Make money despite competitive bidding

Jan 22, 2014

Make money despite competitive biddingOxygen Transfiller with Liquid System
Everyone knows that the DME market has become much more challenging over the last several years with reimbursement reductions, competitive bidding being implemented, increased audits and regulations by regulatory agencies, along with other factors such as a nationwide recession.  These factors have made it more difficult to remain profitable for many DME companies.  The following are some suggestions that can help you save money.

Consider refilling your own oxygen cylinders.  By investing in a transfilling system you can then purchase oxygen in bulk from a supplier rather than having the supplier fill all of your individual cylinders.  This can usually provide you with at least a 50% cost savings and often can be as much as a 100% reduction in your cost of oxygen.  You also won’t need as many cylinders as part of your inventory.  There are many transaction cost savings that can be gained when transfilling.

Train customers to change their habits.  The traditional system of delivering supplies to customers involves high transportation and labor costs.  Consider revamping your company service offerings to encourage customers to come to your store to pick up supplies for non-emergency or non-essential requests.  Creating a smarter transportation policy can help you save what is often hidden money.

Provide patients with conservers.  Conservers can help oxygen supplies last up to 50% longer versus using traditional regulators on oxygen set-ups.  This longer usage per cylinder can help reduce delivery frequency which will ultimately save money.

Keep up with regulatory requirements.  Rules and regulations that affect DME businesses are important to follow.  By keeping up with all requirements you will promote safety for your employees and patients.  It is much less expensive, although it requires diligent hard work, to “stay on top of” regulations and remain compliant rather than reacting to a situation that may arise from a negative inspection.  By setting up and following proper company procedures and continually reinforcing the proper requirements through continual training of employees will keep you in good regulatory standing.

Remember quality when purchasing products.  The price paid for a product is very important, but shouldn’t be the only factor in purchasing decisions.  Sometimes paying just a little more for a product that is of higher quality and will last longer than less expensive alternatives makes more sense in the long run.  Better warranties should also be considered and part of the purchase decision.  

Make yourself more valuable to your customers.  Set up or expand your retail offerings.  Customers will usually pay for items that are not reimbursable out of pocket if they know that the item can assist them.  Making these items easily available to patients can greatly impact your bottom line.  Patient’s families and other caregivers are often strong advocates for purchasing convenience based items.

Consider if there are company functions that can be outsourced.  Some functions such as billing, various insurance verifications, collections, payroll and other administrative functions can be done more efficiently by outside companies that specialize in these functions.

Find a way to consolidate delivery vehicles.   Delivery and customer service are essential components of most DME companies.  You want to look for the most economical way to provide delivery services.  Consider using more fuel efficient vehicles or vehicles that do not require CDL drivers to save on fuel and insurance.  Also, evaluate the number of vehicles in the fleet.  Are they all necessary?  There are many shapes and sizes in vehicles to consider for delivery.  Also remember that distinctive looking vehicles are a way to get your company noticed around town.  Well designed “rolling billboards” can be a terrific way of marketing your brand.

 

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