Best practices for respiratory management

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Tuesday, May 5, 2020

Proper management of respiratory equipment is one of the most overlooked and underserved areas of your business, potentially “leaking” tens of thousands of dollars (or more) per year.

Know your assets

I’m constantly surprised at how many HME companies do not know the status of their fleet of respiratory equipment. Simple questions such as: How many concentrators/vents/POCs do you have? Where are they? When were they last serviced? What are the PM due dates? Many companies rely on spreadsheets to keep track of this information, which is OK if the proper data is tracked and constantly updated. Other digital tools are available, but like everything else, they must be constantly updated.

Action: Be digital, track the right data, keep it updated, make someone responsible, and use this data to make better business decisions.

Conduct Preventative Maintenance 

Just like changing the oil in your car or rotating your tires, proper PM will extend the life of your respiratory assets. Regular PMs are required for ventilators and are often checked by the regulatory authorities. However, O2 concentrators (both stationary and portable), humidifiers, apnea monitors, cough assist machines, etc., will all benefit from regular maintenance. 

Action: 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.

Reduce shipping costs and damage

HME companies spend hundreds of thousands of dollars a year in shipping-related damaged equipment. As a service provider, we often receive ventilators and other equipment packed in shoe-boxes or other inappropriate shipping containers. Often there is insufficient bubble wrap or other packing materials to protect this valuable equipment.

Action: Establish SOPs for proper equipment packing. Make sure your warehouse staff is properly trained in packing techniques and they have 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 always better to give it 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.

Reduce turnaround time

Every day a unit is not on a patient is lost revenue. Keep track of the turnaround time 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 an RMA to send equipment in for service, your service provider delivers a replacement unit with a fresh PM. 

Do you have hoarders? We often find excess inventory “hidden” in various 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.

Action: 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 who has an immediate need for a new set up.

Estimate Approvals

This is another area for immediate improvement in business process. Most companies make the “repair or retire” decision when the repair price is about 50% of the replacement cost. Therefore, 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. It the cost is >X, scrap it. This speeds turnaround time, as well as controls the costs. Another approach is to work with a digital platform. 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.

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 to make better business decisions. These service records should be available by clicking on a serial number, and having up-to-date information on the total cost of asset maintenance and the parts used.

Action: 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 tens-of-thousands of dollars in better decision-making.

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 to manage them. Consider the shipping mistakes, invoice errors, tracking numbers, PO mistakes, and warranty management, and you’ve got enough work for two or three FTEs. More and 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 OEM for service. This is often the most expensive and time-consuming way to get your respiratory equipment serviced.

Action: Ask the OEM for a list of their service partners and identify one that meets most, if not all, of your needs. Then use them, and stop working with the others.

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 PM schedules, pick-up schedules, efficient logistics, faster turnaround programs, and easier estimate approvals are all parts of the business process improvements that can be generated when two companies work closely together. It all about efficiency. And collaboration generates efficiencies.

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.

Action: Look for service providers that have integrated with your ERP 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, perhaps reduction in vendors, and then begin to improve the process throughout your company.

The result? Faster growth. Easier scaleability. Better margins. Isn’t that what business is all about?

Jim Worrell is the Chief Commercial Officer for Quality Biomedical, specializing in respiratory equipment management programs. He can be reached at jworrell@QualityBiomedical.com.