Skilled nursing and long-term care providers need to provide quality care and still maintain financial performance.
Long-term care is a challenging industry. Competitive care options like in-home care, fluctuating resident and payer mix, changes in reimbursement policies, increases in federal and state regulatory requirements, and staffing shortages have made it difficult for providers to balance quality with financial performance. The cost to provide care continues to go up.
In today’s environment, is there a business case for quality?
A study published in the US National Library of Medicine and the National Institutes of Health says there is.
The study found that producing high-quality care may allow nursing homes to become more efficient or have higher revenues due to higher quality. It also noted that quality is key to the successful implementation of a financial strategy.
When outlining a financial strategy, providers should consider a data-driven analysis and incorporate the right tools to put the plan in motion.
Compare areas and departments that show fiscal strengths and weaknesses. See if what is working in one area can translate to another. Build standardized targets that will allow you to measure success across the organization and track them regularly.
Examine resident data. Know your payer mix. Review resident volume versus payer type, scrutinize delinquent and overdue accounts and implement strategies to improve your day’s sales outstanding (DSO).
Prevent turnover. Prevention starts with awareness. Know your turnover and retention rates in every department and ensure your leadership teams are incented to retain their employees. Focus on case management, staff relations, and incentives.
Benchmarking is an effective tool that allows you to compare a facility’s financial health to another. Analyze your facilities and departments against state and federal averages and set internal performance markers. This will enable you to quickly uncover opportunities for improvement, diagnose problem areas, and implement solutions.
To improve quality and keep costs low, providers should first take a look at their processes. Improved care processes can lead to greater productivity and lower costs because the facility can prevent negative outcomes. Savings in treatment costs associated with negative outcomes can overcome additional staffing costs related to improved care processes.
Offering residents additional value-added services may also attract more residents and/or a better payer mix. This process could be viewed as a potential differentiation strategy, which could lead to better financial performance.
Good processes result in better quality, which leads to better financial performance.
It stands to reason that worse quality outcomes result in lower financial performance. CMS initiatives over the years have strengthened the case for quality by tying revenues to quality efforts. Hospitals are incentivized to develop preferred SNF networks with the goal of referring patients for post-acute care to skilled nursing facilities with better processes and outcomes of care.
Value-based purchasing payments link provider payments for Medicare to improved performance and holds providers accountable for both the cost and quality of care they provide. Organizations have a financial incentive to improve quality outcomes to avoid financial penalties.
Higher quality does not have to lead to higher costs. Quality improvements achieved through efficiency improvements could result in fewer defects, reduced waste, and a reduction in duplicate work leading to a reduction in the cost of delivering care.
CareWork gives providers simple-to-use tools to measure financial, quality, census, and labor so teams can create and execute data-driven strategies. We take the information you need from the systems you already use; help catch problems before they occur, avoid duplicate work, and hit targets.
Ready to use your resources strategically and improve your financial performance? If so, contact us today.