During the past decade, home health care providers have taken their share of financial hits. Operational costs are continuing to rise and Medicare reimbursement rates are not keeping up with inflation. The aggregate fee-for-service (FFS) Medicare margin for freestanding home health agencies was 15.8% in 2019, according to the Medicare Payment Advisory Commission; however, margins ranged from 3% to 24.5%, with larger agencies clearing higher profits.
These monetary pressures make it even more necessary to find cost-effective ways to reduce operating costs and increase revenue. Route planning software is one of the best ways to accomplish this goal—and it’s a must for several reasons.
Homecare nurses, aides and therapists drive 4.8 billion miles per year to reach home-bound patients, according to a National Association for Home Care & Hospice study. Home health care companies must reimburse workers for mileage when they use their own cars to get to patients due to a tax law change in which workers can no longer write off mileage. And fuel costs comprise 60% of home health care companies’ annual fleet operating budget.
Given the tremendous amount of driving involved in operating a home health care business, route planning software is an absolute necessity for cost-conscious home health care business owners and managers.
What Is Route Planning Software?
Route planning software is a tool that quickly generates the most efficient routes for home health care workers visiting homebound patients.
Optimizing a route with route planning software is a simple three-step process:
- Upload or input the addresses of the day’s patient visits.
- Click the “Optimize” button.
- Once the route has been generated, it can be printed and/or exported to a driver’s smartphone or tablet and configured with turn-by-turn navigation.
Significant benefits occur when home health care companies deploy route planning software, including:
- Saved time for office staff—Route planning software generates the most efficient route in a few minutes. When home health care company managers optimize routes manually, it often takes several hours per day.
- Reduced fuel costs—Route planning software generates more efficient driving routes, which reduces the number of
- miles driven. This helps reduce fuel costs, which are the biggest expense of operating a fleet.
- Reduced labor costs—More efficient routing means drivers spend less time driving each day. Nurses, aides and therapists can get to their patients faster, which can reduce overtime costs.
- Reduced carbon emissions—The homecare industry adds significant carbon emissions into the atmosphere because it’s so driving intensive. The use of route planning software is one of the most affordable ways to reduce a home health care company’s carbon footprint.
- Mileage reimbursements that are more accurate—Route planning software documents the number of miles that will be driven for a given route (i.e., the day’s round of patient visits). This data helps home health care managers ensure that mileage reimbursement claims are accurate when home health care workers are using their own vehicles.
- Reduced vehicle maintenance costs—When you cut back on the miles needed to get patients visited, it takes longer between oil changes or new tires.
- Reduced risk and accidents—The less time employees are on the road, the lower the odds of getting into an accident. In addition, optimized routes can be exported to a driver’s cellphone for turn-by-turn navigation instructions. This reduces distracted driving because homecare professionals can keep their eyes on the road, instead of reading instructions or a map.
- Increased revenue potential—More efficient routing helps create opportunities to handle more patient visits per week and increase revenue.
How to Evaluate Routing Software
There are a lot of route planning software options on the market—and the pricing models can be confusing. Here are some tips to make sure you’re not spending too much:
1. Seek out simple pricing.
Some route planning software providers have pricing models that are so complicated, it’s hard to tell what you’d really be paying per month. Choose a software provider with a simple, straightforward and clear pricing model that you understand.
2. Compare the functionality you get at various price points of the software.
Some companies charge a subscription fee and you get all the functionality of the route planner for that price. Other companies have “starter” offerings with a low monthly price, but you don’t get the full software capabilities. Make sure you understand what functionality is available at the various price points.
The demand for home health care services is continuing to grow at a time when financial challenges for the industry continue to increase. As a result, it’s imperative that home health care company owners and managers deploy some form of route planning software to mitigate these effects.