Taking stock

Tuesday, July 26, 2011

ATLANTA - Four months after software vendor Brightree bought Pacware, some HME providers are elated, some are distressed and some don't know what to think.

Provider David Baxter switched from Pacware to Brightree in October of 2009, just before the acquisition. He says Brightree's advanced reporting capabilities have helped him increase his collection rate from 85% to 96%, adding about $500,000 to his bottom line in the first year alone.

"Everybody's doing Excel spreadsheets to data mine, trying to figure out what they're doing wrong," said Baxter, owner and president of Columbia, Tenn.-based Medical Necessities & Services. "With Pacware, I kept hiring people to pull this data manually. But with Brightree, you have a software program that does it all for you."

Baxter says the combination of more money coming in (increased collectibles) and less money going out (fewer employees) has made the more costly Brightree system worth it. With Pacware, Baxter paid a one-time fee for a client-server system and a low monthly fee for maintenance and service (think thousands of dollars per year). With Brightree, he pays no one-time fee but a significantly higher monthly fee for a web-based solution (think tens of thousands of dollars per year).

"I was in that boat, thinking, 'Hey, if I can pay a low fee per month, I'm going to win,' and I thought I was winning, but my company started to suffer, because I couldn't get the utilization out of my software that I needed to," he said. "We're elated now."

Some providers that have remained with Pacware say they're upset that their monthly fees have gone up since the company was bought by Brightree. One small provider with one location said his monthly fee went up 38%, from $160 to $259 per month.

Another provider that has also remained with Pacware pointed out, however, that the company hasn't increased its monthly fees in the 15 years he's been using the system. One provider that uses another system says his monthly fees go up 5% per year.

"It's a bummer, but OK, bite the bullet and do it," said Jim Leedom, owner of Lomita, Calif.-based Home Health Depot. "I'm thankful it's still an option, because the alternatives are even more expensive."

Another provider that, so far, has remained with Pacware, says he's considering switching to another software vendor, but he's not sure what he's going to do.

"Very few providers are, ultimately, happy with their software," said Tom Bradley, owner and president of Orem, Utah-based Petersen Medical. "They all have strengths in some areas but failures in others. It's all about picking the lesser of the two evils."

Other providers say that $259 in monthly fees is peanuts. While that provider pays one fee for one location, they pay multiple fees based on the number of users. They say sticker shock shouldn't get in the way of good business decisions.

"We pay on a per-user basis and we have 40 users," said Gary Sheehan, president and CEO of Sandwich, Mass.-based Cape Medical Supply, who recently transitioned from MestaMed to Brightree. "It's not an inexpensive system, but it needs to perform. It may cost more, but once you net it all out, you're getting more value from your investment."