Citizens Memorial keeps score

BOLIVAR, Mo. - Rather than focus on all that's wrong with the HME industry, Mike Calhoun prefers to focus on all that's right (and what could be right, with a little elbow grease) at Citizens Memorial Home Medical Equipment.

Calhoun, director of HME, keeps abreast of reimbursement and policy changes, but he doesn't really dwell on them.

“People get down about what's going on, and I don't know that that benefits anyone,” he said. “I'd rather talk about the things that are important for a successful company.”

That's why, in 2009, Calhoun began setting minimum goals, stretch target goals and annual goals for 12 performance indicators, and measuring Citizen Memorial's success. The approach, widely used in other industries, is called the balanced scorecard.

In November, Calhoun reported that Citizens Memorial was doing better than he thought for some indicators, like the number of days a bill sits in accounts receivable. He set a goal of 39 and it's at 37.

For others, Citizens Memorial has some work to do. For number of days between delivering a piece of equipment and submitting a bill, it's at about 16 days, with a goal of about 13.

But no one's crying over spilled milk. Calhoun shares these measurements with all employees, providing incentives when goals are met and education when they're not. That way everyone is motivated to improve where necessary.

“We all know what we're working toward,” he said. “Billing reps and drivers know what their goals are. Managers know what their goals are.”

Those are “good basic management principles,” says industry consultant Karen Moore.

“Making employees feel part of the team and giving them the tools to be successful—it kind of energizes people,” said Moore, vice president of Ancor Healthcare Consulting.

Another good principle: Focusing on the “meat and potatoes” of a company, as Citizens Memorial does, Moore said.

“You have to document your processes,” she said. “That, I believe, determines the success of a company.”