TCM – Cost Benefit Analysis

Total Compliance Management

Cost Benefit Analysis

 

There are three ways a business can evaluate a decision in terms of its potential cost benefit. A Cost Benefit Analysis can be applied to the adoption of new or the change in the existing whether it be  equipment, software, procedures, staffing or any other “asset”.

 

In the case of Total Compliance Management or “TCM” we are talking about measuring the cost benefit of the delegation of clerical and management functions to another company. Specifically, delegation to a “Service Agent” as authorized under DOT Part 40.

 

The three ways in which cost benefit can be qualified or quantified follows.

 

  1. Adopting a new process or changing an existing process results in an improvement in outcome – the company/employer simply gets better results. An example of this cost benefit might be fewer audit red flags generated by the failure to conduct follow-up tests. Follow-up tests, those tests administered following a positive test result and SAP treatment program, as directed in DOT Part 40.
  2. Another way Cost Benefit can be measured relates to the company’s ability to do more than it cold before the change was made. And we don’t only mean quantity.  Looking at the business unit responsible for compliance management, evaluate where it can better spend their limited resources – namely time and budget. More time can buy the ability to improve or adopt new processes. This could mean an updated policy guide, a new management training programs. This benefit could make it possible to more effectively research medical benefits programs and options. Customer satisfaction surveys could be conducted, results analyzed and new programs developed to improve customer satisfaction. Think about the things you wished you had time to finish. Projects that have a direct, positive impact on your company’s bottom line.
  3. A third way cost benefit can be measured is cost savings or even, cost avoidance. This is the more traditional way in which businesses measure and evaluate cost benefit. Delegating compliance management to HEC costs pennies per day, per employee.  Compare that cost to your company’s present internal costs to support DOT compliance. In addition, if an employer has been fined in the past, the business can hope for improved results and fewer fines. Assumption being that the service agent with its proven track record will do a better job resulting in a cost avoidance benefit.

 

Summary: Adopting TCM systems and procedures makes it possible to capture compliance events at the point of occurrence. This results in a process improvement that saves time, improves quality and enables the business to do things that it could not easily do before.

 

So now we will look at Total Compliance Management (TCM) and those additional benefits an employer can anticipate.

 

Health Enhancement Center (HEC) also offers a cost benefit analysis at a modest cost plus expenses. This cost is refunded if the employer elects to contract with HEC for TCM services. It may confirm what you already suspect – compliance is expensive.

 

TCM Additional Projected Benefits

  • Fines – This could be a big number. The average DOT Part 40 fine is $5,100. HEC has over 25 years experience managing compliance. We presently manage compliance for over 700 clients. We know of one client fined in 25 years!! We suspect that is a pretty acceptable track record.
  • Staff Time – This is an even bigger number! The amount of time the DOT demands from employers is staggering. We all know that the potential for disaster is always there and no person or business wants to be responsible for death and injury. At the beginning of DOT testing programs, when Ronald Reagan was president, 18% of the first drivers tested, tested  positive. That is pretty frightening especially when you consider that today that figure is around 6%. We think that is progress – compliance works! So the costs to employers associated with personnel who spend time maintaining DOT compliance is significant. But we need to keep it in perspective, compliance is also of significant benefit.
  •  There are 35 separate event driven tasks each employer is required to perform. This is in addition to testing and training. HEC has created an automated system that helps owners, employers, employees and DERs stay on top of compliance event management, data capture and reporting. In addition, HEC staff performs many and supports all 35 tasks. These tasks exclude employee management. HEC or any service agent cannot manage an employer’s employees. The DOT specifically prohibits that.
  • The specific amount of time that each employer spends on DOT compliance is determined by the number of employees and the due diligence commitment of the employer. Some employers wait until the DOT knocks. That is just a fact. If you look at the list of 35 compliance tasks, it can be overwhelming and some employers decide to just defer hoping no one will  notice.
  • The amount of time a employee spends simply getting a drug test costs an employer significantly more than a drug test. Driving to the collection site. Waiting at the collection site. Returning to work from the collection or breath testing event is a significant cost from the standpoint that the employee is being paid and is not productive. Then there is the post accident, reasonable suspicion and observed collections. These events can take hours of expensive employee time. So how does TCM address these costs?
  • The answer is convenience. TCM can address drive time. Using the closest collection site is not always advisable because these service agents do not support compliance. Collection sites collect, they do not do compliance. Take the DOT list of 35 compliance events to your local collector, doctor’s office, occupational med facility and ask them to state, preferrably in writing, how they support the 35 compliance events. You might be amazed. However, if your company is a TCM client, go anywhere for DOT Part 40 services. Go to the cheap drug tester on the corner – they are cheap because they provide limited services and don’t do complaince. By all means, go to the closest site to where your employees are located to save the commute and never worry about compliance issues.
  • Save Time – Expand Your Collection Network – Here’s anther benefit of being a TCM client. If you need a convenient collection site, we will create one for you. We will recruit and train the site staff and create a time saving, convenient location that will save your employees time. Give HEC the locations needed and we will do the work.
  • Limit Disruption, Improve Customer Service – Pulling employees off the job is expensive and disruptive. These events caused by compliance failure adversely affect customer service. When these events are precipitated by compliance failures, they are totally avoidable.
  • According to the DOT in Part 40, it’s The Employer’s Job To Ensure Service Agent Performance – Employees are the source of compliance failures. Make them part of the compliance management solution. Armed with compliance forms and instructions on their smart phones, your employees can not only initiate service agent quality checks, they can provide procedural guidance. They will not be conducting these quality control and training events, they will be handing the collection site the web site address. The service agent goes to the survey or guidance web site and then emails the results to HEC for review and follow-up. In this way, employees become part of the solution – in no time or certainly in very little time investment. Part 40 says it is the employers job to check the service agent. Your employees are there. Have them deliver the means.
  • We will be adding more benefits as we collect them from TCM client experience.

 

Copyright © 2015 Health Enhancement Center

Health Enhancement Center
8615 Commerce Drive
Easton, MD 21601
Jim Proctor, President
410-822-8690 (office)
410-822-9434 (fax)

 

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