Ensure survival through change

Tuesday, March 16, 2010

It's old news now that complex rehab companies are under the gun. For example, while they received an exemption from national competitive bidding, they also got hit with a 9.5% Medicare reduction effective Jan. 1, 2009. Unfortunately, there is neither a silver bullet nor a great business secret that can be used to solve the challenges stemming from reimbursement reductions. Companies have been forced to look at a variety of changes to ensure survival.

Here are some things companies have done or are planning to do:

Improve your revenue line

Granted, this is easier said than done, but it's key. Look at the current customer base and identify items that they can use. Wheelchair seat and back cushions and other mobility accessories are examples of products that may hold potential. New offerings like wheelchair ramps and other accessibility products should also be explored. Improving the revenue line also means saying no to "bad" business when funding is not sufficient on an individual or contractual basis.

Re-evaluate yourpolicies, services

Unfortunately, in these days of reduced funding, companies are finding they cannot continue to provide the depth of service and convenience they once could. Things like the variety of products available; the availability of loaner equipment; the timeliness and availability of repairs; and the company's general response time are being negatively impacted due to the need to reduce expenses.

implement smartpurchasing practices

With product costs being the single biggest expense line, good purchasing practices are critical. Unfortunately, the good old days where a company could offer a wide array of products are gone. Companies are employing "best pick" lists to offer their customers a narrow selection of products that meet their functional and mechanical needs. Companies are also consolidating purchases with fewer vendors to cut down on transaction costs and leverage their purchasing volume.

Only keep the right people

Good employees are the backbone of the business and there is no room for slackers. Companies are looking to maximize productivity with the right hiring, training and systems. Only motivated and dedicated employees are welcome. When reviewing staff and evaluating the keepers, the old adage, "It's not the people you fire that hurt you, it's the ones you don't," needs to be kept in mind.

Leverage technologyto maximize your productivity

No secrets here. In spite of reduced funding, companies are investing in technology that can increase productivity. Tools that are becoming standard include global positioning systems, document imaging systems and automated insurance verification systems. While they do add additional costs, when implemented properly, they increase staff productivity and effectiveness.

Take a close lookat your repair department

This is known as the last frontier. A good repair department is a key component of a successful complex rehab business, but it is typically the least measured. Good business practices include, at a minimum, basic productivity reports for each repair technician and monthly department profitability reports. Companies are establishing strict policies on the repair customers they can serve and those they can't. They're also looking to do more work on-site rather than in the home.

Integrate advocacy intoyour business activities

We could devote a whole column to this topic. The funding challenges faced in complex rehab are not going away. Each company needs to be in tune and involved with the key issues. If you're a complex rehab provider, groups like NCART need you and I would suggest you need them. They're here to promote and protect adequate access to your products and services on a federal and state level.

Of course, the key question is will we be able to get the 9.5% cut repealed? We are trying. But while we continue to pursue that objective, many complex rehab companies are exploring the above areas to keep their doors open and continue to provide a basic level of products and services to the people with disabilities in their communities.

Don Clayback is the executive director at NCART. He can be reached at dclayback@ncart.us.