Welcome to 2024. Let's Talk Root Causes!

Published in Member Communities on February 27, 2024

By Kim Cuce, Director of Business Optimization, VGM & Associates

Everyone goes for an annual checkup, right? No symptoms, you still go. Why not give your business the same treatment? Maybe we go to the doctor because we have constant headaches; it’s not likely they will give you Advil or a Band-Aid and send you on your way. They are likely to do a series of things to determine the root cause of your headaches.

Sounds silly to open the article with this, but if I put that scenario into the DME world, we often use Band-Aids to help with the problems. If you have high dollar amounts sitting in $90+ or $120+ buckets, the Band-Aid often used is to hire more people to collect the money. This may temporarily help the symptom of slow collections, but you will still have the problems going forward because you did not fix the root cause. Why do we struggle with submitting a clean claim initially? This is the root cause.

Let’s talk about a few of the things that come up often when I’m talking to providers:

• Building a Team
• Streamlining/Process Improvement/Process Mapping
• Outsourcing
• Partnerships
• Maximizing Revenue

Building a Team

Let’s face it, most people don’t want to “shop” at a DME company. We are not selling red dresses, vacations, or fancy cars. Our customers need the equipment and services due to a health condition that affects their everyday life. Building a team with that understanding is a game changer for your company outcomes.

The term customer service representative (CSR) is commonly used for naming the intake team and is also used in every industry. A CSR in most industries is distributing products that a customer wants, and we are supplying products that someone needs. There is a significant difference between the two. 

Understanding each of the positions and characteristics needed to maximize that position will immediately change team morale in addition to your customer outcomes. Easier said than done in our fast-paced environment. We don’t always have the time to do it. 

As Jim Collins writes in his book, Good to Great, “Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, technology, or competition of products. It is one thing above all others: the ability to get and keep enough of the right people.”

The general burden of finding, training, and retaining staff plagues all of us. Look within your own team and revitalize them by potentially restructuring them to suit their core competencies. You may have all the right people on your team; however, getting them in the right seat or position is another leap of going from Good to Great.

Streamlining/Process Improvement/Process Mapping

Have you ever process mapped from the time an order comes in all the way through final payer from the employee’s perspective?

When you sit with the actual team members performing the duties, you will find out exactly what is being done versus what may be in a policy (somewhere). This act also helps engage the employees to assist with solutions or discuss the consistent issues while performing functions. It will give you insight to the time it takes for each function, which can bridge you into researching technology to assist, duplication of the process, number of team members doing the same function, or maybe if outsourcing is an option.

One of my favorite examples of this scenario is insurance eligibility. Most software can automatically check eligibility; however, the sticker shock is often a deterrent for companies. I recently did a time study based on this function alone for a company. The cost was $0.23 per eligibility check. The company did approximately 10,000 orders per month. The underlying functions of logging into another system, printing the results, and scanning them back into the system were very costly. 

Outsourcing

Outsourcing is no longer a simple cost-to-cost. There are numerous benefits to outsourcing, but it can be a bit of dance at first. With the proper work and right footing, outsourcing could be a viable option for your company. Outsourcing could be a temporary scenario that may or may not turn into a permanent one. There are many full-service options, but many also have à la carte options that better assist you with the immediate need. With that, outsourcing is not a solution for every company, but it’s worth considering when looking at the overall health and performance of your company.

Some things to think about besides costs when considering outsourcing:

• Reallocating your team to provide exceptional care to your customers. It is hard to provide exceptional care if you’re the one on the phone attempting to obtain an authorization for long hours.
• Use your team to grow in a market or product category.
• Hiring, training, and retaining staff.
• Struggling to compete with wages from other industries.
• Bringing more expertise to your team. With outsourcing you have partners that have seen the same struggles assisting them successfully.

Partnerships

For years, we have all been driven by trying to get the best cost on every item. And to some extent it was necessary and still is. There are some hidden costs that we do not consider when comparing the sticker price of an item between multiple vendors. Let’s take wheelchairs for example. You can buy a standard wheelchair from several vendors within dollars of each other. It seems logical to always buy from the vendor offering the lower price, right? That tends to lead into inventory housing 10 different wheelchairs. It may look great from a purchasing and cost of goods outlook.

Have you considered the hidden costs that do not have a price tag?

• Your team needs to be trained on multiple types of wheelchairs to be confident when delivering or troubleshooting for the customer.
• You must order, receive, and stock all the distinct parts for all the chairs for repairs and maintenance.
• The frustrations when your team cannot remember every detail about the varying products.
• You may be losing the bulk pricing that one vendor may offer.

This has always caused me to pause. Am I saving $5 a chair, or am I increasing expenses that I cannot even quantify in addition to frustrating my team? This may not always be an option for many reasons, but it is worth a discussion.

Take a pause. Am I saving $1 to really spend $10?

Maximizing Revenue

Here’s the most important thing to all of us. Many times, providers will say to me, “You need to fix my A/R. The billing team is not doing a great job.” This may be the case, but the reality is that it is a symptom of the issue and not the root cause.

Maximizing revenue is no longer about just one function. It is a combination of clean intake, education with your team, process mapping, and making the most out of every step. There needs to be consideration with both outsourcing and the right vendor partners. In addition, suppliers need to be sure that the explanations of the patient’s financial responsibility are relayed properly. Having all of that wrapped up into one nice package along with making sure the right people are in the right position contributes to maximizing your revenue and a betterlooking A/R.

Stay tuned for further insights into your company’s root cause analysis through our financial health check. We look forward to assisting you on your journey to financial well-being.

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This article was originally featured in the VGM Playbook: Forecasting 2024. To read the full article and more like this, download your copy of the playbook today! 

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