How to Improve your Delivery Operations Management
- By David Kopf
- Jul 01, 2011
One of the major elements of HME business overhead is running delivery and repair fleets and their supporting operations. It is a staff-intensive, and involves continuing regular capital expenditure for fuel and repairs, as well as depreciatingassets — the vehicles — that need to be regularly replaced.
Moreover, the practice of managing deliveries and planning routes consumes a good amount of staff time, which also means more overhead.
No matter how you slice it, managing deliveries is expensive. Some more costs to consider:
- The cost of drivers and dispatch staff.
- The cost of the vehicles and their maintenance.
- Fuel costs, which are once again skyrocketing.
- The cost of the inventory stored in the trucks.
- The additional insurance, registration and other costs required with owning and operating a vehicle fleet.
And that’s not a good thing in today’s funding environment, where providers are facing declining reimbursement due to the oxygen rental cap, Rounds One and Two of competitive bidding, and the removal of the first month purchase option, as well as having past and future claims hung up in limbo due to CMS’s stepping up of pre- and post-payment audits. When funding is in as big a decline as it is today, the overhead of delivery management looms large.
Needless to say, providers need to get out from under that shadow. They must find ways that they can increase efficiency for their delivery operations and drive cost from this important, yet costly segment of their businesses. Fortunately, there are a couple key technologicalsolutions at hand that can help HMEs super tune their costly delivery systems.
Route planning. An essential element in overhauling delivery management is leveraging route planning systems. Rather than dispatch manually taking all of the next days and wracking their brains over how to properly distribute them to each of the drivers for the next day’s routes, software can completely automate the process.
Moreover, while dispatch still needs to make room in each driver’s schedule and route to not only ensure they can maintain efficiency and adequate service levels, but they must also have the fl exibility to respond to unique or urgent calls that invariable arise during the day.
Fortunately there are various systems specifically designed to take a provider’s list of orders and automatically generate efficient routes and apportion them to each driver. Dispatch can generate the following days’ deliveries each evening, and in the morning, when the drivers come in, they are handed their pre-planned delivery routes and tickets for the day and set out on their rounds.
Better yet, many HME software systems already incorporate route planning as a feature, or as an additional module. If you have an HME software system in place, examine whether or not it offers that capability.
GPS. Outfitting delivery vehicles with global positioning satellite technology is another important element in maximizing delivery efficiency. GPS systems lets providers track their vehicles while they are out in the field.
The way it works is simple: A GPS device is installed in the vehicle, or a GPS-enabled smart phone or a GPS tracking device is either carried with the driver or installed in the vehicle. These units are then tracked by the GPS system’s company, and the HME business logs into that company’s system to see their vehicles and track where they are and what their next appointment is.
But the systems allow HMEs to drill down even deeper. With them, the provider can see a variety of information about each vehicle, such as how long drivers are taking at their stops, or the vehicles current and average speed. This can be particularly important when it comes to maintaining mileage lies in ensuring driver’s stick to optimal highway speeds.
GPS systems that are connected to the vehicle give the most accurate picture about that vehicle’s status and sometimes even diagnostic information on the vehicle as they are constantly on and connected to the vehicle, in comparison to a portable or phone-based device, which travels with the staff member, rather than the truck or car. That said, portable GPS devices and phone-based GPS have their applications, as well. For instance, an HME can use those devices to accurately reimburse traveling staff that don’t do delivery, such as therapists, for their mileage.
A couple key implementation issues to consider when putting route planning and GPS tracking into place is what kinds of systems you are going to use. As mentioned, there are options: off-the-shelve GPS tracking systems; GPS systems that are designed specifically for HMEs; a separate route-planning system that can be integrated with the HME software infrastructure; a route planning system that is already offered by the HME’s software vendor.
Also, it will be important to consider the staff. While there is minimal training involved in learning how to use the systems, there could be some “cultural” acclimation required. Focus on the benefits they will bring.
Points to Remember:
- Delivery management represents a massive amount of overhead for HME providers.
- In today’s era of declining Medicare reimbursement, it is critical to cut that overhead.
- Route planning is a key tool in driving cost from delivery operations. So is GPS tracking.
- So is GPS tracking.
Here are some delivery management technology tools worth reviewing:
This article originally appeared in the July 2011 issue of HME Business.
David Kopf is the Executive Editor of HME Business and DME Pharmacy magazine. Follow him on Twitter at @postacutenews.