Education ....continued from previous page Admittedly, educators too are partly responsible. There’s a


gap between how teachers teach and how students learn. Mod- ern day students want instant gratification and immediate "hands-on" experience. On the other hand, seasoned faculty are in large part still lecturing on concepts and abstractions. Each is frustrated with the other. The dichotomy that exists between teaching and learning is one more suspected factor that con- tributes to drop out rates. A multitude of studies have explored the factors related to


student retention. Time and again the research shows that it’s students’ positive relationships with faculty and the social inte- gration achieved during the college experience that portend success with respect to earning a degree. But on average, stu- dents are considerably older now and often come to college carrying some heavy baggage. Small wonder that the older, non- traditional students who are bound by time, place and job re- sponsibilities are at high risk for dropping out. The demands and activities of daily life will always eclipse those of pursuing for- mal education. Examining the topic of why students do or do not persist in


a college course of study is important. After all, awareness is al- ways the first step in addressing any issue. In the end there will always be those who drop out, stop-out or just plain flunk out, but published retention and graduation rates have a way of mak- ing things look worse than they really are. To discuss how this can be fixed, or if in fact, it’s a problem that needs fixing at all, is something I’ll leave up to the readers. Or perhaps it will be the topic for another Focus on Education.


Homecare ....continued from page 11


marketing and administrative costs are not included in product costs. In ABC the primary goal is to break out indirect activities [or costs associated with those activities] into pools that can then be assigned to processes in a manner that better reflects the way costs are actually incurred. In ABC it is essential that the methodology recognize that processes or products in differ- ent proportions for each activity consume resources, labor or materials. So why is it important to understand or even use ABM and


ABC? Whether a home care provider participates in competitive bidding or not they need know their costs of doing business. New technology for oxygen delivery for example is evolving and some new devices allow for improved efficiencies for HMEs. Home care providers need to develop a capital equip- ment strategy to understand and determine costs related to dis- tribution, services, overhead, labor etc., prior to adopting new technology to determine the benefits of their investments. ABM and ABC involve a few basic steps that may include sub-steps but the following primarily encompass the necessary tasks used in ABM and ABC. The steps are as follows: 1) Define the project scope – the organization must specifically identify the process to be reviewed and lay the groundwork to apply ABM or ABC. 2) Identify activities [or] costs and their drivers – this involves developing the process flow based on the activities [i.e. pro- cessing a claim]. 3) Lay out the process flow – each step in the process must be spelled out in order to identify gaps or ineffi-


ciencies. 4) Collect data – this step relies on results from the current process for example the time it takes an employee to process a claim versus the number of claims paid. 5) Identify the ABM/ABC tool to be used – there a number of resources that will be discussed later and the tools may include com- plimentary tools to augment the process. 6) Build the model using the selected tool – many tools have algorithms and soft- ware that simply require HMEs to plug in data. 7) Test and validate the model – an important early step before fully im- plementing to assure the applicability of the tool for the spe- cific organization. 8) Analyze the model results – once a test is conducted to validate the tools the results must be re- viewed to determine if the hypothesis can be answered using the tool. 9) Take action – once the tool has been validated the next step is to fully implement the process and based on the outcomes create new system improvements or new processes.


ABM and ABC Resources There are a number of resources specific to HMEs. The


following are not inclusive of all resources but provided to illustrate examples of available tools that HMEs can use to begin the ABM and ABC process. •The Weeks Group: (www.weeksgroup.com/ABC/index)


This organization provides tools that assists HMEs with knowing their activity costs to help identify the best prod- ucts for their patients to preserve or contribute to gross profits. The tool encompasses methods associated with ABM to identify inefficiencies that lead to waste and ero- sion of the gross profit. • ICMS: (http://www.icms.net/news-58.htm) This organiza-


tion provides ABC and ABM tools to assist organizations with mapping out the processes to identify the most appro- priate methods for an HME to run their business. • Strategic Dynamics:


(www.strategicdynamicsfirm.com/index.html) This organiza- tion has tools that augment ABM and ABC and helps HMEs identify the most appropriate oxygen delivery method in- cluding ideal products to meet the needs of the majority of patients.


Conclusion Competitive bidding will occur and the time for prepa-


ration is at hand. There is no room for inactivity and HMEs must understand how to get the most out of their operations while not compromising quality, patient satisfaction and out- comes. ABM and ABC will help HMEs develop the frame- work to participate in competitive bidding and ultimately identify capacity that allows them to grow or expand in non- traditional markets. ABM and ABC supports continuous im- provement by providing HMEs with insights into customers, business activities and processes, capital acquisition (deci- sion to buy one product versus another) and permits them to adopt practices to better service their customers and adopt management practices that encourage greater value added by all employees. Price Compression and reimbursement cuts will continue and HMEs must begin to quantify and un- derstand their activities and costs associated with doing busi- ness to become more efficient and ABM/ABC is absolutely essential for organizations that wish to participate in compet- itive bidding.


Focus Journal Winter 2012 35


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