For financial health, don't neglect business side of operations

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Monday, April 24, 2017

By the time David Franklin is brought on as a consultant, the company in question is often in dire need of a turnaround, he says. That’s because “home infusion providers often make the mistake of treating the business side of things as an afterthought,” says the president of Ray, Mich.-based Advanced Care Consulting Services, a national health services consulting firm.

Fortunately, Franklin is once again bringing his expertise to the National Home Infusion Association’s annual conference. “The Business of Infusion: Reimbursement and Beyond!” is a half-day pre-conference session in which he shares strategies for success.

HME News: What is the biggest problem you see when working with home infusion providers?

David Franklin: Reimbursement in general. We have lots of business, we have great clinicals, we provide great care and we can’t get paid. You need to have a really, really good intake and revenue qualification process. There are four sources of payment: government, insurance, the patient or the company. That fourth one is very dangerous. For all of the things that a provider does, he has to be paid so knowing before you ever send any product out there, what combination of those four payment sources is going to pay for everything is critical.

HME: What key performance indicators can a provider use to ensure they are on track?

Franklin: It’s important to look at several different indicators. Profit margin is a huge one and what is the margin? I like to break down expenses categorically: what percent of my revenue went to cost of goods sold, what percent of my revenue went to labor, what percent went to everything else. Knowing that and what those standards should be is critical.

HME: Do you think home infusion providers are doing a good job of embracing technology to streamline business processes?

Franklin: There are a few that are on the leading edge, but most still operate circa 1989. I think a lot are just run by clinicians who are really careful to stay on top of what the new drugs are, but they don’t focus on the business side.