The HME Crystal Ball
A new software tool offers providers a way to predict how they will perform in various business scenarios.
- By David Kopf
- Apr 04, 2013
Business intelligence you can use predictively: this is the quest of any business, but perhaps no industry more than the home medical equipment industry needs business intelligence. This is especially true in the era of competitive bidding.
Providers must consider a number of scenarios, and how their business could perform under those scenarios. What would happen if they increased their cash revenue 10 percent and decreased their Medicare funding by 20 percent? How could they pull it off? What would it do to their operations costs? What would it do to their profitability? There are a multiplicity of questions for a multiplicity of possible outcomes that need answers.
Enter business analytics. Business analytics has been around as a subset of business intelligence in the information technology industry for roughly five to 10 years, and over that time has gained some best practices in other industries that are now making their way to the HME industry, explains Gregg Timmons, president and CEO of MedAct Software.
Business analytics differs from traditional dashboarding tools and reporting tools offered by business management systems in that it lets providers truly analyze how their businesses could perform under different circumstances and scenarios.
“We think that there is a real need to have these analytics tools available at the time when providers are getting competitive bid amounts, because they’ll need to determine whether or not they can work with one of these contracts,” Timmons says.
However, typical business analytics systems are usually the domain of banks and large enterprises that hasn’t necessarily “trickled down” to HME. This is why MedAct unveiled its Business Manager solution last month. The Business Manager provides HME business owners and operators with a Software as a Service-based tools that give providers predictive analytics over aggregate data from multiple sources, including a provider’s existing MedAct database and QuickBooks.
This provides HMEs with a comprehensive overview of their business performance. The tool lets a provider accomplish various things, such as workflow visualization to identify bottlenecks and inefficiencies; performance forecasting; scenario planning to prepare for market changes; and analytics to strengthen cash flow.
Speed Is Key
The key is that providers need a predictive forecasting tool that lets them rapidly respond to new opportunities. Say a private payor insurance company offers a provider a new contract for various product categories at various reimbursement rates. That insurance carrier isn’t going to wait forever while the provider wades through excel spreadsheets to determine if it can carry the business. It needs to act fast.
That’s where their existing tools might not be enough. Dashboards and reporting tools show a provider how their business is currently performing based on its current processes. Business analytics tools let them see how their business would perform under different circumstances, Timmons summarizes.
To accomplish that business forecasting under different circumstances, MedAct’s Business Manager can tap into more than one data source to help make those projections. It also gives managers of provider businesses more flexibility in the sorts of datapoints they want to examine and how they want to examine them.
“You need to be able to run your numbers very quickly, and do some scenario planning, based on those numbers, and determine if this is going to be profitable,” Timmons explains. “To do that, you need to have some sort of modeling capability. That’s where business analytics tools come in.”
MedAct Business Manager
This article originally appeared in the April 2012 issue of HME Business.
David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.