Improving Profit With Business Analytics

The topic of business analytics has picked up a tremendous amount of momentum across industries in recent months—and the HME/DME space is no different. It has emerged as an important tool that uses data mining and statistical tools to identify and extract useful patterns and correlations among information such as relationships, dependencies and relative performance. With the growing popularity of business analytics, companies are beginning to grasp the importance of one seamless solution to ascertain the current state of business operations, as opposed to going through multiple disconnected applications to create mashed-up spreadsheets for comprehensive analysis. Whereas regular reporting can be a single source that tells you what happened with no context, business analytics—previously an overly complex, time consuming and costly endeavor—is now easy and cost effective, enabling business owners to make sense of the growing piles of data, understand why something is happening and gain insight into remediation and optimization strategies. Today’s business analytics puts management in the cockpit with a 360-degree view of their business. For years, only large companies with vast resources have been able to harness the power of analytics and use it to improve their businesses through increased efficiency and profits. Today, with the advent of cloud computing and SaaS-based technologies, new business analytics solutions leverage the same powerful and comprehensive tools and have become accessible, affordable and simple to use. In short, this tool provides small- and medium-size business owners with a competitive advantage in running their businesses that can ultimately help them make the right decisions to stand out in a highly competitive marketplace.

What Analytics Means to You

Data analytics is an opportunity, not a threat. As business owners have come to realize, there can be such a thing as too much information. With the volume of data continuing to grow at unprecedented levels, owners are seeing two options—cave under the weight of virtually endless data, or use it as an edge to analyze the business environment and refine their strategies accordingly to increase cash flow and drive profits. Because of competitive bidding, increased audits and other margin pressures, HME business owners specifically are looking for answers to keep their businesses accelerating and maturing. The truth is, these answers might already lie within their business networks in the form of untapped business intelligence. Business analytics provides HME business owners with the ability to understand where their business stands from the perspective of the past, present and future. Current reporting tools are useful in that they allow managers to know what is occurring in the moment but, unfortunately, don’t have the capacity to forecast where the business is going. It’s analogous to drive a car by looking through the rearview and side mirrors only. You can see where you are today and where you have been, but it’s very difficult to see where your business is headed when your focus isn’t forward. Business analytics is a diagnostic and predictive tool, empowering HME business owners in three critical areas: clinical effectiveness, operational effectiveness and financial performance. HME business owners can now visualize cause and effect relationships to understand how internal workflow processes impact both clinical and financial outcomes. Each area alone can provide substantial benefits to HME business owners, but when combined, business analytics creates a strategic business tool no HME business owner should be without.

Clinical Effectiveness

Patient care is at the core of any HME business. It’s the reason HME business owners started their businesses in the first place. Business analytics provide better understanding of patients and their needs, as well as leads to increased effectiveness across the entire continuum of care. Managing the entire continuum of care is becoming more important in health care overall as payers move to outcome based reimbursements. HME plays a role in the care continuum and referral sources, and payers will increasingly demand accurate and timely clinical care information from their HME providers. Business analytics can be an effective tool in driving compliance and meeting accreditation standards, as well. Correlating patient demographics with compliance reordering and payment information illuminates areas of compliance concern that can be quickly remediated. Visibility to performance management processes, and their clinical and financial impacts, assists in meeting HME accreditation requirements. Business analytics can provide the insights necessary to drive better outcomes for patients and quicker payments for HME providers.

Operational Effectiveness

Business analytics allows HME managers to visualize their entire workflow on a single display, enabling them to immediately understand bottlenecks and take corrective action. It also allows for the measurement and evaluation of key operating relationships to better plot future outcomes and make more informed decisions, while also improving adherence to regulatory requirements. The result is drastically improved competitiveness and profitability, eliminating silo reporting and gaining the opportunity to quantify operational cause and financial effect. Accounts receivable and denial management can be enhanced by correlating A/R, DSO and denial information into a single view, focusing attention on collecting what matters and providing training to personnel in key areas to minimize denials.

Financial Performance

By combining respective databases, including accounting and inventory, businesses have the ability to pull information from multiple sources simultaneously. Many reporting tools enable users to break down a single database, usually the financial program, ERP, CRM or other operational tools, but only a few merge these databases to gain a holistic view of overall financial performance. Business Analytics provides unique financial insight to profitability of products, payers, patients, referral sources, and locations. Now, HME owners can evaluate the quality of their business and not just the quantity. Given the state of the HME market, having a handle on past business performance is always helpful, particularly if good data is coupled with comprehensive visualization tools. Statistical and predictive analyses are two key elements that enable users to identify financial patterns or trends from past performance, and drive business optimization to predict future financial outcomes. Predictive Business Analytics enables the business owner to scenario-plan the future to better understand financial outcomes based on cause and effect relationships.

What’s Next?

If HME/DME business owners are considering new retail expansions, product mix changes or the effects of competitive bidding, business analytics can help cut through the clutter to improve the understanding of impacts to your business. Ultimately, providers can enhance their clinical, operational and financial outcomes by applying a strong decision support tool, such as business analytics. Providers can benefit from business processes measurements and begin to focus resources where they’re needed most, which allows decision makers to focus on clinical outcomes, cash flow, profitability and productivity. Businesses are never short of information. In fact, every two years, the amount of data an average organization stores doubles. Forward-thinking companies must embrace this reality to predict and respond to change, and reap the benefits of the evolving business climate. This article is part of the 6-4-18 series of Medtrade presentations highlighting six sessions that will provide HME dealers with strategic information for success and survival over the next 18 months.