Can Outsourced Solutions Be the Answer to the Challenges Facing DMEPOS Providers in 2023?
Orthotics & Prosthetics
on February 24, 2023
By Barry Thwaits, VP, Business Development, VGM & Associates
Like other business owners, you are likely busy making plans for the coming year, focusing on growing your business, and bringing in new customers. As you prepare for 2023, your plans will have to include consideration of ongoing challenges that have plagued our industry for the last two years.
Providers will have to find a way to sustain, or even grow and expand their business while working through supply chain issues, increasing costs of products, and providing higher salaries for clinicians. And, as you can see in the chart below, all while having limited-to-no increase in reimbursements.
How does a business owner facing these challenges build a strategy to grow their business or improve profit margins? Perhaps it’s time for your business to consider outsourcing.
The practice of outsourcing is a familiar strategy to many business owners. Companies today will outsource their payroll processing, accounting, billing, collections, and many other important functions, often because they have no other choice. Even large companies turn to outsourcing to cut costs, contracting with a partner who can provide a service or solution more efficiently than they could achieve in-house. As a result, our industry is seeing a plethora of companies, including VGM, promoting services to address the needs of DMEPOS organizations.
While there may be many new offerings, some business owners don’t thoroughly understand the benefits of outsourcing. It’s true that outsourcing can save money, but that’s not the only reason to consider outsourcing for your company. Reallocating resources and staff to important programs you want to launch can also be an important reason to consider outsourcing as an option.
Perhaps your business needs to achieve higher efficiencies in your core businesses. Again, outsourcing could provide you with a solution and pathway to achieving those required efficiencies. For many DMEs, billing and logistics solutions are already part of their business. That being the case, if we find that outsourcing billing and logistics solutions makes sense for part of our business, shouldn’t we look for other ways to grow revenue and improve margin and efficiencies through outsourcing as well?
Let’s examine some areas where you might want to consider outsourcing in 2023.
Increase Efficiency of Staff
DMEs often have a difficult time attempting to maintain contact with their patients for the purpose of compliance management and ongoing supply of accessories. The question often becomes how to address the need for onboarding of new patients who require clinical assistance with the need to be on the phone or computer and addressing compliance concerns with existing patients. Often, the provider will forgo long-term contact with the patient as they simply do not have the resources to support that level of interaction. Even more concerning is the loss of new referrals when they do not have the staff to support the onboarding of new patients.
Thankfully, there are solutions to these challenges facing providers today. There are multiple companies that offer virtual setup and compliance management. As a result of hearing many of our valued providers express their need for help with setup and compliance management of sleep patients, VGM is launching its own compliance management program.
The question you might be asking is how the VGM compliance management program differs from other programs available to providers today. To put it simply, the VGM program is designed to focus on patient engagement in a format the patient expects and requires. Here’s how it works:
VGM Sleep Management Program
- A patient portal app is available to each patient for ease of communication and management of education materials and coaching.
- Each patient is assigned a patient care coordinator to manage their therapy journey.
- The VGM program is designed with long-term engagement with the patient as part of the offering.
When combined with other VGM services, we believe we will have a program that can save your business money, increase your compliance, and in the end, better manage your patients.
Reduce the High Costs of Labor Today
All providers will be challenged with higher labor costs in 2023. Unfortunately, those changes will likely never go away. I haven’t spoken to anyone who believes they can raise salaries for a year and then reduce them as inflation or the fear of a continued pandemic reduces. The benefit of outsourced clinical services is the reduction of the need to find, hire, and train new clinical support positions. The rate at which these services can be sourced will be much lower than the cost of employing an individual to conduct similar activity on your behalf.
Beyond saving money, outsourcing can allow you to reallocate staffing resources. Instead of making calls or following up with CPAP accessory orders, your staff could spend their time bringing in new business or working with other patients outside of your sleep business.
Additional factors to consider for outsourcing in 2023 include the following:
- Grow Revenue Within the Existing Core Business
- Start New Projects Quickly
- Focus on Your Core Business Activities
- Compete for New Business in Your Territory
Your Resource in Outsourcing
If you don’t know where to start, try outsourcing your search to VGM. We were founded for the sole purpose of helping providers succeed, and we continually add services based on the needs of our members. If you would like to learn more about the many outsourced services currently offered by VGM, please contact your VGM account manager.
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This article was originally featured in the VGM Playbook: Forecasting 2023. To read the full article and more like this, download your copy of the playbook today!