Outsourcing provides many homecare companies the option to provide liquid oxygen where they otherwise would not be able to. For others already delivering liquid it can mean increased profits and the ability to focus energies on patient care and other parts of their business. Outsourcing is a big topic containing enough twists and turns that we’ll come back to it with more extensive discussion in later posts.
Some people wonder how a subcontracting company can provide liquid medical oxygen delivery at a rate low enough that they and the principle homecare provider can both make a profit. And this is a good question as there is no guarantee that every situation has a mutually beneficial solution. Also, even where there are standard conditions that would seem to be ideal there are other voiding conditions. This is particularly true in smaller or more remote areas where there is not an adequate concentration of users.
One place the outsourcing model works best is where the delivering company (outsource provider) can enjoy increased economies of scale by adding stops to daily routes. It is pretty easy to see that a lot more positive cash flow is generated from a route that does 16-20 stops in a day than a route doing 6-10 stops. Picking up subcontract deliveries can make a huge difference in profitability even if the incremental additional deliveries are provided at lower rates than others. This is much like the pizza delivery model where more actual profit might be made from the second pizza at $6 than was made off the first pizza at $12.
The point of all the ideas we have covered is that it is possible in many cases to increase positive cash flow generated by liquid medical oxygen delivery. And, the availability of liquid delivery can also generate other positive referrals and revenue streams for homecare providers that they would otherwise be missing.
Some people wonder how a subcontracting company can provide liquid medical oxygen delivery at a rate low enough that they and the principle homecare provider can both make a profit. And this is a good question as there is no guarantee that every situation has a mutually beneficial solution. Also, even where there are standard conditions that would seem to be ideal there are other voiding conditions. This is particularly true in smaller or more remote areas where there is not an adequate concentration of users.
One place the outsourcing model works best is where the delivering company (outsource provider) can enjoy increased economies of scale by adding stops to daily routes. It is pretty easy to see that a lot more positive cash flow is generated from a route that does 16-20 stops in a day than a route doing 6-10 stops. Picking up subcontract deliveries can make a huge difference in profitability even if the incremental additional deliveries are provided at lower rates than others. This is much like the pizza delivery model where more actual profit might be made from the second pizza at $6 than was made off the first pizza at $12.
The point of all the ideas we have covered is that it is possible in many cases to increase positive cash flow generated by liquid medical oxygen delivery. And, the availability of liquid delivery can also generate other positive referrals and revenue streams for homecare providers that they would otherwise be missing.
Posts
