Transportation can be a huge expense for any HME provider. It's no wonder many are turning to various fleet management systems to help manage the cost. These systems use signals from global positioning satellites (GPS) to track vehicle locations in real time and to build a useful management database for documenting and analyzing transportation costs.
“These technologies are the only way to be competitive as an HME provider,” says Chris Gray, health care segment manager, Sprint, who works with several supplier partners to provide GPS-based systems. “You need these kinds of tools, and I believe adoption of these technologies will grow substantially in the next two or three years.”
Fleet management systems can both track vehicles on maps in real time and provide a history of each vehicle's activities in the form of management reports. Whether a system uses a GPS location signal from a driver's cell phone or gets a signal from a separate “black box” installed on the vehicle, the efficiency benefits and cost-savings can be huge. Using these systems, providers can enjoy better productivity, make strategic routing decisions, improve customer service (by being more responsive), eliminate expensive idling time — and have the overall peace of mind of knowing where a company vehicle and/or employee are at any time.
“Margins are being squeezed, so you want to keep workers efficient,” says Gray.
Plenty of Choices
Sprint and its various GPS partners and system suppliers offer a portfolio of applications that use the Sprint voice and data network. For example, the Comet Tracker system by Actsoft provides a mobile management solution with remote data collection capability and location verification. The Comet Tracker GPS capability allows providers to view the location, direction, speed and stop durations of vehicles. Using a bar-code scanner connected to the cell phone can add an inventory-tracking component.
Sprint also works with Xora to offer the Xora GPS TimeTrack, which allows employees to clock in and out of their shifts with the click of a button on the cell phone. It enables the office staff to track where field staff is located at any point in time to better determine how additional jobs should be routed during the day.
Sprint offers NextMail Locator to enable delivery techs to verify a delivery automatically with a file and date stamp, a GPS-based verification of a delivery location and to forward a cell phone picture of a delivery site to keep on file. NextMail also prioritizes inbound messages from the field, queues up push-to-talk calls and eliminates wait times for field employees.
Another Sprint option is the TeleNav GPS Navigator, which enables a cell phone to act as a GPS navigation device.
“A lot of times, the impetus to purchase a system is related to one component, such as mileage or payroll or tracking employees,” notes Gray. “Often a company will look to go from being a casual user related to one measurement to leveraging the full capabilities of a system to provide greater accountability. It's more difficult to embark on a [broad-based approach] than solving a single problem. You have to work internally to get that agenda accomplished.”
Gray says his customers are seeing a 5 to 15 percent reduction in expenses, whether mileage or payroll, and he predicts more HME companies will adopt such workforce/fleet management applications after the “dust settles” from competitive bidding.
How To Get There From Here
Route optimization is the primary focus of the UPS Roadnet Anywhere software system from UPS Logistics Technologies, according to Sabrina S. Mosley, product manager, and the HME/DME market makes up about 35 percent of the system's customer base. Roadnet Anywhere enables users to dispatch orders dynamically throughout the day, and the GPS tracking component uses either the Sprint or AT&T network.
Mosley says the ability to optimize routes automatically and to accommodate dynamic changes sets the UPS product apart.
“Taking the time to route manually is a very time-consuming process — to consider the [route] options, the patient impact, the cost impact. A lot of people get stuck in a rut of doing what they have always done. With the times we are in right now, providers need to look for ways to cut back on their costs without compromising the customer service that sets them apart.”
UPS Roadnet Anywhere is a Web-based system that requires no additional investment in IT infrastructure. The next version of the software, to be released around March, will integrate Google maps. In addition to the current “standard” version for use with routes that are the same every day and the “dynamic” version that can accommodate ever-changing routes, a third “hybrid” option will be introduced. The “zone mapping” option will bridge the gap, enabling users to create geographic zones and route dynamically within each zone.
Fleet management tools also fit into a broader transportation industry effort to be greener, says Mosley.
Advantages of Real-Time Mapping
For six years, VGM Technologies, a division of VGM Group, has been providing its members with a fleet management system that uses GPS signals along with transmitters installed on a company's delivery vehicles and an Internet-based interface, says Rhonda McCumber, account executive.
The FleetTraks system from On-Board Communications uses a small black box hard-wired under the vehicle dash to send GPS location signals across the AT&T network to On-Board's office in Dallas, where a Web-based computerized tracking system provides real-time mapping information over the Internet to HME suppliers. Installation of the black box is simple and training is available, or they providers can take their vans to an automotive dealer for installation.
About 300 VGM members are currently using the service. Merideth McDonald, vice president of VGM Technologies, estimates about half of the group's members use some type of fleet management system.
An advantage of the FleetTraks system from VGM is that it is specific to the HME industry, says McCumber: “It's cut-and-dried. What you pay for is everything you will use.” System reports are tailored to specific issues HME providers face, she points out.
“We have had members who lost vans and had to find them. In one case, a driver quit on Friday and left the van parked somewhere around town. By midday on Monday they had at least found the van,” says McCumber.
The FleetTraks system provides knowledge in real time of everything a van does every day. “If they have a map open, they can actually see the truck going down the road when the frame refreshes every five minutes,” McCumber says. The system also shows direction, speed, time and date. Providers also use the system to monitor vehicle speed for efficiency and to track fuel costs.
A memory card in the black box stores signals if a vehicle travels outside of the cellular coverage area and then forwards the data when the vehicle comes back into range. Storage in the central database enables providers to go back three or six months to confirm a delivery, to see how many patients were served in a specific time period or to track other trends.
Some VGM members have invested in large-screen monitors in their offices to enable warehouse and customer service reps to see real-time routing information. A late-day delivery can be efficiently added to a driver's route if he or she is near the new delivery site. The drivers also get smarter and more effective in planning their routes, and the leftover time can be used, for example, to replace returned equipment into stock at the end of the day.
Overall, VGM has seen companies save about 30 percent in overtime, or about $300 per driver per month. The system can also be used to monitor excess idling time, which wastes up to a gallon of gas for every hour spent idling, not to mention the potential impact on air pollution.
The system also facilitates management of drivers. Personal goals can be set for each driver and the company as a whole, and management can trace progress versus their goals. For example, the threshold for a stop could be set for 20 minutes, and management would be notified when a driver exceeds that time.
McDonald also emphasizes the need for a system that offers strong management reports. Such systems enable managers to look back at up to a year of data. “This is the type of service you need for your business,” says McDonald. “The vehicles and personnel time are two of the biggest expenses. To be able to monitor them in a minute-by-minute perspective is huge.”
Benefits of Fleet Management
Installing a fleet management system on HME vehicles can provide a recognizable payback: Lower fuel costs, better delivery efficiency and driver overtime cost-savings can offset the investment. Several providers using the FleetTraks system who spoke on a panel at Medtrade in Atlanta estimated a 90-day return on their investment.
“I was a little concerned with the cost at the beginning, but I put it on all the vehicles and saved $2,000 in the first month on gas,” said Dennis Bartos, president of South Texas Medical Supply, San Antonio, Texas, which operates seven locations and a fleet of 21 vehicles.
Beyond the economics, panel members said use of a fleet management system could be an eye-opening experience.
“There are so many things you don't want to know,” said Thomas Sedlak, senior vice president of facility and business development, Vantage Healthcare Network, Meadville, Pa.
Or maybe you do: “For example, we give our drivers gasoline cards. One of our drivers used about 30 percent more fuel in the same vehicle, and we found out he was filling up his personal vehicles with our gas card,” Sedlak said. “You see every purchase they made at every station. With this system, you can see if a vehicle was supposedly being filled up when it was in our parking lot. One driver took a vehicle on the weekend to help someone move.”
“With a fleet of 20 vehicles, trying to figure out which one needs an oil change or the tires rotated was a big deal for us,” said Curtis Spencer, director of CareSource, Broken Arrow, Okla. “As your fleet gets a little older, you have to nail that routine maintenance. The fleet management system just pops out an email whenever one of the vans needs an oil change. It's that simple and that detailed.”
“We use it as a process improvement program,” explained Todd Tyson, president of Hi-Tech Healthcare, Norcross, Ga. “We brought the drivers in and said, ‘We want to streamline and save some money.’ Let them look at the numbers and let them know it is a tool to help streamline the business. The biggest thing is to bring them in. Let them see it is something they can benefit from [related to safety] as well as the company.”
And it's a good idea to lay the groundwork for dealing with non-compliant drivers when you install the system, Sedlak added. “You have to have a policy with human resources, and we had to create a policy and have them sign it,” he said. “You have to do it before you take serious disciplinary action. Drivers should understand there are consequences.”
“I guarantee if you put this system in, you will lose a driver or two,” Spencer said. “It is a fact. When you look at it, you will be flabbergasted. The one you think is your best guy might turn out to be, for lack of a better word, your biggest thief.”
“If a guy is borderline, it will make him tow the line,” he added.
- Read the "OxygenOne Gets a Breath of Fresh Productivity" sidebar to learn how one HME provider benefited from delivery optimization software.
OxygenOne Gets a Breath of Fresh Productivity
OxygenOne, Waukesha, Wis., is a respiratory-only supplier with 30 employees that provides oxygen, CPAP and nebulizers using a fleet of four vehicles. The company uses UPS' Roadnet Anywhere to optimize its delivery routes in southeastern Wisconsin while accommodating last-minute changes and preserving the all-important customer service aspect of its business.
"When you are dealing with oxygen, the human component cannot be measured and put into a [transportation] program as easily," says Rebecca Olson, director of clinical and diagnostic services for OxygenOne. "An oxygen setup doesn't take 20 minutes, it takes an hour-and-a-half. We don't have 15 to 20 stops a day; we have eight to 10 oxygen stops a day, and installs can come up unexpectedly. We were looking to save money without compromising service."
OxygenOne previously designed its routes manually. When first deciding to adopt the UPS system, Olson compared the costs of delivery using manually created routes against using the routes that were optimized using Roadnet Anywhere. "It came out to be about $440 per week savings in the overall costs of delivery, including the technicians' hourly wages and the cost of operating the vehicles."
The system measures multiple criteria when determining routes, and takes the lower cost option when comparing the cost of mileage versus the cost of extra time (wages). "Basically, as humans creating the routes manually, we didn't take into account the best way to get there," says Olson.
For instance, the system could analyze whether it would be best to take a straight north-south route or a northwest route that is farther but has a higher speed limit, taking into account the employee's time, the speed limit and vehicle mileage. The system also provides real-time information about driver location.
The system is integrated with OxygenOne's billing system. Every day at 3 p.m., orders for the next day are automatically fed into the system, which creates the routes while considering variables such as whether a certain driver might be working a half-day. Printing out the manifest provides a record of the patient's location and directions, what they need and when the driver should arrive and leave. The customer service department can also add in specific instructions such as "Go to the back door."
The system also enables tracking of all deliveries related to regulatory/security issues. Because oxygen is a hazardous material, the provider must be able to document for the Department of Transportation and the Food and Drug Administration how much oxygen left the building, how much was delivered and how much was returned after the route.
"The system has increased our productivity, and not just in the field," says Olson. "We can notice under the exception report that a guy didn't leave the office for deliveries until 10:30 a.m. [instead of 9 a.m.] It helps us hold employees accountable for their own productivity and shows them when their time is being wasted."
"The system allowed us to differentiate whether we are dealing with an employee issue or a department issue," says Olson.
"We went into this for route optimization, but every time I turn around I find another benefit," she adds. "The system tells me that today's routes will cost $500. Today at the end of the day, I will have an estimate of how much tomorrow's routes will cost, and I can compare the actual costs against the estimates. There are other things going on, too, such as increased productivity, the ability to manage employees, less paperwork. I can't measure how much I am saving."
