3 Fundamentals to Follow & 5 Pitfalls To Avoid When Considering Expanding Your Senior Living Offerings

by | Mar 25, 2021

By Nancy King, President of Senior Options; and Ben Unkle, President & CEO of Westminster-Canterbury on Chesapeake Bay

As mission-driven and not-for-profit senior living providers have had to weather the challenges of the last year, many Life Plan Communities are seeking new ways to expand their revenue streams in 2021 and beyond, and to serve more people beyond providing only service-rich housing. Adding services and revenue can help organizations attain the mass and scale required to give them the option to stay independent and be more secure during fluctuations in the real estate market.

For example, Westminster-Canterbury on Chesapeake Bay (WCCB) created an internal private-pay home care agency more than 20 years ago. But, it learned many hard lessons on its journey from losing $400,000 per year to earning $1.2 million annually from the agency. To capitalize on those lessons and help other non-profit senior living communities be successful in home- and community-based services (HCBS), WCCB started a shared services organization known as Senior Options to provide ongoing assistance with executive talent and billing services to senior living-anchored HCBS.

Senior Options has helped many organizations successfully start, or turning around HCBS. This is one topic of Love & Company’s upcoming webinar on March 31, “Beyond Our Walls: Opportunities for Expanding Life Plan Community Services,” which will share success stories of Life Plan Communities venturing into HCBS and Early Advantage Programs. To register for the 90-minute presentation and Q&A, click here.

Here, I (Nancy) will cover a few fundamentals of successful HCBS, and later, my CEO, Ben Unkle, will outline a few pitfalls to avoid when beginning HCBS.

Fundamental #1 – What’s your why?

Before any senior living provider tries to launch HCBS, the first thing we like to ask is, “What’s your why? Why do you want to do this?”

This is an important question because organizations have various motivations for pursuing these programs. Some want to control the quality of the care coming in and out of their buildings; some want to expand their continuum of care; some want to serve more people in their community and others simply want to add a new revenue stream.

Those are all good reasons, and most of the communities we work with note some (or all) of the above as their “why.” And we’ve found that having that question answered before really putting pen to paper helps guide the new program—and helps it best reflect the organization’s mission.

Fundamental #2 – Know your market

This is a topic that Rob Love (moderator for the webinar) discussed at length in the first article in this series, but I’ll reiterate it here because it is so crucial.

Simply put, this is a volume-based business. HCBS is a very complex business line, so if there isn’t enough volume in your market, it won’t be worth the effort.

As Rob noted in his article, this goes beyond typical market analysis:

“Looking at the market depth of age- and income-qualified prospects has its limits. This, of course, is because Medicare drives the home health portion of the market… Instead, what is most important to examine is the competitive environment, because in almost any market today, a lot of home care and home health providers exist. You’ll have to take market share away from existing providers.”

In Ben’s experience, tapping into market volume was key to the success of Westminster-Canterbury on Chesapeake Bay’s HCBS:

“We were losing $400,000 per year running private home care that only served residents on campus. We swung that by $800,000 to generate $400,000 in net operating income in two years just by going off campus and layering in skilled nursing. This really is a volume business, and if you don’t capture that volume, HCBS will not work for your organization.”

Fellow webinar panelist and President & CEO of Carolina Meadows, Kevin McLeod, also noted the importance of not just prospect volume in the market, but labor volume.

“Finding the labor pool for HCBS is so important,” Kevin said. “That’s our biggest concern, on top of the challenges that staffing a Life Plan Community already brings. For HCBS you have to find people willing to work off-hours and part time. Your geographical area must support the labor needs of HCBS if the program is to have success.”

Fundamental #3 – HCBS operations ≠ Life Plan Community operations

Running HCBS is vastly different than running a Life Plan Community that has its entire continuum on one campus. Not just in operations, but also in mindset. Organizations need to take an entirely different approach to HCBS. It’s not enough to simply “tack on” these programs to existing offerings.

“When you’re starting these programs, you can’t just dip your toe in,” Ben said. “It’s like you’re flying two separate airplanes at the same time, and those airplanes each need their own engines. They can’t share if they want to fly. Your HCBS really needs its own infrastructure to make it successful. It can’t be a side hustle—you need to dedicate the people, resources and time to keeping it on track.”

Now that we’ve covered the fundamentals to have in place before pursuing HCBS, Ben will share five key pitfalls to avoid when launching one of these programs. Some of these challenges he and the WCCB team experienced firsthand while getting their new services off the ground, and they’re all worth heeding.

Pitfall #1 – Insufficient administration and staff

Our biggest mistake, even as a $2 million organization, was not hiring sufficient administrative staff for our HCBS. You just aren’t going to get the proper operations in place with just one administrator, due to the complexity of these programs.

Nancy also advises strongly against giving the HCBS work to someone who already has a defined role at your organization (e.g., director of nursing or director of resident services). HCBS administration needs to be backed by full-time personnel who are experts in their functional areas.

Pitfall #2 – Lack of proper patient scheduling and coordination

HCBS requires a great scheduling system, both in administrative expertise and on the IT side. You need to coordinate and schedule getting people in their cars to come to campus, and to get your staff to homes. This is an effort that many organizations underestimate.

Pitfall #3 – Lack of billing and documentation expertise

With the operations of HCBS differing greatly from those of a Life Plan Community, this extends to billing too, which carries Medicare and legal implications. It’s simple: If you don’t have the proper expertise to run billing for HCBS, you could be headed for trouble.

Pitfall #4 – Mismanagement of remote care

With HCBS, managing the quality of care off-site is a notable challenge. Another difference from your on-site continuum is that with HCBS there are no nurses’ stations to monitor. How will you ensure that your organization upholds its reputation for care when that care is being administered in dozens of private homes and not your on-site suites?

Pitfall #5 – Neglecting upfront investment

With HCBS, you’re either in or you’re out. Are you going to invest for success?

“Are you planning to succeed or planning to fail?” asks Kevin. “Your team needs to come up with a plan for what success will look like—and what it will take to enable that.”

“Planning to fail is giving HCBS work to someone who already has a job to do,” Nancy reiterated. “Planning to fail is also neglecting to put in the full-time infrastructure that running HCBS requires.”

Fortunately, help exists when an organization wants to launch HCBS but may be concerned about one or more of those concerns above. Hiring a consultant or “super admin” is one way to go, as our partnership with Senior Options has helped immensely as it relates to home health, hospice and home care services.

“We have a team of 18 people for program administration with skill sets in all aspects: clinical, IT; it’s really a second infrastructure,” Nancy said. “We help providers assemble the team and find talent. I’m happy to be the ringleader of the circus!”

Finally, please don’t take this list of possible pitfalls as reasons to not even attempt to expand your Life Plan Community’s service lines. Don’t get me wrong: There is huge potential for HCBS, and it can be done successfully.

As your colleague in the senior living sector, I want to be sure you don’t fall into any of those traps when trying to expand your revenue sources. That’s why ensuring your organization has the infrastructure and experienced staff in place is so crucial.

I’m excited to contribute more to this discussion in Love & Company’s webinar on March 31, “Beyond Our Walls: Opportunities for Expanding Life Plan Community Services,” and if you have specific questions, the session includes a Q&A with myself, Nancy, Rob and Kevin. We hope you’ll join us then. Click here to register.

For more articles on HCBS and Early Advantage Programs in relation to the upcoming webinar, click here.

For more insightful articles from Love & Company covering the entire spectrum of senior living topics, click here.

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