Observation Deck

Resupply Redefined

A more strategic, automated approach to resupply for sleep therapy patients leads to better patient care and outcomes.

AT VGM’s Heartland Conference in June, there was a great deal of conversation around patient resupply. Some people said it’s a no-win endeavor, that reimbursement cuts and competitive bidding have killed it as a viable, profitable business. HME providers remain committed to providing great patient care, but many are numb to the growth opportunities. Providers can be successful by properly managing their resupply program.

I spoke with a provider who gets over 30 inquiries daily on his website from unhappy or dissatisfied resupply patients. When he talks with them, he learns they are "running" from providers who call them just once or twice, or only use a dysfunctional IVR or ordering system. The providers set up the patient, give them their paperwork and expect them to follow up for more supplies.

It’s amazing that many providers think their resupply programs are "good enough" when they struggle to sustain patient growth and retention. For example, a provider with a $3M resupply business and steady revenue growth of $25,000 per month, might say, "I have recurring revenue with a reliable 10 percent growth rate and I know my patients are being cared for." The reality is: If that provider does 350 new CPAP setups a month but doesn’t see the value in keeping patients compliant and continuing to order resupplies, all they are doing is "churning and turning." Keeping 75 percent of those patients compliant and ordering resupplies could mean as much as $1M in new revenue to this provider’s program annually – that’s more than three times the previous growth rate! Plus, more patients are getting better care.

Most providers are busy setting up new patients and lose them within a year. They also lose existing patients. The constant cycle of patients changing providers, and their new providers spending time and money setting up accounts for resupply orders, leads to patient dissatisfaction and non-compliance. It also leads to providers not getting reimbursed.

The result of all this churn is unhappy patients and providers looking for answers.

"Patients move away, quit therapy, change insurances, or are possibly forced to another provider. To help patients become compliant, we invest so much time and money up front that at some point there is no ROI. It’s just a fruitless effort," said Brian Desmarais of Home Care Specialists, as part of our recent customer survey/report, The State of CPAP Patient Resupply for HME Providers. If you invest so much to get patients into compliance, also invest in retaining them.

The ideal situation is patients get their supplies quickly and easily, resulting in a better quality of life, increasing retention and recurring provider revenue. Unfortunately, this is not the norm. I read a study that said just 44 percent of HMEs actively monitor patients for compliance after 90 days of setup. Plus, it’s difficult to re-acquire a client when they leave a resupply program.

Many Obstacles in the CPAP Resupply Business

Providers don’t have the time, money, resources or know-how to improve their situation. They place great value in having a solution that helps manage their business and patient relationships, according to our survey. We found 83 percent of providers place significant value on an automated patient contact system in their resupply business. The results also show that additional business tools – including technology that enables automated eligibility, supply ordering, drop shipping to patients – enable them to proactively reach their patients regarding eligible products, to drive reimbursable revenue and improve patient care.

HMEs and technology providers think that an automated resupply program will solve their big resupply issues. It can, by dispensing orders that are the right size and at the right frequency, to maximize patient care and profits. But the new world of resupply, call it "Resupply 2.0," is about the patient experience, which requires looking at each provider’s situation, and asking:

  1. Do my patients feel "in touch" with me?
  2. Do they feel like I understand their condition?
  3. Do I know how to work with their payers and manage their deductibles and co-pays?
  4. Do I monitor and collaborate with usage of their machines and genuinely work for them to get the maximum result from their therapy?

Driving Improvement Via Technology, Data & Outsourcing

To improve patient contact management, plus scale and serve the onboarding of new patients, providers must optimize technology, have better access to and use of data, and outsource repetitive components of their programs, such as purchasing, intake, collections, resupply and the actual patient contact. Email and IVR technology can "automatically" reach many patients, but you must supplement these contact modalities with live contact. Some age groups and demographics cannot and will not use these automated technologies. Providers must be prepared to service 30 percent to 70 percent of the patient community with live patient contact.

Many providers don’t have enough staff to provide great customer service to all patients, particularly on evenings and weekends, the optimal time to reach some patients. Our survey found nearly half of providers don’t have enough staff or time to contact non-compliant patients. Even for providers who have time, it’s difficult to reach the patients. Positive patient interaction makes the difference in retaining them for their complete lifecycle as a CPAP user.

The "patient focus" is why nearly half of providers of sleep therapy equipment implement or research the outsourcing of live calling to provide the best patient experience, ensure ongoing retention and maximize profitability. Using a third-party service to handle orders can significantly reduce the operational burden for providers, and expedite delivery to patients. They also provide education to inform patients about their CPAP therapy and supplies. Some providers think third-party services are too costly, but these costs are offset by the increased resupply revenue, savings from greater efficiency, productivity and patient care.

All that information is tied into a provider’s data. The key is how to use that data to achieve best practices. Technology tools like dashboards can help monitor patient data and provide enhanced visibility into the resupply program. They can help manage order fulfillment, collections patient compliance, and your outreach program to match patient preferences and payer rules.

The bottom line is our new world of "Resupply 2.0" has focused on the customer experience. Providers need to quickly adapt and upgrade their programs to these new approaches. Providers that adopt these new approaches will have their patients, referral sources and stockholders thanking them!

This article originally appeared in the October 2017 issue of HME Business.

About the Author

Gary Long is the chief business development officer at Brightree LLC (Atlanta, Ga.; brightree.com), which produces billing and management software for HME providers and other post-acute care businesses.

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