Maximizing MPG Through GPS
Satellite fleet tracking helps HME providers get out from under high gas prices and find new efficiencies.
- By David Kopf
- Nov 01, 2008
The old saw about the only sure bets in life being death and taxes was only two-thirds correct. It leaves out one very important factor that HME providers know only too well: That gas prices will always go up.
And that rise has been brutal over the past few years. Not even five years ago, the price of a gallon of regular gas was less than $2. This summer it topped $4. At press time, prices were hovering in the $3.50 range, depending on location.
For delivery-intensive businesses, such as providing home medical equipment, those rising fuel prices represent a huge chunk of overhead that chews away at profits. With diminishing Medicare funding income, providers must seek any and every efficiency they can to cut that overhead while maintaining service and care quality.
One such provider is Abundant Homecare (Poway, Calif.; www.abundanthomecare.com
). Abundant Homecare is a general provider of “hard” DME, such as hospital beds, wheelchairs, canes commodes and similar equipment to its patient customers, but it also operates a respiratory department, and provides rehab mobility, as well. It operates two locations, its main operation in Poway, along with a showroom in Escondido, where all its offerings are on display for patients to examine.
Abundant Homecare operates 12 to 13 of vehicles running between 80 and 100 stops a day all over the San Diego area, as well as Temecula and Murrieta, according to Mike Coe, warehouse manager of Abundant Homecare. Additionally, Coe says its rehab department runs another three or four trucks, which can range as far as Los Angeles and San Bernardino. Anyone familiar with Southern California’s geography will instantly recognize that this is a sizeable territory to cover.Enter GPS
Given that range, Abundant Homecare decided to GPS-enable its small fleet of trucks. The primary reason for this undertaking was sky-high fuel costs, Coe says, but that wasn’t the only reason.
“Gas was one of biggest factors,” he explains. “But also the climate of our business. With Medicare making a lot of radical changes, we needed to make radical changes.”
This hasn’t been Abundant Homecare’s first foray into GPS, Coe notes. The provider first started by using Nextel phones that had GPS capabilities. Since Abundant let its drivers take their vans home, the GPS-enabled phones helped keep a lid on any extracurricular driving. That is, until drivers started turning them off or leaving them somewhere.
“We needed to know where we could cut costs, how we could cut costs, and save where and tear on the vehicles,” he says. “And we just couldn’t do that with the Nextel phones. So it prompted us to start looking for a better GPS system.”
After much research, Abundant Homecare decided on a GPS solution from nearby fleet management systems reseller A&D Technology Inc. (Escondido, Calif.; www.adtechgps.com). The system it went with was the Networkfleet 3500, which is made by another San Diego-area company, Networkcar (www.networkcar.com).
The system comprises a few simple elements, according to Al Trevisan, the president of A&D Technology. First, the Networkfleet 3500 unit is connected to the car’s on-board computer as well as small antenna that is mounted on the inside of the windshield. This connects the vehicle with a server-based fleet management system that Coe can access from any web browser. It even sends text alerts to his cell phone, he says.
“One of my first customers with this product lives in Hawaii, but his vehicles are over here [in California] and he travels a lot,” Trevisan says. “He can watch his vehicles from any place in the world.”
“All we do is turn on a computer and log in,” Coe says. “Our dispatcher logs in, and it all pops up. It shows you a map, it shows you where every vehicle is at, it tells you if the vehicle is on or off, and it gives you a listing of virtually anything about that vehicle you’d want to check.”
Installation was quick and painless, according to Coe. “A guy from A&D came out an it literally took 15 minutes per van,” he says. “We had each person show up 30 minutes early and he knocked them all out before they started their morning rounds.”
In terms of cost, Trevisan estimates that, with installation and everything else, the system costs approximately $750 per vehicle. “Typically, we save the client that much money in two or three months,” he adds.Instant Savings
In terms of gas savings, the positive impact of the GPS fleet tracking system has been demonstrable, according to Coe. “We would average anywhere between 11 and 12 miles per gallon,” he says. “Since we’ve put these systems in, we’ve gone all the way up to 15 miles per gallon as our normal, which is a huge difference.”
The reasons the MPG has gone up are twofold, Coe says. First, with the tracking system, Abundant Homecare can govern how fast drivers can go. Right now that limit is 73 mph, which is an average freeway pace in the area. “We understand drivers are going to go faster than that when they’re passing and in situations like that, but they should not average more than 73 miles per hour,” he says.
Also, the system tracks idling, which clearly affects mileage, since a car idling gets zero miles to the gallon. “We want our idling to be a certain point so that guys don’t just sit in their vans, idling all day,” Coe says.
Secondly, now Abundant Homecare can ensure that its vehicles stay parked, when drivers driver their vehicles home. “Now, there’s no frivolous driving,” Coe says. “I get alerted if that van moves when a driver is off the clock. As soon as that van is turned on, you know it’s on; as soon as it has moved one inch, you know it’s moved.”
Nixing all that off-hours driving also reduces a massive liability risk for Abundant Homecare, Coe adds.
That goes hand-in-hand with another benefit of the GPS system, which is increased driver safety on the roads, Coe says. “We used to get at least two calls a week of complaints about drivers speeding or driving recklessly,” he explains. “Ever since we put this system in, we have received one call.”
That accountability also has benefits when it comes to liability and theft insurance costs. “The other component of this is that insurance companies typically endorse this, because you can have a safe driving policy, and enforce it,” Trevisan explains. “And if your vehicle gets lost or stolen, obviously you can find it.”
And because Abundant knows where its trucks are at all times, Coe says it has more flexibility in how it plans its routes, and changes those plans when unexpected delays or side trips crop up.Diagnostics on the Go
Because the GPS unit is tied into the vehicles computer control unit, it can deliver a wealth of data at the provider’s fingertips. For instance, Coe says the system runs a daily smog check so that Abundant Homecare no longer has to take its vehicles in for smog. Also, if a fleet vehicle is subject to a recall repair, it will instantly notify him to that fact.
“All the newer vehicles, from about 1996 onward have a diagnostic system that was mandated by the government,” A&D’s Trevisan explains. “Typically, when you take your vehicle into a dealership, they are going to charge you $70 to $80 just to read that. With this system, you can read it every day.”
“If there’s something wrong with the vehicle — if there’s an alert that says ‘check engine’ — it sends me a message letting me know there’s a particular van with a service light that just came on, and it also lets me know what the problem is,” Coe says. “So you can get on the phone, call the dealership, and they can let you know if it’s an easy fix or not. Then you can get the van in, get it fixed, and get it back on the road.”
The system has also reduced a good deal of recurring regular maintenance costs for Abundant Homecare, as well. “We used to get oil changes once every three weeks,” Coe says. “Sometimes we would get them every two and a half weeks. We’ve gone up to four or five weeks now.”
The system can even provide a unique accountability tool. For instance, the tracking system saved Abundant Home Care from possible litigation when a local care facility called the provider with a serious complaint.
“They were very upset and said that we had picked up about $8000 worth of medical equipment for one of the facility’s patients,” Coe explains. “From our A&D tracking system we were able to prove to them that our driver was nowhere in that area, except to pass within miles of it on the highway.
“It turns out that another company had come in and picked up the equipment — no paperwork and no questions asked,” he relates. “Our GPS system saved us a mess of trouble and even got us an apology."
This article originally appeared in the November 2008 issue of HME Business.