Vacuum Rupture Disk- Blown A

Which cryogenic liquid cylinder in this photo still has a vacuum?

Actually, the only thing we can tell from this photo is that the bottom two do not have any vacuum since their vacuum rupture disks are both blown. The top liquid cylinder might or might not, but this can only be determined through testing.

Vacuum rupture disks are installed on cryogenic liquid cylinders and tanks to protect the outer vessel from rupturing. The inner vessel of a cryogenic tank or liquid cylinder is typically designed as a pressure vessel. Both resetting relief devices and one time rupture disks (head safeties) are usually installed to prevent the inner vessel from over-pressuring and exploding. The outer vessel is only a protective skin and carries no pressure rating. A leak from the inner vessel into the annulus causes pressure to build against the outer vessel. Vacuum rupture disks or vacuum lift plates are installed on outer vessels to allow them the vent almost immediately in the event pressure begins to form in the annulus.

The next things we’d like to know are what might be determined from “how” the disk blew and “who” might should bear the cost of repair.

Medical Oxygen Wakeup Costs Reduction D

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.

Medical Oxygen Wakeup Costs Comments

A couple of really good comments came in today:

Medical Oxygen Wakeup Costs Reduction B You do not mention the fact that owning a bulk tank makes the homecare provider a "manufacturer" in the eyes of the FDA (compared with a "distributor") and opens them up to increased inspections by the FDA or the state board of pharmacy/dept of health.

Medical Oxygen Wakeup Costs The bulk supply company should work with their clients to stagger the refill time. They should also invest in a larger capacity fill hose to get these trucks "in and out" as the faster their customers trucks are on the road making deliveries, the less time their employees are having to spend filling these vans.

Medical Oxygen Wakeup Cost Reduction C

Several suppliers in the U.S. are now offering innovative remote filling services for truck mounted medical liquid oxygen delivery vessels. A few are actually meeting delivery trucks in the field and providing a sort of “in-flight refueling” service that allows homecare oxygen providers to extend their work day without a trip to their main bulk oxygen supplier for refilling. Other suppliers are going to their homecare liquid oxygen delivery client's sites and filling their trucks after hours so that drivers are able to go straight out on their routes in the mornings.

This is a true “value add” arrangement providing the best of both worlds with increased revenue generated for both the bulk or mini-bulk supplier and the homecare oxygen delivery company getting filled. Granted, there is no free lunch and both parties have cost benefit decisions to make related to return on investment and potentially higher direct costs for liquid oxygen. The potential off-set is savings generated from reducing Waiting Time, Transportation, and Talent wastes.

There is a funny twist for cryogenic tank manufacturers in this Cost Reduction series pointed out by a friend: “The more efficient companies become the less need there is for new delivery vessels.” Sure. This is true. Likewise- the more cost-effectively homecare companies can operate the more viable liquid oxygen remains as a solution for respiratory patients and providers.

Medical Oxygen Wakeup Costs Reduction B

The second method for reducing the costs associated with filling medical oxygen delivery vessels seems obvious to the level of ridiculous: Install a bulk liquid oxygen tank at the delivery company’s home facility. Often missed are the not-so-obvious challenges and innovative methods employed by some companies.

Typically, homecare oxygen companies considering installation of a bulk cryogenic tank need demand to be high enough to entice a delivery company to come fill their storage vessel and there needs to be a location at their site for semi-permanent installation of a tank. Also, their use level high needs to be high enough to avoid excessive product waste from boil-off evaporation. A company that owns their own facility with surrounding open space and has a use rate of over 1000 gallons a week usually has no problem meeting these conditions and probably already has a bulk tank.

A more interesting twist has been employed by some companies with less demand and/or the inability to get approval for installation of a bulk tank. Several have chosen to purchase a portable bulk tank and operate much like the old book-mobile or roving library. These companies are buying mid-sized (500-850 gallon) portable liquid delivery vessels and truck or trailer mounting them. They are then taking their liquid oxygen vessel to their main site or a satellite facility and parking it so that their delivery drivers can fill more quickly and conveniently without waiting in line at the main liquid supplier. It is also possible for them to tie this liquid source into a small fill system to charge gas cylinders. Some are getting their portable vessel filled in the field by liquid suppliers who bring the liquid to them. Others are still driving to the main supplier for liquid oxygen, but they are greatly reducing waste by having only one truck go to the supplier instead of several. Time is also saved since they are able to schedule their pickups at lower demand times and avoid long lines.

At last night’s SMEI (Sales & Marketing Executives International) Houston chapter inaugural meeting one participant commented that there are a dozen different ways to DO things right. The emphasis remains on the “do” verb.

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.

Medical Oxygen Wakeup Costs

A bulk medical oxygen provider told me recently about the lines of drivers they have many mornings waiting to get their truck-mounted vessels filled for that day’s delivery runs. Several others confirmed that it is such a trend that a lot of the homecare delivery drivers have purchased personal DVD players to watch movies while they wait in line.

One of the main costs Lean Methods focuses on is “Waiting Time” waste. This situation is amazing if you consider an average work year of about 200 delivery days and the cost not only of waiting, but also getting to the plant, filling and then actually getting out to respiratory oxygen patients. This adds Process, Transportation, and Talent wastes and instantly begs the question of how others might be avoiding or limiting these costs. There were some interesting answers that we’ll explore in greater depth in future posts. They include:

-Use larger cryogenic tanks in trucks to cut down the number of fills required annually;
-Install bulk tanks at depot facilities to avoid going to vendors;
-Acquire larger portable tanks to use for remote depot and field filling;
-Outsource filling services;

Please share other ideas if you have them and we’ll work more on this and a couple of related issues over the next few days.