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Dan Gray, President
Surviving and Thriving in a Belt-Tightened Economy
Oklahoma Association of Homes
and Services for the Aging (OKAHSA)15th Annual Meeting,
Educational Seminars & Exhibition
March 10, 2010
Reality Check
Front door is essentially closed—CDS predicts IL occupancy at most CCRCs will decrease over the next 3 to 5 years
EXCEPTION:creative, equity-based models where developers are willing to buy residents’homes
Reality Check
Moving through the traditional “continuum of care” may not be the best strategy moving forward
OPPORTUNITY:Aging in place (lengthening each resident’s stay) and establishing your own home care services. One equity-based CCRC generates $2M in revenues annually through home care.
Moved
Strategies to Thrive and Survive
Client Vision
Set goal to provide seniors the RIGHT:
▪ SERVICES (maximize my independence)
▪ PLACE (my own home)
▪ TIME (before I lose function)
▪ PRICE (what I can afford)
Organization Vision
Be the leading innovator in developing and operating comprehensive services for older adults regardless of economic or functional status
Rationale
Mission
HolisticAddresses unmet needsPartners with the communityCompassion expressed through choice
Market
Community continuum targets 100%
Strategy breeds community support
Driven by community education—not selling
Business
Creates the structure to take risk
Provides new funding for the most expensive
Reduces fragmentation and waste
Six Tipping Points forFinancial Success
1. Maximizing Occupancy (Market Share)—MAY NOT BE POSSIBLE
2. Premium Pricing (Value)—MAY HAVE TO DISCOUNT
3. Lean Organizational Structure
4. Effective Capital Management
5. Optimizing Information Systems
6. Efficient Staffing
Best PracticesLost Revenue Reporting
• Definition—determines maximum revenue at full occupancy (100%) and identifies reasons for the vacancy (unit not ready for occupancy or Resident temporarily in another care level).
• Purpose—focuses management on financial advantage of small increases in occupancy.
Best Practices
• Consider alternate forms of fee increases (e.g., percentage versus per person dollar amount)
• Concentrate on superb resident communications
– Total costs of operations
– Market value of services
– Extra charges
Best Practices
• Implement an effective POS system
• Consider flexible dining plans that minimize meal credits
• Implement level of care pricing in Assisted Living
Best Practices
• Centralize Facility Operations to include Maintenance, Grounds, Housekeeping, Laundry, Security and Transportation.
• Schedule Kitchen staff so that cooks open and close.
• Empower Charge Nurses to lead Care Teams to serve specific Residents and consider returning nurse leadership to direct patient care on the floors.
Best PracticesCapital Management
• Boards should require that management provide annual reporting on projects against projections until stabilized.
• Repositioning should first focus on programming improvements prior to capital expenses (only when unavoidable).
Best PracticesOptimize Information Systems
• Wireless call systems which signal a pager
• POS system integrated with receivables
• Electronic medical record combined with service tracking system (i.e. CareTracker or DaRT Chart) , which helps maximize reimbursement under Medicare and case-mix Medicaid
• Eliminate time-consuming manual processes
Overall Staffing Targets
Target salaries and benefits to be around 40-45% of net revenues
FTEs by Level of Service
Unit TypeOccupied
Units
FTEs/
Occupied Unit
Total
FTEs
ILU 300 .33 99
ALU 60 .45 27
NC 60 .85 51
TOTAL 420 177
Facility Operations
• Target 50,000 square feet per maintenance FTE
• Target square feet per housekeeper
– ILU = 30,000
– Assisted living = 20,000
– Health center = 8,000
• 60 pounds of laundry cleaned per productive hour
Facility Operations
• Blend security and 24-hour maintenance
• Create a balance between technical, skilled and general staff
• Regularly evaluate contracted versus internalizing services
Dining Services
• Target meals per labor hour– Health care = 5
– Assisted living = 4
– ILU = 2 to 3, depending on type of service
• 40% of labor should be part-time
Dining Services
• Dining staff should clean all dining rooms and kitchens
• Nourishment costs should be charged to health care
• Implement Liberalized Geriatric Diet Manual
Environmental Services
Create schedules so that:
– There is only one housekeeper per apartment
– Housekeepers clean units on same floor or in the same area (villas/cottages) on the same day
– Detailed cleanings are incorporated into regularly scheduled cleaning times
Laundry
• Create drying capacity that is 150% of washing capacity
• Establish cart exchange system
• Maintain 5 turns of linen
• Close laundry on weekends
Hours of Care per Resident Day
Direct 3.0-3.5
Indirect 0.2
Non-productive 0.3
Best PracticesResident Centered Staffing
• Assisted living and health care—12-hours shifts (7 days in 2 weeks). Benefits
• Minimizes number of shift changes.• Eliminates shift overlap for CNAs.• Staffs the same number of people.• Provides consistency of staff. • Prefers full-time staff.
Best PracticeResident Centered Staffing Sample Schedule
OperationsFacility Benefits
• Reporting to the same people at the beginning and end of shifts
• Residents served by the same nursing staff increases consistency of care
• CNAs and nurses are on the same team and have the same days off, which reduces call-offs due to peer pressure
• Improved recruitment
• More staff to feed evening meals and return residents to bed
• Less shift-to-shift complaints—problems are easier to resolve with only two shifts
• Less wasted time for reporting with only two shifts—units are quieter at 3p
OperationsFacility Benefits
OperationsFacility Benefits
• Scheduling is simple—just fill in names each month and adjust for vacations and/or holidays
• Less complaints
– Working long stretches
– Too many weekends—12-hour shifts gives off every other weekend (Fri/Sat/Sun)
Employee Buy-InTime Off
More days off in a two-week pay period (e.g., 7 days versus 4 days)
Never work more than 3 days without 2 days off—3 day stretch is only once every two weeks
Employees have a long weekend (Fri/Sat/Sun) every other week
Employee Buy-InIncrease Control
• Can plan their schedules since the days off are known in advance
• Only need to use 24 hours of PTO to be off for 7 days at a time
• Feels more like working part-time with full-time benefits
Employee Buy-InImproved Resident Care
• Consistent full time staff
• Residents receive care from the same 4 CNAs and 4 nurses
• Increases productive hours of care due to elimination of shift change
Sample Operational Goals
SUMMARY OF SIGNIFICANT RECOMMENDATION REVENUE/ SAVINGS
COMPLETION DATE
Increase Revenues Increase meal prices to cover costs Renovate and market assisted living Increase Medicare payor mix and move unit
$ 20,000 150,000 920,000
January 2008 January 2009
September 2008 Improve Productivity
Make changes to management structure Convert to 12-hour shifts in Health Care Eliminate Nurse Agency Convert to 12-hour shifts in AL Implement changes to Housekeeping staffing Implement Dining Services recommended staffing
201,000 675,000 200,000 418,000 138,000 204,000
Ongoing
October 2008 June 2008
October 2008 August 2007
September 2007
TOTAL $2,926,000
Partner/Merge/Affiliate
• Stand alone, non-profit, long-term care will be even tougher
• Dress the Pig for Sale—including Lipstick
• Challenged organizations seek debt capacity, economy of scale, and management
• Strong systems seek strategic advantage and ROI
