Apria is one of the United States’ leading providers of home respiratory services and related medical equipment, used in areas such as oxygen therapy, inhalation therapies, sleep apnea treatment and negative pressure wound therapy. Headquartered in Lake Forest, California, Apria owns and operates more than 400 locations throughout the United States and serves more than 1.2 million patients each year.
“We’re now able to deliver outstanding healthcare to more people than ever.”
– Jim Slagle, Senior Director of Business Intelligence and Data Analytics, Apria Healthcare
Identifying reporting challenges
In the U.S. healthcare industry, an increasingly stringent regulatory environment and intensifying competition are placing downward pressure on margins. For specialist healthcare companies such as Apria Healthcare—a leading provider of home respiratory services and medical equipment based in Lake Forest, California—the challenge is to offer patients the highest-quality services at the best possible price.
Jim Slagle, Senior Director of Business Intelligence and Data Analytics at Apria Healthcare, explains: “To continue to grow the business and reach new customers, we need to invest in strategic initiatives, such as opening new business units and building more competitive pricing models for our services. But which of these initiatives have the greatest potential to increase efficiencies and control costs?
“Because we operate across the whole of the U.S., we gather a lot of data about the market for our specialist products. We knew this data could help us see opportunities quicker and gain a more holistic view of the market than some of our smaller competitors. To help us focus on the most promising opportunities, we first needed to understand the true cost of our operations—a considerable challenge for a healthcare organization of our size.”
Jim Slagle continues: “In the past, we relied on spreadsheets to capture our profit and loss data and forecast performance. Because different parts of the business used different spreadsheets, it was difficult to ensure that we were capturing and using our data in a consistent, accurate way. As a result, analyzing costs took a lot of time, and we couldn’t be 100 percent confident in the results.
Building an analytics solution
Apria decided to build a centralized approach to forecasting, and looked for an enterprise-class solution. After reviewing analytics solutions from a number of vendors, the company selected IBM® Cognos® TM1® on Cloud.
Jim Slagle recalls: “To demonstrate to the business that we were making the right decision, my team worked with key members of the finance function to run a proof of concept exercise—and the results were very positive. We presented the results to our Chief Financial Officer, who is a very progressive leader. She immediately realized the potential business value of the solution.”
Working together with a team from IBM Premier Business Partner Aviana, Apria Healthcare built a secure budgeting and forecasting environment for its distribution business. By deploying the solution in the cloud, the finance team gains the flexibility to scale its analytics environment to meet immediate business needs, while reducing its dependence on internal IT support.
“Without a doubt, our partnership with the expert team of consultants from Aviana was a key factor in the success of the project.”
– Jim Slagle, Senior Director of Business Intelligence and Data Analytics, Apria Healthcare
Jim Slagle comments: “The bulk of the data that we use to build our financial plans comes directly from personnel at our 370 locations. These are the people who will ultimately consume the forecasts that we generate, so gaining their trust in the solution was crucial. Cloud deployment allowed us to sidestep many of the traditional on-premises hardware issues, and focus 100 percent on developing a solution that would give our users exactly what they need.”
He adds: “In fact, user adoption has been tremendous. After just a few weeks, we were using distributed reporting in the field with extremely positive feedback from our business users.
“Without a doubt, our partnership with the expert team of consultants from Aviana was a key factor in the success of the project. Throughout the process, Aviana worked side-by-side with us to ensure that our migration to IBM Cognos TM1 on Cloud went smoothly, and the team was always on hand to provide guidance and support when we needed it.”
Accurate data, trusted reports
Apria Healthcare is now able to deliver accurate budgets, forecasts and reports to a broad audience of stakeholders quickly and effectively.
“We have eliminated virtually all of the data quality and trust issues that were raised by our old spreadsheet-based processes,” says Jim Slagle. “We use a single, centralized analytics engine to process our financial data in a repeatable and consistent way. Crucially, improving the quality of our data is helping us to gain a clearer picture of the true state of our operations.
“For example, it was previously a significant challenge to gain even a relatively simple measure such as average revenue per employee—today, that insight is just a mouse-click away. After we have finished building the strong foundation of our budgeting and forecasting functions, the next step will be to fold in more advanced analyses.”
Understand costs, increase competitiveness
Jim Slagle continues: “In the past, we spent so much time and devoted so many resources to bringing our budget together that there was very little time to analyze the figures ahead of crucial board meetings. Thanks to TM1, that is all going to change. As well as drilling down into our data to identify variance between our forecasts and actuals to drive cost-efficiencies, we aim to align our sales goals directly with our planning process.
“By gaining a complete understanding of all of the cost drivers for each of our products—including specialist labor, medical equipment and logistics—we will have the ability to create centralized pricing models across the entire business. This could be an extremely valuable source of competitive advantage, as it would potentially enable us to better use our economies of scale to deliver the same high-quality care services at a significantly lower price.”
Ready for the future
After taking the first steps on its analytics journey, Apria Healthcare is already looking to the future. Jim Slagle concludes: “One of the biggest benefits of cloud-based analytics is flexibility: we are not locked into any of the data modeling choices that we are making now, and we can adapt the solution as our needs change. If you do analytics right, it really can transform your business. I am confident that the insights we obtain are going to help us to bring outstanding products and services to more people than ever before.”