Make your HME/DME operation smarter and more measurable: top 3 performance indicators you need to know!
The demand for home medical equipment (HME) in the United States continues to rise with $12.6 billion in sales projected by 2018. Coupled with this year’s crippling changes from Medicare and more competitive bidding among providers, it’s more important than ever that you leverage the right software solutions to run your business in real time.
Automated workflows and effective metrics are no longer just nice-to-have tools. For HME businesses, they are as critical to your success as your vehicle’s brakes and seatbelts are to your safety. Let’s look at the top three performance indicators that can help you make sound decisions on cash flow, receivables and sales projections. That way, you can keep your company in the “know” and out of the red!
Know Your Winners from Your Losers
Tracking historical data of sales and profit by product type allows you to know, in real time, which products are driving profits to your bottom line. Rely on fully integrated billing software to track and measure the effects of changing reimbursements on your products – without the hassle of using standalone spreadsheets or employing a costly consultant. Identify a problem with a specific product line the minute it dips, and use your sales data to instantly calculate gross and net profit for all payers or selected payers. This will give you the opportunity to adjust your formula and sales strategy. Make it your business to not only project, but measure the actual profit by product.
Don’t Wait; Drive Your Receivables!
With long billing cycles and denials, it is critical to automate your cash flow and intelligently forecast 30, 60, and 90 days out so you stay in control of your cash. Monitor trends like DSO, revenue billed versus collected, revenue held for pending documentation, new sales orders versus confirmed sales orders and more with an intelligent dashboard. Take advantage of tools that can help you manage your outstanding A/R with real-time reports and interactive worklists that you can distribute electronically among your staff. These strategies will help you effectively measure where your money is by payer and timeframe, and actively collect your receivables.
Forecasting Sales that Improve Patient Health is Success Forecasting
Many HME businesses offer a combination of equipment sales and rentals for a wide array of products. For HME providers, forecasting strong and diverse revenue streams is critical to the success of your business. Revenue projections that break your income down into profit margin by product are a recipe for success. Ensure you have solid metrics in place to track which products are having the most dramatic effect to patient rehabilitation as reimbursements and patient recovery are often connected. Sales forecasting goes hand in hand with your cash flow management so you know what you have coming in now and are pursuing what you really need in the future. Match your forecasts against compliance and therapy reports to drive sales with products that have the greatest effect on the health of your patients.
If you’re just moving cash without driving much revenue, you can’t succeed in this industry. The key to long-term survival boils down to knowing which products make you the most money, active pursuit of your cash receivables, and a dynamic sales strategy that focuses on patient care.
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