Reducing Wakeup Costs for Medical Oxygen Delivery A

Yesterday we hit on the costs of “Waiting Time” waste for companies cued up to get medical oxygen delivery trucks filled and associated Process, Transportation and Talent wastes. The first method identified for reducing this cost is the use of larger vessels for liquid oxygen delivery. A number of companies who had been using 160liter liquid cylinders or “119” gallon delivery vessels moved up to 210, 290 or 500 gallon cryogenic tanks. The additional capacity has allowed them to visit many more patients between fills resulting in both increased revenue and cost savings.

The expense of getting to the first medical oxygen delivery each day is substantial and opportunity costs of inadequate supply can be high. It can be both frustrating and costly to get to a cluster of clients 30 minutes or an hour from home base and run out of liquid mid-afternoon. This commonly occurs when it is too late to go refill and return meaning that there was not only waste on the front of the day, but also on the end. For those who must return to meet critical patient needs it means an extra trip back and the likelihood of overtime costs.

A company moving to larger cryogenic tanks might find they can even reduce the number of trucks in service while still growing their client base. Some have been able to move from five 8-hour days to four 10-hour days. If it takes 1 hour to get out each day and you do this for 4 days a week instead of 5 then labor related “wakeup costs” are reduced right away. The return on investment is compounded greatly when cost savings are accompanied by elimination of missed opportunities at the end of the day.

An even higher level of performance is achieved by a few companies that not only fill individual liquid oxygen containers, but also deliver to other medical oxygen providers and fill their cryogenic tanks in the field. This results in a true win-win for both parties who are simultaneously increasing revenues and reducing costs.

One of the most interesting aspects of acquiring larger medical oxygen tanks and trucks is the availability of funds from third party investors. Savvy financial sources understand that a move to larger vessels can improve financial returns and several are receptive to funding value strengthening moves.