Case Study

Healthcare's Unique Challenge: Managing Employee Spend

By Daric Wilhite, Motus

Drop In Healthcare Spending Linked To GDP

Healthcare facilities nationwide face increasing pressure to reduce costs across their organization. Providing patient care is the top priority. For that reason, healthcare executives take advantage of cost savings opportunities within administrative spend to reinvest in critical business areas. These reinvestment efforts enable them to provide better quality care.

Unfortunately, healthcare budgeting is far more complex than the spend of companies in any other industry. This is due to the wide scope of services the industry provides. Given its complexity, managing spend becomes particularly tricky for hospitals and health systems.

To further complicate matters, healthcare has started to move outside the four walls of the hospital. Technology makes connecting with every employee – including remote and mobile workers – easier. This means more physicians are able to drive to patients' homes or other satellite facilities to provide home health, hospice or rehabilitation services. The mileage these physicians and other traveling healthcare workers rack up represent another line item that must be accounted for in a hospital’s budget.

As a result, healthcare organizations face the challenge of accurately reimbursing the high reported mileage from numerous employees. To put this scale in perspective, a billion-dollar health system will typically report four to five times more personal mileage than a billion-dollar Fortune 500 company.

Why Reimbursement Flies Under The Radar

When it comes to reimbursing business mileage, the new mobile workforce simply lacks visibility, allowing the issue to go unaddressed. Healthcare companies do attempt to enforce the keeping of mileage logs and report summaries from patient visits. However, this lengthy, manual process requires already time-strapped physicians and healthcare workers to not only record starting and ending odometer readings for each trip, but also piece together disparate data. Additionally – far from exact, accurate numbers – reported mileage is regularly rounded.

The difference between 7.8 miles and 8.0 miles isn’t big. But these fractions of a mile can turn into excess spend when a healthcare facility has a team of physicians who drive a combined 30,000 miles per year. Those 0.2 miles add up very quickly to an additional couple thousand miles per employee. That means thousands of dollars more in incorrect over-reimbursement. Inevitably, without the proper tools or technology to record exact mileage, busy healthcare executives and finance departments have no way of determining the accuracy of these numbers.

At the same time, there is a portion of people who should be reimbursed but are too busy to keep manual logs of their trips. When expenses aren’t tracked and are under-reimbursed, healthcare facilities can open themselves up to the threat of lawsuits. This is especially true in states with stringent labor laws like California (Section 2802) and Massachusetts (Regulation 454 CMR 27.04(4)), which require companies to accurately reimburse employees for job-related expenses.

Managing Mileage Capture With Automation

Thankfully, the inaccurate, time-consuming approach of manual mileage records is no longer necessary. Today, mileage capture tools automate the processes of tracking an employee’s driving and ensure that the number of miles driven equals the number of miles reimbursed. This saves hospitals and health systems money, while also fairly reimbursing employees. In fact, automated mileage tracking and real-time mileage reimbursement can allow healthcare companies to save as much as $2,500 – $3,500 per employee per year.

In addition to eliminating manual processes while healthcare workers are providing patient care on the road, this kind of automated technology also can provide healthcare facilities with valuable analytics that allow them to determine how long each driver is at a location or how long it took to drive there. For example, zeroing in on data that reveals patient locations or routes can empower healthcare organizations to redirect routes to make them more efficient or reassign patients so mobile nurses can provide care for as many patients as possible in a given day.

With automated technologies that allow for accurate vehicle reimbursements, hospitals and healthcare facilities can make better administrative decisions that enable them to redistribute their budgets to improve patient care and, overall, drive better healthcare outcomes.

About The Author

Daric Wilhite is Senior Regional Sales Executive at Motus.