by Rob Clark, Managing Director of Management Services, OnePoint Partners
Rob Clark leads Management Services at OnePoint Partners. OnePoint provides strategic advisory, financial analysis, capital strategy and development advisory services in the senior living field. Rob’s experience has both depth and breadth in the for-profit and not-for-profit sectors. He has provided analysis and consulting services for hundreds of senior living communities.
OnePoint Partners and Love & Company share a similar philosophy in their approach to senior living consulting and have partnered for various projects for many years.
Expenses are up. You’re pretty sure you are already running a tight ship. How do you identify opportunities to increase revenue and control costs?
Learn More Insights on How to Increase Revenues and Control Costs in 2023
View our webinar, “Overcoming Inflationary Pressures: Strategies to Increase Revenue and Control Costs in 2023,” to hear additional insights from Sara Montalto, Love & Company’s SVP of Strategic Services, Rob Love, Love & Company’s President/CEO, and Rob Clark, Managing Director of OnePoint Partners, as they explore several opportunities to positively impact margins in 2023.
‘Sharpening Your Pencil’ Won’t Be Enough
The current pressure created by rising costs requires digging past surface-level reactive strategies to get to the root of challenges.
For example, staffing is an ever-present challenge and, by necessity, managing scheduling takes a lot of time and attention. But is it primarily a reactionary focus, just playing whack-a-mole with staffing issues day by day? Stepping back and taking a broader, deeper look can reveal opportunities to make strategic changes with the potential to positively impact revenue and expenses.
For example, embracing technology can make staffing easier. A staffing app like OnShift or ShiftHound can eliminate the time nursing directors spend every day struggling to fill shifts and even filling in themselves. That time can be spent building relationships with unpaid referral sources, training, interacting with resident families or mentoring newer employees–all of which directly impacts resident satisfaction and the organization’s star rating and translates into more referrals and managed care contracts.
The cost of overstaffing is higher than it was pre-Covid. Often, when looking to cut costs, organizations can focus on maximizing care efficiency and may not recognize that they are carrying bulk on the leadership side or experiencing inefficiency in back-office roles.
Looking for blind spots can yield big savings. In one Midwest community, we helped a client realize a $1.2 million reduction in staffing expenses annually by rolling out initiatives that greatly reduced reliance on overtime and agency staffing.
Maximize Your ROI From Marketing
Covid taught hard lessons about allocating and managing budgets in sales and marketing. When move-ins were limited or nonexistent, some communities cut back on marketing while others reallocated and increased their budgets.
At the same time, they learned that ROI on digital tactics could not be judged by the more easily correlated results traditional tactics yield.
A OnePoint Partners client in the Northeast, a regional provider of assisted living and memory care, had a marketing budget that had been heavy in direct mail for years. A multifaceted analysis of ROI on all tactics led to a reallocation of the budget and resulted in thousands of dollars of monthly cost savings and increases in lead generation. Frequent review and adjustments to budget allocation are critical in striking the most productive balance, particularly with regard to emerging and rapidly changing tactics, like digital advertising.
Keep a Pulse on the Market
Is your competitive analysis current and comprehensive? Do you have new competition? It’s important to know not only what your competitors are charging for their product, but also being familiar with their products and how they are selling them, and making that information the basis that informs your rate discussion.
Even the best sales consultants can’t sell a product that isn’t positioned and priced correctly. Undertaking an objective, critical comparison to your competition will tell you if your units are overpriced and causing a census problem or underpriced and you are leaving money on the table.
Is Culture Holding You Back?
Among companies that are not experiencing staffing issues, the common denominator is company culture. Developing a positive culture is not a quick fix. It demands time, effort and dedication. But the rewards are many. Decreasing turnover and reducing hiring costs directly benefits the bottom line and the resultant improvement in resident engagement means more referrals and reputation enhancement.
Is Everyone on the Same Page?
Are there issues that everybody knows about, but no one is discussing? Talking to department heads one-on-one will uncover them. The problems don’t always reveal themselves on a spreadsheet, but they do affect the bottom line.
Leaders can’t manage to meet expectations if those expectations aren’t clearly laid out and universally understood.
Medicare & Medicaid: Is Money Being Left on the Table?
Cost reports can affect Medicare rates and Medicaid reimbursement. Some states base reimbursement on acuity and, if you’re operating in one of those states, it’s critical that cost reports are accurate and compliant.
Frequent training on MDS Coding pays off. New, changed and deleted codes are issued yearly, and code updates are issued quarterly.
Realistic, Accurate Benchmarks
Are you using raw food cost benchmarks from 2019? How often do you update the data points that underpin your budget? The benefit to building budgets using realistic benchmarks is that they’ll produce more accurate budgets and engender buy-in from the leadership team who will be held accountable to them.
The CEUs That You Don’t Get Credit For
Groups like LeadingAge, AHCA and Argentum, industry publications, and webinars and conferences are all invaluable to staying informed and engaged with senior living best practices and innovations.
For company leadership, the most effective tool in the toolbelt can be the ability to keep an open mind. Being receptive to new ideas and approaches even where they contradict current practices cuts through many barriers to making changes and has proven to be the most significant indicator of success for organizations in managing their revenue and expenses.