Industry DSOs lengthen

Monday, September 30, 2002

ALEXANDRIA, Va. - The HME industry's overall accounts receivable DSO lengthened from 81 days to 85 days, according to AAHomecare's 2002 Financial Performance Survey Report, released last month. The boost is the first such increase in four years.

Since the survey also found that capitation represents 4% of the industry's payer mix, versus 1% last year, AAHomecare editorial board member Bob Cucuel said he would have expected the DSO to drop three to four days. Beyond the "same old battles with Medicare," - i.e. reporting and documentation requirements - he can't say for sure what might have prompted the increase.

After 20%-25% jumps in survey respondent participation over the last two years, the 2002 report stands as the industry's most authoritative analysis of financial benchmarks ever. The results reflect input from 199 companies of various sizes and business lines, representing $3 billion in total annual revenue, 1,686 locations and more than 26,800 people.

If the participation in the annual survey increases over the next couple of years, as it has for the past couple, the survey's orgranizer, Willam Cron, said the report would provide business information "as good as you'll find in any industry."

For the first time this year, Cron and AAHomecare enlisted an editorial board, including four HME company presidents, to help assess the crunched data. "We tried to make the survey a living and breathing and expanding document," said AAHomecare's James Jorkasky.

Last year for the first time, the survey gathered data on fuel and utility expenses that AAHomecare later used to calculate costs when the association was fighting its AWP battle.

Also new this year is a section on clinical efficiencies. One nugget from this section: 52% of a respiratory therapist's time is spent on patient visits, with the remainder focused on documentation, communications, and scheduling. HME