There are many harsh realities to the complex rehab and DME industries.
We are faced with an endless barrage of reimbursement cuts,
rules changes, and miles of red tape, simply to deliver a piece of equipment
to a client in need.
This daunting process could be likened to a marathon runner who is
told that the other contestants have to run the 26.2 miles, while he must
run 50. Added to the increased distance, the runner must also run with a
200-lb. sack of bricks on his back, and during the race, spectators will try
to trip him and make him fall.
Our industry for the first time in our history has coalesced to address
these challenges, but much work is yet to be done.
Endangered Providers, New Refugees for Today
Most complex rehab providers will agree that while running this race,
service after the sale can often stretch a company to the breaking point.
Earlier this year, I attended a rate hearing at Texas Medicaid with
several other companies to argue against the proposed 9.5-percent cut for
complex rehab items. The Greater Texas Rehab Providers’ Council (TXRPC)
consists of complex rehab providers and partners, with its goal being to
ensure provisioning of enabling technologies and accessibility to these
technologies for individuals with disabilities. In this rate hearing, about 10
representatives from our industry articulated the access-to-care issues that
would result from such drastic cuts.
My peers performed exceedingly well, and we were successful in
preventing the cuts. In my presentation to the committee, I explained
that these access-to-care issues would have a direct impact in the
Houston market.
In the last two years, three major complex rehab providers in Houston
closed their rehab doors. The result was a barrage of wheelchair users
who suddenly found themselves with no place to have their equipment
serviced. In some instances patients were turned away by rehab providers
simply because they didn’t have the particular insurance contract held by
the patient. In other cases providers simply could not physically add new
service patients for fear of failing their own existing clients.
When we think of the term refugee, we think of war-torn third-world
countries. The truth is a new form of refugee is emerging in many towns
and cities throughout our country. These refugees are “healthcare refugees.”
These are individuals who find themselves confined to bed with a
broken wheelchair and no rehab provider to repair their equipment.
Fortunately in Houston, the situation has improved. Yet the healthcare
refugee issue still looms like a gathering storm. If the gap between reimbursements
and costs associated with wheelchair repairs continues, the
volume of healthcare refugees will increase at an alarming rate.
So what to do in the interim? Many of our trade organizations and
manufacturers continue to fight on Capitol Hill to repeal competitive
bidding. If every reader of this article simply picked up the phone and
called their representatives to support H.R.
3790, which certainly would be a great
first step, it would make a significant and
measurable difference. In our office at
Active American Mobility, we ask our entire
staff to call. We give them the time to do
so during their workday. I would certainly
encourage you to do so.
Coordinating a Service
Program
While legislative efforts are happening,
we still have businesses to run. Thus we
must look at efficiencies within our own
organizations.
Often when a client calls for a repair, the
first person who answers the phone handles
that repair until it is seen through. There is
nothing wrong with this approach. When
we formed our complex rehab division at
Active American Mobility, this is exactly
how we operated.
In the beginning this process worked quite well. But over time, we
discovered that this process was becoming more difficult to manage, and
the frequency of errors was on the rise.
Our management team decided to create a new position called a
“service coordinator.” Once this position was created, service became
much more manageable, and client satisfaction increased dramatically.
Another positive impact of this decision was our other rehab admins
working the pipeline for new equipment saw greater efficiencies in their
respective roles.
The service coordinator now takes all calls for repair, schedules all of the
service calls, and is the go-to person for all things service.
Warren Buffet once said, “It takes 20 years to build a reputation and
five minutes to ruin it. If you think about that, you’ll do things differently.”
I think everyone will agree that better service is good for the patient, the
company, and the referral source.
A Checklist for Successful Service Departments
In interviewing several rehab providers for this article, I heard many
creative and effective ideas on efficiency as it relates to service:
• Measure Gross Profit Margin and Net Margin on every
repair. Set a tripwire that if a gross profit margin (GPM) drops below a
set percentage, the employee must explore other means to increase the
margin before submitting for a purchase order to obtain repair parts. (In our company that threshold is 35 percent.)
• For providers who do mobile repair, always encourage the client
to come to your facility.
• Ensure that each technician’s vehicle is always properly
stocked with items such as batteries to eliminate the need to make
multiple repair calls.
• Have a person other than the service coordinator issue
purchase orders. Checks and balances are a good thing.
• Train technicians to know how to do a home assessment on
each call. They can then offer to do home safety assessments for the clients
they visit. Bathroom equipment, ramps, etc., are often needed by the
consumers you serve and are easy cash-sale items. Ensure that each tech
has a few ramps, double hinges, etc.
• Management should enforce a culture where each employee
understands that a 30-cent bolt for a repair client can end up costing you a
million-dollar account.
• Create a formulary for commonly stocked items such as seat belts,
headrests, etc. Buy them in bulk, and negotiate for a volume discount.
Henry Ford once said, “A business absolutely devoted to service will
have only one worry about profits: They will be embarrassingly large.”
While we may not see embarrassingly large profits in our service departments,
better service is good for the bottom line.
