It’s All About Change

If you’re looking for a blueprint on how to operate a successful home medical equipment company, you don’t have to look much further than Cranford, N.J.

That’s where Arcadian Healthcare is based. A 1999 roll-up of four companies, Arcadian has taken the strengths of each and built on them, says Gayle Devin, president and CEO. The result is an HME business that is the sum of more than its parts.

It hasn’t always been easy. Hard decisions needed to be made along the way, Devin says. “Our story illustrates the benefits of change, thinking outside the box, implementing sound business practices and of maintaining a primary focus on customer service,” she says.

Season of Change

Change started to come to Arcadian when Devin came on board in 2003. A registered nurse, she had a decades-long track record in the industry. She’d started out as a regional program manager specializing in enteral nutrition for the now-defunct Foster Care and swiftly rose to national director of Foster’s nutritional program. When she left Foster, she started her own business in the Chicago area, specializing in respiratory and enteral services, then sold and eventually joined Arcadian.

The company was a blend of four HMEs. One was a strong respiratory company and the others had strengths in pediatrics, Devin says. Initially known as Millennium Healthcare, the company had a lot of strengths, but “lacked a strong infrastructure” to leverage them, she says.

By the time Devin joined the company, which had renamed itself Arcadian in 2002, the infrastructure — or lack of one — wasn’t the only problem. “We were trying to be everything to everyone,” says Devin. “My experience tells me that sometimes that doesn’t work. You can’t really differentiate yourself in the marketplace.”

Devin and other company employees began to take apart and study every aspect of the business. What lines were profitable, which ones weren’t? How were complaints handled? How long did it take for a patient to be served? What did referral sources think of the company?

The questions were endless, and the answers that surfaced were often surprising.

“We divested ourselves of some products and services,” Devin says. Some of those were areas in which Arcadian was seemingly strong, she says — until they looked deeper.

“We had an excellent apnea monitor program, but looking at national and local competitors, we really couldn’t compete,” Devin says. “We had to look at profit margins and profitability, so we made the decision to divest out of the apnea monitor program.”

Arcadian also dropped its respiratory medication line. “We looked at what was in the reimbursement pipeline and we looked at profit levels and we decided it would be best to divest out of that. In looking back, it was the right decision.”

The company refocused its energies on its main strength — respiratory — and added two new lines. “We rebranded the company on clinical respiratory and added an enteral therapy program,” Devin says.

In order to offer a more complete range of services, it also added durable medical equipment. “We do a full line of basic durable. We don’t do custom or power chairs or specialty rehab,” says Devin, noting that the product mix “is custom-designed for our patients.”

Instead, Arcadian has worked to establish good relations with those companies in the area that do provide custom power chairs or do rehab so it can help meet its customers’ needs with a dependable resource, Devin says.

Out of the Box

The product lines weren’t the only area of the company that changed. Arcadian had been outsourcing its billing and collection, but Devin brought those functions back in-house in 2004.

“We had to establish a whole department,” she says. “When we outsourced, there was no delineation of whose responsibility it was to do certain tasks. [Bringing it in-house] necessitated the need to retrain our service reps on what was a good order, what was a bad order. We did a complete retraining.”

Devin didn’t stop there. She wanted to know what referral sources’ perceptions were of Arcadian. “It doesn’t matter if we think our company is great,” she says. “All that really matters is what our customers think.”

So Arcadian put together a referral perception survey that went to 500 referral sources and insurance companies. It was a brave move. “We asked them why they referred to home care companies, what was important, we asked for information on what types of patients they refer. We had them compare Arcadian with other companies — were we better or worse in delivery time, staff knowledge, insurance capabilities, patient feedback, sales reps, product availability, etc.,” says Devin. The company even asked why the sources did or did not refer patients to Arcadian.

The answers weren’t always what they had hoped. “We had some people say that making a referral to Arcadian was not an easy process,” Devin says. “We had an outdated answering system, and people would end up on terminal hold.”

She and her management team took all the answers to heart, and where it was necessary, they made changes. They also made sure to alert referral sources to the fact that the changes had been made, she says.

Sales reps were retrained to emphasize the need for a sense of urgency in responding to a case manager’s referrals and getting patients taken care of swiftly. The company began responding to faxed referrals so sources would know they had been received. A state-of-the-art phone system from Intertel was installed and customized to allow tracking of abandoned calls and wait times.

And they instituted a quick-turnaround service. “We can document that with our real-time vehicle tracking system,” Devin says proudly. Each of Arcadian’s vehicles is now outfitted with a touch pad with programmed messages that relays when the technician has arrived at or completed a stop, she explains.

“Faster communication and faster service is essential to meeting our customers’ needs,” Devin notes. “With our real-time vehicle tracking and communication system, we can actually see the location of each of our vehicles on a computerized map. Our dispatchers and our employees can send and receive messages through the communication system.”

The system, from Teletrac, has had a dramatic impact on efficiency, Devin says, because it allows the company to maximize the technician’s time. “Our technicians call in or message when they have completed their assigned route and we can call up our oxygen patients in close proximity … who are due for preventive maintenance on their equipment. The patients are called and asked if our technician can stop by to check their equipment.”

Such efficiency has saved on escalating fuel costs and also allowed Arcadian to respond swiftly to new patients because each truck carries additional equipment. “I refer to them as mobile warehouses,” Devin says, only half jokingly, adding that when a new referral is received, the company can determine where the nearest truck is and how fast it can get to the new patient with the equipment they require.

The company hasn’t stopped there. In order to minimize return visits, it has become a stickler for thoroughly training its technicians in setting up equipment and instructing patients on its use. “We pride ourselves on clinical and home assessments and doing appropriate instruction in the home. That affects the clinical outcomes and the complaint rate,” Devin says.

And in all cases, the complaint rate is down and the clinical outcomes are good. Since 2001, fewer than 2.5 percent of Arcadian’s ventilator patients required readmission to the hospital due to an exacerbation of their respiratory status, the company reports. Thirty-one percent of its ventilator patients are children, and some have lessened their dependence on the vents while others have been weaned off totally, Devin says.

She attributes such achievements to the company’s staff. “Our respiratory therapists and our technicians — they are the company,” she says. “Our employees are our assets.”

Even with all the positive changes at Arcadian, Devin knows one thing: There will be more changes. Looking toward competitive bidding and continued cuts from both Medicare and insurance companies, “it’s a challenging environment and it is ever-changing,” she says. “A company has to change with the times but not compromise the services [it] is offering.”

Which brings her to the one thing that will likely never change. “Our differentiating factors are our employees and the outstanding services we provide to our customers,” Devin says. “While high-tech systems have been implemented to complement our business, we have remained very high-touch with our customers.”

And Arcadian looks to stay that way.

The Arcadian Toolkit

Here are some of the tools Arcadian Healthcare has used to build its business:

• A real-time vehicle tracking and communication system. This aids in efficiency and routing. Arcadian can guarantee to its customers a two-hour turnaround/response time.
• A referral perception survey. On an annual basis, Arcadian asks hundreds of its referral sources to rate the company in 13 categories ranging from delivery and after-hours response to staff knowledge and financial flexibility. It incorporates many of those responses into a revised business plan of action.
• A customized phone system. Concerned that it was losing customers through abandoned phone calls, Arcadian now has a system that shoots an e-mail alert to the customer service supervisor and the manager when a call is abandoned. One of them is then responsible for returning the call within an hour.
• A monthly management “flash report.” In order to monitor how business is going on a regular basis, Arcadian has implemented a report that tracks 62 key metrics of the business.
• A quarterly newsletter for the health care community and referral sources. Each issue spotlights the company’s new programs and any enhancements to existing programs or services. In addition, articles focus on educating customers on aspects of the HME business, from reimbursement and manufacturers to resources, products and services. The newsletter is also used to introduce departmental employees.

Company Snapshot

Arcadian Healthcare

• Specializes in respiratory care, enteral nutrition, durable medical equipment and supplies
• Five branches in:
  Cranford, N.J.
  Eatonton, N.J.
  Voorhees, N.J.
  Brooklyn, N.Y.
  Milford, Del.
• Accredited by the Joint Commission for Accreditation of Homecare Organizations in clinical services and equipment management