Managers think outside the box to address cost of gas
October 1, 2008
Managers think outside the box to address cost of gas
Hybrid vehicles, surcharges evaluated for effectiveness
A creative approach to getting travel costs under control will mean an annual savings of least $50,000 for Alegent Health at Home in Omaha, NE. Moving to a fleet of agency-owned hybrid vehicles, the hospice and home health agency expects to save money previously reimbursed for employees' business travel costs.
"Our organization has always reimbursed at the rate allowed by the Internal Revenue Service [IRS]," explains Denise McNitt, RN, MS, division executive for the agency. "Our employees travel more than 800,000 miles each year, which meant $400,000 in mileage reimbursement for one year," she points out. The IRS' recent increase of the allowable mileage rate reimbursement to 58.5 cents would have meant an extra $10,000 to McNitt's agency if the vehicle lease program was not in place.
"We started evaluating leasing a fleet of vehicles to be owned by the agency for the use of our employees," McNitt explains. At first, the leasing company proposed an agreement for 50 cars to be leased with the same mileage allowance, she says. "The one-size-fits-all lease didn't work because we have some employees who travel 8,000 miles each year and others who travel over 20,000 miles," she says. By restructuring the lease to address different categories of mileage, the agency was able to see a cost advantage of agency-owned vehicles compared to reimbursement for use of a personal vehicle, she says.
The agency fleet is comprised of 50 Toyota Priuses, hybrid vehicles that average 48 miles to the gallon, says McNitt. "We evaluated several vehicles and wondered if the Prius would be the best choice for our roads in the winter," she admits. After a Prius was brought to the agency on a snowy day for test drives by different employees, everyone agreed that the car had plenty of space in the trunk and handled well on the winter roads, she says.
Rural agencies face greatest challenges
The rising cost of gasoline is especially hard on hospices that serve rural areas, says Lisa Genereux, RN, director of Bear Paw Hospice in Havre, MT. "In fiscal year 2008, our employees averaged 20 miles per visit," she points out. Even with careful scheduling that groups employee visits as close together geographically as possible, staff members still spent a lot of time driving, Genereux says.
Although her agency continues to see patients throughout all parts of the service area, managers are carefully evaluating patients who live great distances away from the main office, says Genereux. For example, staff provided care last year to one hospice patient who wanted to die on his ranch, which meant a two-hour, one-way trip to see him, she says. "Luckily, he had a strong support system with family that lived within one mile of his home, so we were able to care for him in his last three weeks with less-than-daily visits," she recalls.
Telephone calls to the patient and family members supplemented visits and allowed the staff to provide the support needed by the patient and family, she points out. "If he had required daily visits because there was no family support, we couldn't have provided the care because of the distance," she adds.
Her hospice doesn't reimburse mileage at the full IRS rate, so Genereux reminds employees that they can claim the difference as a deduction on their tax returns. Even with this tip, she is concerned that employees have to spend so much of their own money at the gas pump. "Our reimbursement checks come after employees already spent their money, and this can be a hardship, especially for home health aides who are our lowest-paid employees," she admits. While an increase in reimbursement is being considered, Genereux also plans to provide tips on how to increase gas mileage to help employees save a little more money.
Another approach to reducing the effect of travel costs on a hospice's bottom line is to add a fuel surcharge to the visit charges, suggests Lezlie Snoozy-Kaitfors, owner of Comfort Keepers, a private duty home health and hospice in Rapid City, SD. While Medicare doesn't reimburse a fuel surcharge, her agency has found the surcharge paid by private duty clients to be helpful in offsetting travel costs of employees. The fuel surcharge for each visit is $3, she says. The total amount of money collected by the agency is given to employees on a monthly basis, with the reimbursement based on the number of visits made by the employee during the month.
Because her employees are going from their homes to the patient's home, the agency doesn't reimburse mileage charges, so the fuel surcharge does help, Snoozy-Kaitfors explains. Aides do not travel between patients' houses or to and from the hospice office, so there is usually no mileage reimbursed, she says. "We do reimburse employees the IRS allowance if they take clients to the physician office during the day," she adds.
Rural agencies that serve a large geographic area may have to make tough decisions that may reduce service areas, says Genereux. She says, "We are not reducing our service area at this time, but we will re-evaluate everything next year to see if steps we've taken are effective and if gasoline costs have continued to rise."
A creative approach to getting travel costs under control will mean an annual savings of least $50,000 for Alegent Health at Home in Omaha, NE. Moving to a fleet of agency-owned hybrid vehicles, the hospice and home health agency expects to save money previously reimbursed for employees' business travel costs.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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