Many providers in the long-term care profession still find themselves searching for a path to prosperity after the pandemic. The last several years have brought significant changes in consumer preferences, resulting in many markets having seen a decline in the demand for congregate living and a shift to home and community-based care and services. That said, there will always be a need for skilled nursing for those whose care may be too complex to be addressed outside a nursing facility. As these dynamics have changed, many providers are looking for ways to re-tool their operations, finding new approaches to leverage their experiences to capture optimal revenue streams and right-size their expense profiles to today’s operating realities. That’s where a skilled nursing operational assessment comes in.

Fresh Eyes – the Key to Skilled Nursing Operational Assessments

For many providers, the path to ensuring revenue optimization with both volume and rates, as well as identifying where cost-reducing opportunities lie, begins with a comprehensive operational assessment performed by a third party—fresh eyes, so to speak. When Health Dimensions Group® (HDG®) performs an operational assessment, we follow the prescriptive process laid out next.

Mobilization

All projects begin with a mobilization phase. During this phase, the clients and consultants work together to affirm milestones and deliverables while reviewing the information the consultants will need to complete the benchmarking and market assessment process.

Project mobilization is the official launch of the engagement and starts the clock on, typically, 90+ days of work to be completed.

Market Demand

HDG believes defining the market area is a crucial step to optimizing revenue. HDG determines the preliminary market area using information obtained in the mobilization phase, as well as a review of natural and geographic borders near the market, distance and drive times, and other factors that may impact the market area definition.

Market Assessment

An experienced HDG consultant will personally visit each competitor in the market to verify their number of units, occupancy, pricing structure, and overall competitiveness to your senior living campus. These site visits are crucial in validating both the quantity and quality of competitors to be used in the demand analysis.

In addition, HDG will inquire with each facility as to its market draw and if it has any plans for future development. HDG will also research planned developments in each market by using publicly available information and by contacting each city planning department to inquire about any potential development that may be competitive.

During the market assessment, HDG will validate the market area definition and analyze the demographics of the market area. The demographics will help identify the current population and five-year projections of seniors living in the market. This includes:

  • Characteristics of market area population, including current estimates and five-year projections.
  • Socioeconomic and demographic analysis of senior target markets, including elderly population, household growth, and household income.
  • Segmentation analysis of elderly households in defined market area by single male, single female, married couple, and other.
  • Review of workforce demographics, current and recent unemployment statistics in the area/region, and labor force participation rates for the state.

The combination of demographics and supply of competitors will be used to complete the demand analysis. The demand analysis will specifically identify the unmet or excess demand for senior living currently and five years in the future.

HDG then documents the findings and provides conclusions and recommendations in a full market demand and feasibility analysis report.

Financial Benchmarking

HDG will conduct a financial assessment of your operation, focusing on opportunities for revenue growth and cost savings. This includes:

  • Review of historical financial performance of long-term care and short-stay.
  • Comparison of service components.
  • HDG will analyze how your community’s cost per resident per day and/or staffing hours per resident per day compare to similar facilities and HDG proprietary benchmarks; this portion of the assessment includes:
  • Benchmark operational performance
  • Cost per resident per day
  • Full-time equivalent (FTE) comparison
  • Evaluation of current service mix, including Medicare and Medicaid.
  • Examination of current debt structure and bonding.

Based on the information obtained during this phase, HDG will identify your areas of competency and areas for improvement. For each area analyzed, HDG will utilize its operational benchmarks, experience in the management of similar facilities, and local marketplace intelligence to determine the potential for expense reductions and revenue enhancements. A detailed summary, including recommendations and their potential financial impacts on your organization, will be included, along with information to assess the viability of your organization moving forward if changes are not made to address opportunities or re-position operations.

Skilled Nursing On-site Assessment—Operational and Clinical

If your senior living campus is experiencing a lack of profitability or cash flow losses, we will look at the operational workings of key service areas to determine what is causing the undesired financial performance. HDG will look procedurally at the way in which services are delivered in order to determine the best course of action.

HDG’s assessment approach involves both on-site and off-site components.

The on-site audit includes individual and group interviews with key management team members and department directors to verify information and ascertain how operations are impacted by current protocols and systems. In addition, the site review allows the consultants to observe the provision of services and obtain an understanding of facility dynamics.

Within this phase, key factors to be assessed are:

  • Historical financial performance of your overall organization, as well as by functional area or department.
  • Current organizational structure: operating and clinical policies and procedures across departments and functional areas.
  • Interviews with key leadership to assess systems, perceived level of competencies, and organizational structure within the department and service line.
  • All components of the business office and overall revenue cycle process to identify potential issues that will prevent the optimization of revenue and cash flow, particularly regarding ongoing changes in the reimbursement landscape.
  • Previous six months of quality improvement (QI) and quality measures (QM) reports to determine facility quality metrics.
  • Staffing patterns and nursing organizational assessment.
  • Staff compensation structure, incentives, and insurance benefits, as well as retention outcomes and overall staff engagement and morale.
  • Contracted services review for those services with expenditures exceeding $50,000 annually.
  • Organizational and clinical readiness for value-based payment, with respect to current state of health care reform.
  • Staff awareness of clinical readiness and outcomes.
  • Census, admission process and function, roles and tools to support census development, admission/continued stay criteria, and efforts to optimize payor mix.
  • Staffing patterns for departments compared with regional averages and HDG proprietary benchmarks; the nursing clinical assessment will include:
  • Clinical staffing patterns
  • Workflow analysis and job functions
  • Pay practice administration compared to best-in-class approaches
  • Administrative clinical support
  • Electronic health record (EHR)/IT adoption and deployment

Rate Optimization Assessment

Concurrent with the operational, clinical, and financial assessments, HDG will conduct an onsite clinical reimbursement assessment within your facility, focusing on compliance opportunities for financial and operational improvement. The assessment will focus on the critical elements related to existing Patient-Driven Payment Model (PDPM) requirements, including:

  • Resident assessment instrument (RAI) and/or clinical reimbursement assessment for Medicare/managed care, Medicaid case mix, and activities of daily living (ADLs) reimbursement/documentation.
  • Minimum data set (MDS) hours calculation and advisement on the number of hours recommended based on census, admissions/discharges, and payor types.
  • Current roles and responsibilities of minimum data set coordinator (MDSC) to determine if they are consistent with best-in-class practices.
  • Managed care contracts.
  • Processes and systems with respect to Medicare and managed care compliance.
  • Staff’s understanding of processes and procedures.
  • Documentation standards for capturing data for proper coding.
  • Documentation charts with respect to PDPM and state case mix payment models, with emphasis on opportunities for revenue improvement.

HDG will also audit a random sample of Medicare claims from current year to date and one year prior.

Comprehensive Report and Performance Improvement Roadmap

Upon completion of the aforementioned phases, HDG will have the necessary information and completed assessments to develop a detailed financial and operational improvement work plan for your organization.

Clients will receive a comprehensive report illustrating the results of HDG’s analyses, along with recommendations and their associated financial impacts.

Specifically, the work plan will denote each area where financial improvement opportunities were noted, actionable steps necessary to achieve financial enhancements, timelines, any resource considerations, and, ultimately, the net fiscal impact for each noted opportunity. Where appropriate in the work plan, HDG will provide appropriate tools, benchmarks, and expanded guidance to support or guide recommended corrective efforts.

Contact Health Dimensions Group for Your Skilled Nursing Operational Assessment

Health Dimensions Group® (HDG®) has nearly 25 years of management and consulting experience with a vast array of clients dedicated to the successful delivery of senior living, post-acute, and long-term care. With a proven process developed through years of successfully operating senior living communities, HDG could be your solution to optimize revenue, reduce costs, and enhance your overall care and service.

We would welcome the opportunity to share more about our insights and capabilities. For more information, please contact us at info@hdgi1.com or 763.537.5700.