See how fast it's catching up? Seriously, even Bloom and Kay and their fellow software executives acknowledge that automation is making its way-albeit belatedly-into mainstream HME businesses.

"The HME industry has made great strides in automation since even last year," says Phil Cody, vice president of Dynamic Energy Systems, Plano, Texas.

Not that there is much choice. Fluid Medicare regulations, technologically advanced insurance companies and tougher accreditation requirements make the old pen-and-paper systems as useful as a "Perot for President" bumper sticker.

"A lot of private insurance companies won't even accept paper claims anymore," says Heather Benzi, sales and marketing manager of OmniSys Inc., Greenville, Texas. "If you want to stay in this industry, automation is the only way you can grow your business."

Automation is not brain surgery. Simply defined, it is the implementation of technology to replace human beings in routine or repetitive work. It doesn't mean the provider must become George Jetson or some molten cyborg. It does mean investing capital in a computer and software system that integrates data to better run a company.

Automation can handle order intake, electronic claims submission, inventory control, accounts receivable, billing, tracking certificates of medical necessity, rental tracking, deliveries, credit card processing, outcomes, payroll and telephone communication.

Bar-coding, introduced commercially in the 1970s, is finally taking hold in the health care sector, with hand-held devices in the field downloading data back to the server. Global positioning systems are guiding delivery trucks, as well as helping providers monitor work performance.

"I had one dealer who discovered his truck hadn't moved for three hours," says John Durkee of Orlando, Fla.-based HMEXchange. "It turns out the driver went home to mow his lawn. Technology can help keep track of everything, especially inventory. Fed Ex can tell me where my package is at any moment; how come a dealer doesn't know where his monitors are?"

The future for HME automation involves such concepts as electronic data interchange, where a purchase order is placed electronically with a manufacturer or distributor and drop-shipped to the user. Systems will be easier to use when voice recognition, where keyboard strokes are replaced by vocal commands, becomes commonplace.

And, of course, there is the omnipresent Internet.every one of these technologies is designed to, among other things, save time. They also are already widely utilized in many other industries. In the true definition of business automation, they allow a re-allocation of personnel to functions that must be handled by people. Meanwhile, machines tend to tedious duties. They eliminate paperwork, streamline operations and, theoretically, improve the bottom line.

"The motivation for automation is to be as efficient as possible," says Steve Knoll, president of Knoll Patient Supply, Topeka, Kan. "Attract the best people and keep them by providing them with the best tools. Invest in the training and give people the resources to serve the clients well. It doesn't take long to recoup the investment when your processing speed increases by 10 times."

Those aren't the words of a multinational corporate chief information officer. Knoll has one location, but he still sank $30,000 into hardware and software upgrades last year.

"At the end of the day, if a task that used to take three hours by hand takes 30 minutes through automation, you've increased productivity," Knoll says. "That pays for itself. But if you don't have the attitude to invest in the company and the people, you don't have the building blocks in place to grow and do the best you can to serve the client."

There seems to be a lot to that attitude part. Plenty of providers figure if it ain't broke, don't fix it-and continue fighting progress.

"I finally gave up on the home health care business," says Jack Baxter, whose Spring, Texas-based Advanced Sales Technologies now concentrates on providing automation advice to other industries. "No one in health care is willing to make the commitment. They simply are not informed, and it's going to take time to realize the importance of changing the way things are done. That's what automation does."

There is a minority view that the software companies have dropped the ball in their marketing.

"When companies like Fastrack showed how automated billing could improve a company's performance, the industry adopted it," says Durkee, whose company operates a provider-to-provider network and a site on the Internet's World Wide Web. "Nobody [else] has come forward to show that newer forms of technology save money and are easy to use. People in this industry are smart enough to jump on the bandwagon if you can identify the benefits.

"A lot of providers are not aware of what's out there, they're so caught up in the big picture," Durkee adds. "I get dealers who are shocked when I tell them they can e-mail files instead of faxing them. I just think a lot of them don't know what's available and how it can help them."

Other consultants and even some providers theorize that the HME industry is held back by unsophisticated managers who lack the education or simply cannot comprehend the advantages technology brings.

"If a tool does not help the provider actually fit a person for equipment, it has no value to them," says Bruce Allaire, marketing director for The Med Group, a provider network in Lubbock, Texas. "This comes from having a non-business background. As more people with business backgrounds enter the field, it's changing. Just maybe not fast enough."

Ted Wade, chief executive of Tropical Software Services, St. Petersburg, Fla., says it is not impossible to teach an old dog new tricks when it comes to HME automation.

"I've seen veterans change," Wade says. "Management needs a high level of awareness and to be adaptive to change. The new breed has it. Rookies have better training in using automation as a tool. Kids use computers as a tool from a very young age. But a lot of universities and technology schools train people in business automation. That's where a veteran should turn."

But that's assuming the veteran has the right attitude. Baxter says some HME owners are not patient enough to reap automation benefits. Other companies have such ambitious computer plans that price becomes prohibitive, while others are so preoccupied with saving money, they soon find their bargain system is not versatile enough to expand or is not even well-suited for the particular business.

"What I've got now isn't people who haven't automated, but people who are nursing outdated systems," says Jim Highsmith, a Griffin, Ga.-based owner of an HME company (US Health for Homecare) and an HME software company (Softcare).

"That's why the most important thing when you are first considering to automate is to know your company and know what you need. And make sure the operating system focuses on HME and is installed by somebody competent with HME systems.

"The most excited I've ever seen a customer," Highsmith adds, "was when I told one I can make the computer assimilate insurance claims and transmit electronically to the DMERC (Durable Medical Equipment Regional Carrier) at night from the service that day, unattended, without an operator in the building. The ones who get it, really get excited. A lot don't get it. They don't see the big deal."

Highsmith laughs when asked to theorize why the HME industry is so slow to change.

"I've got a plaque on my wall from the 1982 Medtrade show for the most innovative product," he says. "I showed up with a computer terminal and some software. Back in 1982, that was thought to be innovative. You could make the argument it still is."

Highsmith says his software identifies unpaid claims, controls inventory loss, compiles data in a customer profile much like a Rolodex, and documents customer satisfaction reports.

"If I have to convince you this is needed, it's like telling you in this day and age you need a car versus a horse," he says. "You'd have to be incompetent not to automate."

Ron Kieschnik, president and chief executive of Seating Profiles in Houston, is far from incompetent. He shopped for a system compatible with his customized rehab business, and ultimately decided to build his own. It has taken years and "tens of thousands" of dollars, but he not only has one he's happy with, he plans to eventually market it commercially.

"Although we have a custom business, it has standard functions," Kieschnik says. "In developing this software, it forced us to think logically and analytically. It walks us step-by-step through our business process. Each next step pops up on somebody's to-do list in the next department and moves through the system.

"It really isn't rocket science. It just brings efficiency into the process. Our business is unique and our need for automation is accelerated. If you don't have it, you die."

What does an automation system cost? Well, what does an automobile cost? Depends on the automobile.

An entry-level system runs maybe $5,000; top-of-the-line systems rise to $60,000 and more. Most satisfied customers wind up spending somewhere in the $30,000 range.

Does that seem like a lot of money?

"The financial industry spends 8 to 9 percent of revenues on technology," Kay says. "The health care industry spends about 2 percent. A CEO in the health care industry told me there's a lack of understanding how technology can make the business better. We believe if you educate the market, customers will buy it. A lot of people still see the computer as a necessary evil."

No telling what this industry thinks of the Internet, but as it has in so many businesses, the Internet

AUTOMATION makes life easier, but nobody ever said it was easy to automate.

Justin Blanchard, chief operating officer at Millennium Medical in San Juan Capistrano, Calif., spent $9,000 on a software system in 1993 that became obsolete when California changed to Region D DMERC the following year. He needed a new system, so he called Medicare and asked for a list of certified vendors.

"There were 150, and it took six months, but I called every one of them and had a list of questions to ask," Blanchard says. "Thirty percent of them were already out of business, which was pretty scary. The range in price was $300 to $30,000. I narrowed the choice down to three contenders based on price and features.

"Of the three, the low was $4,000, the high was $16,000, and I wound up paying $8,000 for Dynamic Energy Systems' software. I was about to sign a contract for the $16,000 program, but that day the salesman admitted it couldn't do what he had told me it could.

"What I like about the system I have is that the company actually listens to the customer and incorporates suggestions into upgrades."

Blanchard says that because of automation, his days sales outstanding is down to 42 days, compared to the industry average of more than 80 days.

"That's such a big advantage," he says. "I know that somewhere out there is a nice lady who's got a little system she does by hand and it works fine, and she won't let it go. But, someday, when she's gone, they're done, because nobody else will be able to run that system by hand."-K.G.

DAVID PFEIL, director of East Brunswick, N.J.- based Arrow Professional Enterprises, has 17 years of management experience in home health care automation. He offers these tips on the acquisition and implementation of a new automation system:

1. The Search:

* Review and rank your company's needs based on time and money spent for each process.

* Get help in the decision-making process.

* Negotiate all points of the contract before signing.

2. The Conversion:

* Detail all necessary conversion points before installation.

* Be prepared to run old and new systems concurrently to allow for the shakeout period.

* Reserve on-site vendor support time for transition and several additional months.

3. The Follow-up:

* Log all support calls and resolution.

* Select a company computer liaison with vendor.

* Designate one person per department to be responsible for software use.