National chains are using GPS navigation systems to boost routing efficiency with plans for more sophisticated applications. As technology becomes more affordable, small and mid-size providers too may find it easier to go high-tech.

The quickest, safest, most economical travel route from your location to the customer’s home is a distance of 12,000 nautical miles. Really. That’s how far a special radio beam originating with a cluster of satellites in space must journey to reach a receiver in your car, van, or truck to help you reach your destination without getting lost, wasting gas, or breaking down due to engine trouble.

The technology that makes all this possible is known as GPS—short for global positioning system, a method of electronic navigation developed by the Pentagon several decades ago but now available for civilian use. Lately, GPS has been finding its way into the HME industry, with Apria Healthcare among those currently putting it to use.

According to Garrett Saito, vice president of logistics for Lake Forest, Calif-based Apria, his company seeks to use GPS to—among other things—optimize the way same-day deliveries are handled and to increase on-time delivery commitments. “GPS fits right in with our continued long-term vision for operational efficiency and improved patient and referral services, and that’s why we started looking into it,” says Saito.

Automated routing and delivery
Apria is adopting GPS technology in three stages. The first, which commenced in late 2003, was completed in early 2005. It involved implementation of an automated routing and delivery system developed by UPS. Sold commercially under the name UPS LT-Roadnet/Mobilecast, the system helps drivers get to where they need to go by the most efficient route possible. “It’s an optimized routing solution that provides completed stop updates and visibility, estimated-time-of-arrival information for customer updates, and real-time feeds to communicate and transmit same-day order information directly to a Nextel handheld [device],” says Saito. “Delivery information is continuously transmitted through the network to update completed stops, route information, and additional information directly to the field.”

In support of UPS LT, Apria set up 16 dispatch centers at key locations across the country to coordinate the movements of a fleet of more than 2,200 vehicles deployed among 450-plus branch offices, Saito reports. The second stage of Apria’s initiative is slated to get under way sometime during the fourth quarter of this year, with a pilot program test of an in-vehicle computer that captures and relays data about mileage, speed, fuel economy, idle time, and engine performance. “We think this will prove useful from the standpoint of fleet management and preventive maintenance,” says Saito, adding that the system goes by the name Telematics. “For example, in communicating with the truck’s own computer, this ‘black box’ technology will be able to alert the dispatch center if, say, one of the engine cylinders on the truck is misfiring, which will allow us to get the vehicle in for servicing before it is in danger of breaking down on the road. That kind of capability is critical for us—because the last thing we want to do is be in the position of having to tell the customer, sorry, we can’t make the delivery today because of vehicle problems.”

Getting BUY-IN
Given the spike in gasoline costs over the past 12 months, gaining the ability to monitor fuel use of delivery vehicles should be of benefit to Apria. “We can’t do much about the price of gas at the pump, but we can do something about our gas consumption,” says Saito. “One significant source of wasted fuel is engine idling. The Telematics system will provide us data about engine idle times that we can consider in routing and scheduling deliveries.”

Saito hesitates to estimate how much fuel—and, by extension, money—could be potentially saved by this monitoring methodology. “We’ll have a reasonably good sense of it after we analyze the data collected during our pilot project,” he says. “But even a small amount of fuel saved will be helpful in terms of trimming operating expenses.”

Naturally, some drivers whose companies are weighing use of this technology decry it as a form of spying and fear they could land in hot water with higher-ups over driving style and habits. But Saito says driver objections can be countered. “You achieve buy-in by educating the drivers about the real nature and purpose of the technology—and that is to monitor the vehicle, not the drivers, to help them have fewer problems on the road, help keep them safe on the road, and generally help them have the tools they need to perform their jobs better,” he says.

SUPERSIZED CAPABILITIES
Ultimately, GPS tracking of vehicles is about much more than merely cutting costs, Saito adds. “It builds into our infrastructure a greater capacity to take on additional business,” he says. “That’s important to us because we are continually increasing the number of customers we service. For example, this year we picked up a very large contract with Cigna, so we now have all of their patients to service.”

In stage three—planned for 2008—Apria will further promote increased capacity by supersizing its GPS capabilities in a way that permits expanded use of handheld data devices in the field. “We will be equipping all our delivery technicians with a handheld device, through which they will be able to receive routing instructions as well as notifications of any vehicle problems detected while they’re driving,” Saito says.

The routing instructions they receive will include same-day setup orders and last-minute changes to the schedule after the truck is already en route. Moreover, the handheld devices will pave the road to improved inventory management. “Our [expectation is that our] drivers will be able to access information pertaining to the equipment that’s rented or sold to the patient, in addition to information about the supplies being sold to that patient on a recurring basis,” says Saito. “In short, a driver will have increased visibility to customer needs, along with the supplies the customer needs. If the driver notices that the patient could benefit from having, say, a bath bench or any other HME item that would improve that patient’s comfort or lifestyle, the order can be submitted via the handheld.”

The handheld devices will capture the patient’s signature electronically for billing requirements. “This,” says Saito, “should expedite the processing of claims, automate co-pay collections, and ultimately decrease DSO. The handhelds will be able to read credit cards, so the driver can collect the co-pay simply by having the patient swipe a credit card through the handheld’s reader slot. That transaction will be captured and instantly transmitted to our billing centers and from there into our electronic accounting systems.”

Suitable for smaller providers?
Saito is convinced that GPS and related mobile applications will bolster the Apria service model, not to mention the company’s bottom line. But can this technology be adopted for use by mid-sized and even small providers? Likely they will find the cost prohibitive or, at the very least, daunting.

The good news is that it is not that expensive to buy a basic GPS navigation package for guiding an individual vehicle from Point A to Point B. And, eventually, comprehensive routing and scheduling systems and onboard vehicle computers could become affordable even for mom-and-pop shops if competition increases among GPS and mobile systems manufacturers.

Says Saito, “This technology is potentially significant to the home health care industry in the same way the desktop computer was when it arrived 25 years ago. In these days of reimbursement compression and the continuing rise in referral source expectations, HME companies must leverage technology to run the lean operations that the retail industry now has. GPS and mobile technology are ideal for achieving exactly that.”

Rich Smith is a contributing writer for Dealer/Provider.