Part 2—Long-Term Care & Senior Living Key Performance Indicators
CareWork Looks at KPIs: Census
This is the second in a series of articles exploring the importance of setting and monitoring key performance indicators (KPIs) in long-term care and senior living organizations. Throughout the series, we will explore KPIs specific to skilled nursing, assisted living, memory care, independent living, and CCRC in the areas of labor, census, finance, procurement, clinical, and quality and will discuss how your operations can benefit from setting goals and using your data strategically.
With this post, we are looking at census as a KPI category.
Census KPIs apply to long-term care and senior living but not all KPIs apply to each operator type. We will cover the most common KPIs. As you read, feel free to take the KPIs that apply to your operation and leave the rest.
Census as a KPI Category for LTPAC and Senior Living: Why is it important?
Census has always been a hot topic, but it has been on fire since the pandemic. McKnight’s 2022 Outlook Survey noted that census was a top concern for 69% of the CEOs surveyed. In light of the challenges faced in our industry, granularly managing the key performance areas that include census is essential.
Census touches every operational area from marketing and business development to staffing and quality. Census data can be broken down into a number of key performance areas and we will cover a few. First, let’s look at some reasons why census KPIs are important.
· Census tells you how many and what types of employees your community needs to have on staff at any given time. This ensures that you can provide adequate levels of care and resident attention.
· Census tells you what you should budget and spend on things like dietary expenses and other per-patient or per-resident day expenses.
· Monitoring the census can help identify gaps and failures in marketing and provide a guide to improve marketing efforts.
· In the case of SNFs, the average daily census drives CMS staffing level requirements to maintain the five-star rating, and some states have additional per-patient day requirements.
· Monitoring the census at a granular level (census by payor type, diagnosis and acuity levels, admission source, etc.) tells a story that illustrates what can be adjusted to increase occupancy and improve quality.
· Census affects financial performance. Outside of the obvious (we need to be occupied), failure to monitor the census and make proactive, data-driven decisions can lead to overspending and quality issues, which can negatively affect profitability.
Measuring Census Performance
Measuring census performance requires a base set of statistics and, although there is some overlap the data that should be gathered varies a bit depending on the type of operation. Census performance matters to skilled nursing, assisted living and memory care, and independent living operators alike, although the census performance KPIs are more intensive for SNF operations.
These statistics should be available in order to plot and plan your census KPIs:
· The total number of available beds or units
· The total number of residents currently in occupancy
· The total number of residents admitted and discharged today (12:00 a.m. through 11:59 p.m.)
· Each resident’s payor type
· Each resident’s diagnosis
· Admit date
· Discharge date
· Admission/Referral source
· Discharge destination
· Number of marketing inquiries
· Number of tours/site visits
· Number of admissions denied
· Reason for each admission denied
For many organizations, the data needed to measure census KPIs is housed in the electronic health records (EHR) and customer relationship management (CRM) systems. Organizations that do not have these systems in place might be gathering information manually. Wherever the data lives, these statistics should be compiled daily to use in census KPIs.
Percentage of Occupancy
Occupancy is probably the most common KPI in long-term care and senior living. Leadership teams and management staff all pay attention to this, whether or not there is a formal KPI management process in place, because occupancy directly contributes to net operating income (NOI). It’s important to note that occupancy levels alone may not make an operation profitable. No amount of ancillary services or other cost savings can make up for a too-low occupancy rate.
Percentage of occupancy can be used as a guide to spot trends in occupancy highs and lows so leadership teams can better plan for strategic operations. Do we consistently have a percentage of beds or units unoccupied? If so, should we resize or repurpose those units? Do we have seasonal fluctuations, and can we plan in advance to prepare? These are just a few examples of how watching the percentage of occupancy KPIs can help teams manage more strategically.
The percentage of occupancy should be reviewed often. It is calculated by adding the daily census of each day of the time period in review and dividing the total bed or unit count days. The total bed or unit count is the number of beds/units available multiplied by the number of days in the time period.
Average Daily Census (ADC)
The average daily census is a measurement (primary in skilled nursing) that can be used as a part of revenue tuning and forecasting, budgeting, and managing staffing level requirements.
Unlike the CMS regulations we touched on in Part 1 on determining staff retention and turnover, the formula to calculate ADC is straightforward. Total the daily census for each calendar day of the time period and divide the total by the number of days in the time period.
Each census day begins at 12:00 a.m. and ends at 11:59 p.m. Because Medicare uses the midnight census hour as a cut-off for determining a Medicare day, the industry generally uses this standard.
When a resident is both admitted and discharged in one census day, they are usually counted in the daily census.
ADC KPIs should include targets both for the overall average daily census and the ADC by payor type. Setting ADC targets may require input from multiple departments and should consider historical average daily census trending month-over-month.
Quality Mix (Q-Mix) KPIs
The quality mix, or Q-Mix, is the measure of the amount of revenue that residents generate for a skilled nursing facility. In today’s environment, where the median operating margin for skilled nursing operators is projected to be -4.8% for 2022, Q-Mix is a KPI measurement that every skilled nursing facility operator should be watching.
The quality mix is an average daily census target that is set by payor type category.
The total census is typically made up of residents in several payor type categories, but these can vary. Common categories are:
· Private Pay
The quality mix census is a specific census goal that is made up of the targeted ADC for higher reimbursement payor types. We talked previously about setting ADC targets by payor type. Depending on the operation, Q-Mix usually includes a combination of Medicare, insurance, and/or private pay residents. To determine the Q-Mix target, add together the ADC targets for the payor types you want to include in the quality mix goal.
Setting Q-Mix targets and monitoring them as a part of your census KPIs is critical to ensure that coverage and reimbursement meet the full requirements of long-term care costs.
In a blog posted by Experience.care, Brian Ellsworth, Vice President of Public Policy and Payment Transformation at the consulting firm Health Dimensions Group noted:
“If you have a 50/50 mix of Medicaid, Medicare, and you are heavily weighted in the length of stay by Medicaid – you can expect a 2.4% loss in revenue unless you have some type of special services…”
Tying revenue targets to quality mix objectives and consistently monitoring KPIs can help SNF operations teams manage the right mix of residents to ensure costs are covered.
Length of Stay (LOS) and Average Length of Stay (ALOS)
Length of stay metrics are used differently in LTPAC clinical settings than they are in non-clinical senior living settings. A longer length of stay in senior living is a positive performance indicator while skilled nursing facilities want to provide the care each resident requires for as long as they need it – no more, no less.
In all environments, having access to granular length of stay and average length of stay data helps you make informed decisions.
Independent living organizations might use LOS statistics coupled with average rent and average annual income in market feasibility studies for new development or acquisitions opportunities. Assisted living and IL communities can use LOS and ALOS trends for business development and revenue forecasting. IL and AL communities may also use LOS along with resident turnover statistics to improve resident satisfaction and measure retention efforts.
Skilled nursing facilities need length of stay data for more in-depth KPIs. LOS affects reimbursement and CMS uses LOS in the SNF QRP (Quality Reporting Process). LOS KPIs can be used as a guide to estimate the right length of stay for a successful discharge. Tracking length of stay by diagnosis and trending over time helps clinical teams avoid incidents that may have contributed to a too-short stay that led to negative outcomes, like readmissions. Keeping an eye on LOS and LOS metrics gives facility leaders a better idea of how quickly and effectively teams can improve resident outcomes and helps identify problem areas so they can be addressed.
Admissions Statistics in the KPI Strategy
SNFs should use admission statistics a few different ways as a part of the KPI strategy. These KPIs can spotlight adjustments that might need to be made to improve census performance.
Trending admissions by diagnosis might identify gaps and opportunities in business development plans. Do your referral sources know exactly what your SNF is capable of supporting? Are there areas in which you can identify settings that lead to higher profitability by partnering with referral sources on post-acute care for specific procedures that your care team is especially efficient in managing? Coupling this KPI with readmission data might also provide a useful guide for identifying areas of improvement through training and development. Is there a readmission commonality with a specific diagnosis like deep tissue injury or surgical wounds?
Tracking and trending admissions by referral source gives SNF leaders a good view of business development performance. Who provides better referrals and how can we foster that relationship? Are we missing referrals from a previously active source?
Denied admission metrics should be tracked and trended by denial reason so teams can easily identify missed census improvement opportunities and determine if steps can be taken to support them in the future. Do we see a trend in a large number of denials for a certain payor type? Have we medically denied admissions for a number of residents with the same diagnosis that we might be able to support through specialized training?
Watching these metrics closely will allow facility management teams to adjust in areas like training and development, marketing and business development, and payor types accepted, or acuity levels supported.
Business Development Metrics for Census Performance
Marketing and business development are important aspects of census growth. Analyzing metrics and trends allow you to set the right business development goals and the KPIs to manage them.
· Qualified vs. Unqualified Referrals: A large number of unqualified referrals suggests improvements can be made in communication with referral sources.
· Marketing Sales and Response Time: How long did it take your business development team to respond to a referral or lead?
· Appointment Ratio: How many referrals/leads turned into appointments or site visits?
· Conversion Ratio: How many appointments turned into admissions or move-ins?
Census Performance KPIs and Data Collection
KPIs are important for long-term care and senior living organizations because they help keep decision-making aligned with the organization’s goals. Census KPIs are particularly important because they affect every operational area: finance, procurement, labor, quality, marketing, and business development. Not only does the KPI strategy needs to be defined, it needs to be communicated with regional and community/facility management teams so staff members have clear goals and can own their own performance. From there, it needs to be measured regularly.
Building the census KPI strategy should include a review of historical data in each of the areas we covered in this article in order to set the right goals.
We mentioned earlier in the article that oftentimes the data you need to gather can be found in systems like your electronic health records (EHR) and customer relationship management (CRM) but not everything you need may be documented. If teams are not using CRM to document activities like tours, admission denials, etc., put a process in place to capture the information going forward.
While the data you need may live in these systems, it can be time-consuming to gather and compile the information you need to set KPI goals. Remember, you also need to pull this information frequently to monitor the KPI goals you put in place.
While not impossible to do manually, because of the level of effort, many teams stop monitoring many of the census KPIs altogether.
Here’s how CareWork helps
We take the manual effort out of KPI management. CareWork is the first holistic operational platform for long-term care and senior living operators. We automate the KPI management process across all operational areas, including census.
We connect the systems you already use, tie your data together, and give you a 360-degree view of census, labor finance, procurement, clinical, and quality using your combined information.
Now your management teams have exactly what they need to catch problems before they happen, work faster, and hit their targets – all in one place. Visit our website to learn how we can help you work more strategically and efficiently.