Residential aged care providers are faced with wafer thin and diminishing margins; and in some cases losses.
Every facility must maximise each revenue opportunity and avoid revenue leakage to be sustainable. Diligent ongoing scrutiny, accessing independent specialist advice and ensuring staff have the relevant knowledge and skill-base is mandatory for your business to survive and succeed.
Make sure you leverage expertise from all levels of the business and to look at each facility in its own right to achieve optimal revenue outcome.
Seven things providers should be doing right now!
- Have an independent accommodation market appraisal done
There is a market for everyone; you just need to find your niche. An independent market appraisal will determine optimal accommodation price for your service offering in its market.
Accommodation is often undervalued and under-priced. Validate the accommodation offering and identify the appropriate price point in the market. Seek opportunities to increase the value of the accommodation.
Use external independent expertise to do this and update this quarterly, or six-monthly at a minimum.
- Identify your optimal financial profile for resident mix
Based on market conditions (real supply and demand constraints), demographic and socio-economic profile of the catchment area and the capital finance requirements of the facility identify the optimal financial profile for your resident mix.
Understand the impact of changing this.
- Provide innovative additional services
Older people deserve a little luxury!
The current trend is for fairly generic ‘bundles of services’ such as Foxtel, newspapers, TV, phone, afternoon teas, happy hour, and extra bus outings. Typically poorly articulated, there is not much setting providers apart.
Instead, spoil your residents with cost effective additional services that are valued by consumers (and families). Involve residents, families and staff and see what you come up with.
- Know and articulate the value proposition
Provide training and support to those involved with tours and sales ensuring they understand and can articulate the value proposition.
After that we can talk about the rest of your staff – a sales culture is vital across the board.
- Get advice on presentation and follow it
Having set the accommodation price this needs to be obtained on each and every occasion.
Maximise the desirability of your product offering; present the accommodation well and be confident of its value.
- Address the barriers to full occupancy
Occupancy is often hijacked by inhouse inefficiencies and bureaucratic processes!
Each day a bed is unoccupied is ~$250+ of lost revenue with limited reduction in cost. Understand the barriers and enablers to achieving full occupancy – maximise the enablers and address the barriers.
- ACFI is simply writing the bill for the care you provide – so make sure everything counts!
Ensure all staff understand the relationship between acuity, workload and ACFI.
The implementation of clinical information systems enhances the opportunity to look for patterns and characteristics that can be used to identify when an ACFI review would be beneficial. This is the way hospitals have been using Casemix funding for many years to achieve an uplift.
Commit to exploring each of these points and determining the optimal approach for each of your facilities knowing that there is no “one size fits all”. If you need assistance in relation to any or all of the above we are always happy to have an initial conversation and help you determine the best approach for your organisation.