Estimated Mileage May Be Costing Your Agency More Than You Think
Posted On: July 22nd, 2014
Former Vice President, Product Marketing and Strategy, McKesson (Retired)
At Carroll Home Care and Carroll Hospice, management is well-versed in Lean Six Sigma. As a result, they don’t make any major changes unless they know (1) exactly what the goal is and (2) how to measure success. That’s why they can say with complete confidence that their shift from paper-based mileage tracking to automated mileage tracking software using McKesson Homecare™ Mileage Advisor was an unqualified success. For one thing, it helped save the agency $37,500 the first year.
The agency was tasked in 2010 with cutting $25,000 from the budget. The management team examined many potential areas for cost savings and discarded most of them as not providing enough financial impact.
When they mapped out the process for mileage tracking and saw the number of manual processes and the enormous potential for error, they recognized it as a target for eliminating waste and streamlining processes. They knew they needed to keep the project contained, focusing only on mileage and not straying into scheduling or service-area issues.
They began the project by outlining the steps of everyone involved in the process: nurses track and submit their mileage, managers approve the totals, data is entered into the payroll system, etc. The team then held a brainstorming session on ways to improve the process. Ideas included submitting mileage weekly rather than daily (unlikely to solve the main issues), cellphone GPS tracking (cost and Big Brother issues), GPS trackers on personal vehicles (cost and Big Brother issues), fleet cars (overall complexity and insurance issues) and using McKesson Homecare Mileage Advisor.
To calculate the potential savings from Mileage Advisor, McKesson worked with the agency to evaluate a week’s worth of its visits. When compared to the mileage staff reported for the week, the reported mileage was higher than Mileage Advisor’s calculation. The agency recognized an opportunity.
Today, instead of tracking miles on paper to be later entered into a spreadsheet, the agency runs Mileage Advisor on the visit information that nurses and aides have entered into McKesson Homecare™. The mileage tracking software system uses GPS coordinates for patient addresses to calculate miles traveled. That data is transferred directly into the payroll system, helping to reduce the need for manual entry. By comparing miles tracked manually to those calculated by Mileage Advisor, Carroll found that some of the agency’s RNs were so focused on clinical matters that they forgot to mark down their odometer readings and simply guessed at their mileage. Unfortunately, they often overestimated the miles traveled.
In addition to eliminating half of an FTE (data entry), the switch to Mileage Advisor helped net Carroll $20,000 in savings from mileage overpayment. In 2011, the agency expanded its service area and completed 2.5% more visits than the previous year with a mere .05% mileage increase over prior years. The saved FTE was not replaced, and after initial adjustments to the system (e.g., setting up a process to accommodate major road detours), no ongoing discussions about mileage have occurred in the agency.
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