Manage Your Respiratory Equipment More Efficiently

Respiratory equipment is one of the most lucrative areas in the home medical equipment (HME) industry. Although reimbursement rates have been reduced, there is still plenty of margin to be made.

Proper management of this equipment is often one of the most overlooked and underserved areas of the HME business, potentially leaking tens of thousands of dollars per year.

This article will address ways to stop those leaks, improve efficiency and add more dollars to your bottom line. The key word here is “efficiency.” Identify the number of people involved in the workflow of equipment management and set a goal to reduce the number of touches, key-strokes and equipment moves in the process. Then you can either shrink your workforce or re-deploy those resources to revenue-generating activities.

Here are 9 steps you can take to better position yourself along the way:

1. Know your assets.

I’m constantly surprised at how many HME companies do not know the status of their fleet of respiratory equipment. They often can’t answer simple questions such as: How many concentrators/vents/portable oxygen concentrators do you have? Where are they? When were they last serviced? What are the preventative maintenance due dates? Many companies rely on spreadsheets to keep track of this information, which is great if the proper data is tracked and updated. Other digital tools are available, but, like everything else, they must be constantly updated. Be digital, track the right data, keep it updated, make someone responsible for the task and use this data to make better business decisions.

2. Stay on top of preventative maintenance.

Like changing the oil in your car or rotating your tires, proper preventative maintenance will extend the life of your respiratory assets. Regular preventative maintenance is required for ventilators and is often checked by regulatory authorities. Oxygen concentrators (both stationary and portable), humidifiers, apnea monitors, cough assist machines, etc. all also benefit from regular maintenance. Keep careful track of both operational hours and calendar dates and give your equipment the proper care it deserves. In turn, it will give you months or years of additional service and profits.

3. Reduce shipping costs & damage.

HME companies spend hundreds of thousands of dollars a year on shipping-related damaged equipment. Dealers often receive ventilators and other equipment packed in shoe boxes or other inappropriate containers. Often there is insufficient bubble wrap or packing materials protecting this valuable equipment. Establish standard operating procedures for proper equipment packing. Make sure your warehouse staff is properly trained in packing techniques and has the right boxes, tape and packing materials to protect your assets.

Whenever possible, work closely with your equipment service provider to establish regular schedules to pick up and deliver your respiratory equipment. It’s better to give equipment to your service partner than to UPS or FedEx. Review how you transport equipment between your various locations and work with your service provider to pick up and deliver to these locations to avoid unnecessary shipments.

4. Minimize turnaround time.

Every day a unit is not with a patient is lost revenue. Keep track of the turnaround time (TAT) with your vendors and insist on accurate data to monitor this. Again, a digital platform is really the only way to efficiently track TAT, so do it religiously. One way to do this is to maintain a small stock of patient-ready equipment with your service provider. As soon as you generate a return merchandise authorization to send equipment in for service, your service provider delivers a patient-ready replacement unit.

Do you have hoarders? Excess inventory is often found hidden in branch locations. Depending on the number of locations in your business, if each branch has just two or three units, the numbers build up fast. Offer amnesty to all branches to turn in hoarded equipment, and give a few of these units to your service provider. They can then deploy them directly to the branch that has an immediate need for a new setup.

5. Estimate approvals.

This is another area for immediate improvement in the business process. Most companies make the “repair or retire” decision when the repair price is about 50% of the replacement cost. Work closely with your equipment service provider and establish “not to exceed thresholds” for each category of equipment. If the repair cost is <X, repair it. If the cost is >X, scrap it. This speeds turnaround time and controls the costs. Another approach is to work with a digital platform. For example, in the one we use at Quality Biomedical, estimates are generated by the technician and then emailed and posted to the online portal, where they can be reviewed and approved or declined in a matter of seconds. Appoint someone in either purchasing or asset management to do these approvals.

6. Maintain digital service records.

If your service records are located in a file cabinet, you need to join the 21st century and make them immediately accessible to anyone who needs them. These service records should be available by clicking on a serial number and should include up-to-date information on the total cost of asset maintenance and the parts used. Either work with an equipment service provider offering this online service or scan your paper service records into a digital platform. This alone may save you thousands in better decision-making.

7. Reduce the number of vendors you work with.

Let’s face it, the more vendors you have to manage, the more time and effort is required. Consider shipping mistakes, invoice errors, tracking numbers, purchase order tracking and warranty management—and you’ve got enough work for two or three full-time employees. More companies are simplifying their business by finding one vendor to handle the bulk (if not all) of their respiratory equipment.

Equipment is often sent back to the original equipment manufacturer (OEM) for service. This is often the most expensive and time-consuming way to get your respiratory equipment serviced. Ask the OEM for a list of their service partners in your area, and identify one that meets most, if not all, of your needs. Then use them and stop working with the others.

8. Collaborate with your equipment service provider.

As a respiratory equipment service company, we can attest to the savings achieved by our clients who work closely with us. Proper preventative maintenance schedules, pick-up schedules, efficient logistics, faster turnaround programs and easier estimate approvals are all parts of the business process improvements that can be implemented when two companies work closely together. It’s all about efficiency—and collaboration generates efficiencies.

9. Ensure interoperability.

Finally, when you have all your information on one digital platform, managed by one person, things run smoother and the data is more accurate. Look for service providers that have integrated with your enterprise resource planning platforms, or at least have a digital platform for equipment service management. Once your designated staff member gets comfortable with maintaining the data, your equipment management program will generate significant savings in many ways.

In summary, respiratory equipment management has many moving parts. Companies often fail to recognize how many employees are involved in managing these moving parts and the high cost of the process. So review your process from end to end, looking for ways to reduce the number of touches, keystrokes and involved staff. Take one area at a time—reduction in vendors, for example—and then begin to improve the process throughout your company.

The result? Faster growth, easier scaleability and better margins. Isn’t that what business is all about?