Navigating Budgets with Better Data

December 6, 2017

With budget season in full effect for next year, I wanted to reflect on a recent business review we had with a client and how our data was critical in gaining insight to DME rental habits within a specific market.


We were preparing a business review for Q3 and 2018. We were working in the hospice field of long term care and focusing on best practices for a particular region of a client. In the hospice realm unlike skilled nursing, typical DME contracts have in-formula items, or items that can be ordered as many times as needed while still only being charged a particular amount. Then there are items outside of that formula called (wait for it...) out-of-formula items, original I know. 


While working on the review we noticed an odd trend of an item that was out-of-formula rented over and over again. Red flags came flying out and we got to work. Why were these items being rented and for so long? What's more odd was the fact these items had never hit our top 10 spend report, not to mention any dashboard report to date. It would make sense that this item was out-of-formula because of this. More often than not items in-formula are consistent rentals that both DME and operator agree on.


After some research into the data we pinned the trend to a particular market. We pulled up the reports for the individual locations and began reviewing the data for the previous 120 days to see where this trend started and why. We wanted to better understand why this item was being rented in the first place. Our gut was a higher acuity population. We finalized the business review and headed to see the client and present the findings.



Certain markets are dictated by unseen forces. Navigating those waters means success both in that market and at the communities or sites.



When we got there, we went over the data and information, digging into the specific item that was out-of-formula. The client confirmed that in this particular market where the item was renting they partnered with a higher than normal percentage of assisted livings which accounted for the higher acuity population. The assisted livings were adamant about this particular item being utilized in their homes.


Eureka! Everything clicked and a few plans were set in motion to capture the item. Through our data we were able to identify underlying issues and then translate that to a particular market preference.


Capturing costs within formulas is very important but even more important is having the data to see what sets markets apart and pivot to ensure those unusual item(s) are included.





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