insurances your company works with. Maybe two to three payers are better with large volume business and you can have smaller payers solely focus on inhouse.
Source: VGM Playbook, Resupply Models to Improve Cash Flow by Ronda Buhrmester
Topic: Patients as Payers
Q: The patient payer model is changing. Patient healthcare costs are continuing to increase and nearly 50% of all patient financial responsibility is going uncollected. With this change, how can we start to view our customers as healthcare payers?
A: The truth is that the rate of healthcare providers to file bankruptcy has tripled in the last few years. The need to differentiate a payer mix is more prevalent than ever. To expand on traditional billing, start by expanding on your current resources. Train staff to engage with patients throughout the entire billing process by starting with how first-line customer service representatives are treating customers and then moving to a scalable plan that builds customer loyalty.
Source: VGM Playbook: Patient as Payer: Will You Be Ready? Six Tips to Help you Prepare by Jennifer Leon
Topic: Wound Care Profitability Discovery
Q: Specific to Wound Care, how can I discover profitability of certain product offerings within my business? In conjunction, how can I balance out any holes in my product portfolio?
A: VGM Wound Care has actually developed a downloadable calculator to help answer the question, “Can I be profitable in wound care?” This calculator allows you to assess your current state as well as explore expansion in wound care offerings. VGM members can download it at vgm.com/woundcare. Reach out to Heather Trumm at [email protected] for log in credentials.
Topic: Leverage Your Marketing Budget to Increase Profitability
Q: How can my DMEPOS business continue to resonate and reach customers as well as maximize the return for my marketing budget?
A: As it relates to understanding your marketing budget, Forbin expert Thea Nicholson says, “There’s a difference between spending money because you know you should and spending money wisely.” With that, she suggests to hone in on maximizing your return on investment (ROI), developing a marketing strategy based on your business goals, and then establishing a budget to complement your strategy.
Source: VGM Playbook: Leverage Your Marketing Budget to Increase Profitability by Thea Nicholson
The Wrap Up
All topics are expanded upon in recent the recent VGM Playbook: Maximizing Profitability for Your Business. This VGM member exclusive resource can be downloaded here, playbook.vgm.com.
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