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Ankota: Ushering in the Next Generation of Homecare Blog

What Can Home Health Care & HME's Learn From Netflix?

Posted by Will Hicklen on Nov 29, 2010 8:49:00 AM

Lessons from Netflix's success are applicable to the post acute care services market, including Home Health Care, HME, Infusion and more. This post is a little long, but worth it!

Imagine a market with several dominant providers already in place. There is seemingly little you can do to differentiate your service. Prices seem to be fixed already and those who pay for it are demanding that the service get cheaper. Costs are increasing and every indication is that margins will continue to erode. Experts believe that many providers in this market will go out of business soon.  netflix competitor logos

Sound familiar? Well, that might also describe Home Care, but that’s the market that Netflix CEO Reed Hastings chose to enter. That was the movie rental business a decade or so ago and it has only gotten worse. Home Healthcare, HME (or DME) providers, Infusion Nursing companies, and even Private Duty Home Care agencies face similar circumstances today. We’ll discuss the Netflix case below, and then offer a few steps you can take to improve profitability today and better position your business for tomorrow.

Netflix CEO Hastings and Lessons for Home Care

 

If you’re not aware, Hastings took a vulnerable business—movie rentals—and made it a spectacular one for his company, Netflix. Despite the pummeling most people expected the company would suffer from the likes of Blockbuster, WalMart (WMT), Amazon (AMZN) and Apple (AAPL), Netflix has thrived and its stock has outperformed even Apple’s. Not only has Netflix been successful in a tired old business while the leader—Blockbuster—went bankrupt, but it has redefined the movie distribution business.

Conventional thinking said that Blockbuster and WalMart already had the customer base, distribution model (stores) and deep pockets, and that Netflix would be doomed from the start. Apple and Amazon already had leading online brands, but no one expected that would take much movie business from the giants any time soon. Moreover, when Netflix was getting started, only about 7% of US households had broadband connections. The belief was that movie rentals was a hardware business (physical tapes you pick up at the store), and the idea of streaming video was impractical, too expensive, and too far off.

Of course, cable TV providers are also in the movie rental business. Time Warner (TWC) piloted streaming movies through set top boxes as early as 1995 (for $25 each), and Comcast (CMCSA) offers rentals through Comcast OnDemand (for about $5-$8 each). My experience with Comcast OnDemand is that it suffers reliability and quality issues, movie selections are limited, and rentals are tremendously expensive compared to Netflix. It is also limited to my TV, whereas Netflix serves through any device with an internet connection, including my iPhone and my TV, all for a fixed monthly price of about $9. And they will still send me DVDs when they cannot offer the selection I want in a streaming format, at no additional charge.

Netflix began by offering DVD rentals through the mail, fully expecting that customers would ultimately prefer to view instantly. They approached it in a unique way with a highly efficient (low cost) distribution model and exceptional customer service, quickly earning market share as a result. Hastings set out, in effect, to build a DVD movie rental business and then cannibalize it with a competing service.  Fast forward a dozen or so steps (many of which are highlighted in this Fortune article), including multiple attempts at Netflix-branded set top boxes and failed streaming services. The advent of YouTube was an inflection point that demonstrated that it was indeed practical to stream video on demand in high quality.

I’ll spare you the details beyond that but offer this: Netflix approached the market differently. Rather than trying to operate a business with the same entrenched business model (a la Blockbuster), Hastings chose instead to establish a vision for where the market needed to be and then built a plan to get there. The DVD rental business was merely a step along the path towards dominating the video on demand market. They employed various business models to get there and partnered with others along the way to get them there faster and support the large scale they required.

Most of the readers of this blog provide services or deliver products to support post acute care models. Your business is faced with market conditions that are similar to those Netflix faced:

Downward pressure on revenue: Regulatory reform, payers reducing reimbursements 

Rising costs: Expenses such as labor, energy (especially fuel), equipment, and supplies threaten profitability 

Established, inefficient business models: An industry with entrenched habits and delivery models, and legal obstacles 

Additionally, shortages in labor loom large as an aging population and broadened Medicare and Medicaid eligibility threaten to overwhelm the healthcare system.  

Ironically, the very conditions that threaten the model may prove to be the catalyst to assure greater utilization of post acute care services.

Evidence indicates that leveraging post acute care models will reduce avoidable readmissions to hospitals and reduce overall healthcare costs.

Lower cost delivery models such as Home Health Care should benefit. The key will be to demonstrate value and to continuously innovate to attract a greater share of the health care services pie.

Ankota defines its market as the “Home Care Ecosystem,” which is made up of several types of providers of post acute care services. This begins with transitional care planning (discharge planning), continues with Home Health Care agencies and those that provide necessary equipment (HME companies), medications (Pharmacy) and supplies. It includes those that provide services such as Infusion nursing, Physical Therapy, and Private Duty home care, as well. These companies employ nurses, case managers, physicians, delivery drivers, and personal aids. These are all key elements of the future model for post acute services.

Applying the lessons from Netflix today:

1-      Define your vision for the future of care that will be delivered outside of the hospital setting: At a very high level, define your vision for the Home Care model of the future and what your company’s role will be in that model. Map the steps you will take to get there. Look to forge partnerships to establish your leadership and get you there faster.

2-      Build a super efficient business model TODAY. There are many opportunities to make your business more efficient, and therefore more profitable, immediately. This will have the added benefit of building your competitive advantage today. Leverage technology to improve productivity. Ditch slow, expensive paper processes in favor of electronic ones. Make sure that staff and resources are planned and assigned in ways that optimize their skills and availability, locations, and cost of delivery. Focus on ways to increase utilization and reduce direct costs.

Even the largest home health businesses in the country are incredibly inefficient compared to analogous industries. Studies show that Ankota’s optimization technology can reduce miles traveled by 25-35% and increase daily billable visits (or deliveries if you are an HME company). Tracking work electronically as it is performed—even through simple cell phones connected to electronic care plans—can accelerate billing by days or even weeks (as opposed to paper care plans and time sheets ). Whatever productivity software you choose, make sure it is integrated with your ordering system, includes care planning and real time work tracking, and can pass information to your payroll and billing systems. Regardless of your size, you can build a better operating model than any competitor you face.  You will see results from these efforts immediately, it will make your business more valuable immediately and it will carry you into the future.

3-      From your vision in #1 above, identify &start talking with potential partners. Partners should make your offer more competitive or productive, help provide additional scale to your business, and help you demonstrate value to your customers. Partnering with you should provide them with additional value, as well. Partners might include referral sources such as local hospitals or physician practices, other agencies that provide complimentary services, or HME companies that provide equipment to your clients.

4-      Measure success. Measurement should include both cost and “value” metrics. Some key reasons include:

 

  1. Studies indicate that optimization software (which improves utilization of staff & resources such as vehicles) through better planning, scheduling, routing, etc. can reduce delivery costs by 25-50%. Your business will be more valuable if you understand and track the true cost of providing care or making deliveries.
  2. Measure costs so that you know if you are making your business more profitable (ie, what is your cost per delivery if you are an HME company?). This will also allow you to make improvements and measure the results as you go. Understanding your true costs will help you price profitably as you face issues such as competitive bidding (if you are an HME company) or as you develop new services, seek to establish partnerships, and evaluate new technologies such as telehealth, home monitoring, and so on.
  3. If you are a home health care company, substantiate your value in reducing avoidable readmissions. This will be the key to demonstrating value to referral sources and payers, especially large hospital systems whose referrals you covet. New technologies are emerging that will assist with managing referrals as well as managing closed loop communications among providers who cooperate to provide transitional care. Establishing your role in reducing avoidable readmissions will make your business incredibly valuable to the largest referral sources.

 

The lessons of Netflix provide a great analogy for providers in the Home Care Ecosystem. Whether you are involved in the planning for care upon discharge or are involved in the delivery of post-acute care services, today’s market is a difficult one. Take steps immediately to increase productivity, reduce operating costs, and measure business performance. Establish your vision for the post acute services model of the future, define your role in the model, and devise a plan to move your business in that direction.  

Let your competitors be the local video store of home health care. You be the Netflix.

 Netflix logo

Topics: Home Care Industry, Private Duty Agency Software, Home Care Best Practices, Care Coordination, transitional care, Home Healthcare Delivery Management, Home Care Technology, Will Hicklen, Home Care Scheduling Software

A Hearty Home Care Happy Thanksgiving from Ankota

Posted by Ken Accardi on Nov 24, 2010 8:30:00 AM

To our dear customers, prospects, blog readers and friends,

The Ankota Team is deeply greatful for the blessings that we receive and wish you a wonderfully joyous Thanksgiving.  For those of you travelling, travel safe, and for those of you providing home care this weekend we thank you in particular for what you do.

Happy Home Care Thanksgiving from Ankota

Ankota provides software to improve the delivery of care outside the hospital.  Today Ankota services home health, private duty care, DME Delivery, RT, Physical Therapy and Home Infusion organizations, and is interested in helping to efficiently manage other forms of care.  To learn more, please visit www.ankota.com or contact Ankota 

Topics: Holiday Wishes

Maryland National Capital Home Care Assocation Conference Photo Album

Posted by Ken Accardi on Nov 18, 2010 12:10:00 PM

MNCHA, the Maryland National Capital Home Care Association, held their annual meeting on September 15th and 16th at the Turf Valley Resolrt and Conference Center in Ellicott City Maryland.  Ankota brought our cameras and compiled a few highlights into a conference photo Album.  Enjoy...

MNCHA Conference Highlights 2010 from Ankota, Inc. on Vimeo.

We want to express our thanks to Bernie Lorenz who led MNCHA for the past years and has been a great coach and friend to Ankota.  We'll be sure to share news from Bernie as he transitions from leadership of MNCHA to focus on his home care consulting practice.

MNCHA logo

Ankota provides software to improve the delivery of care outside the hospital.  Today Ankota services home health, private duty care, DME Delivery, RT, Physical Therapy and Home Infusion organizations, and is interested in helping to efficiently manage other forms of care.  To learn more, please visit www.ankota.com or contact Ankota 

Topics: Home Care Industry, Elderly Care, Health Care Reform, Video

Cutting Home Care Budgets Defies Logic

Posted by Ken Accardi on Nov 16, 2010 8:17:00 AM

In a recent article, Kenneth Thorpe, who chairs the department of health policy and management at Emory University's School of

Kenneth Thorpe

Public Health, goes on a bit of a rant about how cutting the budgets for home care is a horrible idea.  The article, written prior to the November 2nd elections, focuses on the politics of the situation and offers the hopeful suggestion that this issue might unite democrats and republicans.  His complete article is available here.

He gives some great examples of the value of home care, many of which we've addressed in this blog, such as the role home care can play in the reduction of readmissions and the bad situations that can be avoided by having a professional make sure that people take their prescribed meds.

But sadly, a few bad apples spoiled the whole bunch, the detected cases of fraud and the statistically significant evidence of "overcoding" won out in the $60B reductions that home care will face from a reimbursement perspective in new legislations.  It's a shame, but it's the reality that we live in.

So what can we do about it?  The first idea is to make a concertedBernie Lorenz effort to improve the image of home care.  In a recent note from outgoing MNCHA director Bernie Lorenz (now available to provide Home Care Consulting as part of Lorenz Consulting in Havre de Grace, MD) he says the following:

In my opinion, one of our biggest problems is us. Home care has a beautiful story to tell. We just need to tell it more loudly and more often. I strongly urge EVERYONE in home care to go to as many Town Hall meetings or Press Conferences as possible. Bring up the information below. I can also provide you with other information if you want. Let me know how I can support you. Our industry has an average daily census of over 500,000 Maryland and Washington, DC citizens. We owe our voices to these patients, their families and our industry.

I'd add that we also need to take this opportunity to become more efficient.  We started Ankota to improve both the efficiency and to improve the coordination of care outside of hospitals.  The early pioneers of Accountable Care Organizations are loving what we do, and we're also available to help improve operations in home health, HME, home care and home-based therapy companies.  Please check out the We're also increasing our focus on "proof of delivery" including spot checks (for example using the GPS in workers cell phones to validate that they are where they say that they are).  Of course our software is sold to home care players who don't abuse the system, but hopefully these techniques will be mandated to weed out the bad actors.

I'm writing this on my way to Atlanta for the MedTrade conference, which focuses on the HME industry.  Learn more at www.ankota.com/dme.

 

Topics: Home Care Industry, Health Care Reform

Highlights of the NYS Home Care Providers Conference

Posted by Ken Accardi on Nov 15, 2010 12:03:00 PM

Ankota had the priviledge of attending, exhibiting and presenting an educational seminar at the New York State Home Care Providers annual meeting on Long Island and caught a few highlights on Video. Enjoy...

NYHCP 2010 Conference Highlights from Ankota, Inc. on Vimeo.

We especially want to thank the NYSHCP association and members for their efforts to include associate members like Ankota as "part of the family."

NYSHCP Bridges Conference

 

Ankota provides software to improve the delivery of care outside the hospital.  Today Ankota services home health, private duty care, DME Delivery, RT, Physical Therapy and Home Infusion organizations, and is interested in helping to efficiently manage other forms of care.  To learn more, please visit www.ankota.com or contact Ankota 

Topics: Private Duty Agency Software, Home Health Aide Software, Home Care Best Practices, Video, New York State HCP

Are you ready for Exponential Growth in Private Duty Home Care?

Posted by Ken Accardi on Nov 12, 2010 1:23:00 PM

After featuring a story from Jason Tweed's Private Duty Home Care newsletter around a month ago, I'm already "going back to the well" and bringing you another gem.  This post comes is an exceprt from the November 10th, 2010 edition of Jason's bi-weekly newsletter Private Duty Today.  Below are links to his home page and his newsletter sign-up. 

Exponential Growth - Part 1

by Jason Tweed

Private Duty Home Care is no longer in its infancy. While there are many young companies, there are an increasing number of companies with more than a decade of experience.
 
For these veteran companies, growth slows or may become non-existent. In the first few years the successful companies saw double and triple digit growth, but now, while still outpacing the economy, natural attrition of staff, caregivers and clients tempers growth.
 
So how do you regain rapid growth?
 
Is Growth Needed?
 
The first step is to decide if you want to grow. As the demand forLeading Home Care Sign-Up home care grows and the national economy rebounds, a certain amount of growth is required. As we say, "If you aren't growing, you're shrinking." Zero growth means that market share is shrinking. So the simple answer is "yes", growth is needed.
 
However, rapid growth is not always necessary. If you are the owner or CEO of a company and are maintaining pace with local competitors and the economy, you're doing your job. Profits should be there. Equities should increase over time. The resale value of your business will continue to rise. So, maintenance is required but not rapid growth.
 
In this issue of Private Duty Today, we aren't talking to the executives who are satisfied. We are speaking to those executives who still salivate at the thought of building a private duty empire.
 
An Empire Starts with One Castle
 
Before reading further, you must ask yourself, "Have I built my castle?" Exponential growth requires a solid foundation. In feudal times castles were critical. They were a statement to neighbors that the lord of this manor was in control. Not only were castles essential for defense, but they were also highly functional communities. While much of the land surrounding the castle was used for farming, ranching and hunting, a strong town could survive inside the castle for months at a time based on how well the castle was run.
 
Before you can grow, you must have a profitable company. The Three Pillars of Private Duty - People, Promotion and Profitability must be solid and stable. You must have the ability to recruit, select, and retain quality people. You must have the ability to promote your products and services with predictable outcomes. Finally, your daily operations must be stable and profitable.
 
Three Methods of Rapid Growth
 
Your business is profitable and your equity is high. At this point you have several options. We are going to look at three of them today, which all have the potential of rapid growth.

  • Merger and Acquisition - Merging with or acquiring another private duty company in your market
  • Revenue Stream Expansion - Developing additional products to serve existing clients, their families and referral sources
  • Geographic Expansion - Using your "castle" as a model, open additional locations in other communities

In the next issue of Private Duty Today we will look deeper into each of these techniques for rapid growth.  Meanwhile, look at your own company and determine your best opportunity for igniting growth

Private Duty Today

Ankota provides software to improve the delivery of care outside the hospital.  Today Ankota services home health, private duty care, DME Delivery, RT, Physical Therapy and Home Infusion organizations, and is interested in helping to efficiently manage other forms of care.  To learn more, please visit www.ankota.com or contact Ankota

Topics: Elderly Care, Private Duty Agency Software, Home Health Aide Software, Home Care Best Practices, thought leadership

Home Care Software Geek introduces Google Trends

Posted by Ken Accardi on Nov 3, 2010 11:22:00 AM

The Home Care Software Geek posts in this blog don't talk about Home Care Nursing Software, Private Duty Telephony, DME Delivery Software, Home Infusion Care Management or the other topics we focus on regularly at Ankota.  Instead, these posts are intended to keep our readers up to date with technology trends that might be useful to your agencies, such as social media technologies, mobile devices, and what's happening from the big-boys like Microsoft, Google and Apple.

Google is the most popular website in the world and has the most traffic.  Have you ever wondered, however, what people are searching for at any given time?  Google thought that you might, so they introduced Google trends.  At google trends they let you know what the most popular searches are on the web at any given time.  So if you look, for example, at what's out there this morning there's a lot of discussion of yesterday's election.  Whereas, if you looked back on Monday some of the hot topics were a bank merger and Randy Moss (wide receiver in the NFL) getting cut from the Minnesota Vikings.

Here's a screen shot of the current search:

Google Trends Sample

The tool doesn't only give you a list of what's being searched the most right now, otherwise things like weather would be on top of the list.  Instead, it looks at hot searches relative to normal search volume.  The other thing it does is to apply a filter on what it considers to be appropriate content.

To access google trends directly, you can go to http://www.google.com/trends/hottrends or cick on the image below:

Google Trends Logo

Ankota provides software to improve the delivery of care outside the hospital.  Today Ankota services home health, private duty care, DME Delivery, RT, Physical Therapy and Home Infusion organizations, and is interested in helping to efficiently manage other forms of care.  To learn more, please visit www.ankota.com or contact Ankota.

Topics: home care software geek

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Ankota provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota's primary focus is on Care Transitions for Reeadmisison avoidance and on management of Private Duty non-medical home care. To learn more, please visit www.ankota.com or contact Ankota.

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