Compliance: Leverage your adherence program
A. Fortunately, the upside profit potential of a comprehensive adherence program makes it worthwhile to invest the time and resources required for implementation. Of course, there are costs to implementing such a program—but with the right mix of people and technology, adherence is profitable in the short term and certainly in the long term.
Let’s explore, in rough round numbers, how CPAP adherence impacts your bottom line. There are two things to consider when you look at the economics of adherence: 1) the additional rental and supply revenue realized in (at least) the first year after the first 90 days and 2) the additional revenue realized from increased referrals. The second is often overlooked but should not be. Running a great adherence program makes you more competitive in your market. You can, and should, leverage your program to generate more referral volume.
My estimates here assume that the patient is with a payer, like Medicare, that requires proof of compliance before a full year of flow generator rental can be billed. They also assume that an adherent CPAP patient generates roughly $1,000 in incremental supply and rental revenue after the first three months.
Here is what the additional revenue looks like when you go from 60% adherence to 70% adherence with a group of 1,000 patients. At 60% adherence, 1,000 patients would generate $600,000 in revenue after the first 90 days. At 70% adherence, a 10% improvement, the same 1,000 patients would generate $700,000 in revenue.
If you are able to leverage your new adherence program and generate, say, 10 more referrals per month, that’s 120 patients per year. At a 70% adherence rate, you have increased your revenue by another $100,000.
You can play with the numbers however you want, but I think it’s safe to say that an adherent patient adds substantial revenue to your top line. And my scenario doesn’t even take into account the ongoing supply revenue in years two and beyond.
Doug Hudiburg is vice president of marketing and sales for CareTouch Communications. He can be reached at firstname.lastname@example.org or 303.565.2345.