Kenyon Connects

Do you remember when you and a few others were the only ones in the home care business in your area? While there was competition, there was more than enough business to go around. In some areas of the country this remains true. In other areas, the marketplace has become saturated and agencies are losing market share and staff to the emerging competition. If you have a single line of business e.g. Medicare Certified Home Health, this could be a disastrous situation for the agency, particularly as the industry moves to bundled payments and decreased reimbursements. So what do you do to survive and thrive in this competitive home care environment?

The old adage “don’t put all your eggs in one basket” comes to mind. If your one and only line of business is Medicare Certified business, you are at the mercy of Medicare and the private insurance companies. In order to survive in the years to come, agencies, regardless of the current funding status, must develop additional lines of business. For the Medicare Certified agencies it may be time to develop a private pay, DME or an infusion line of business. All of these services are lines that match well with a Medicare business and have been traditional lines to expand to. Even these lines however are saturated in certain areas of the country.

We would suggest that every home care agency turn to it’s community and listen to what your community is asking for in terms of services. One of the best ways to do that is to keep a telephone log of all calls that come into the agency. (See attached log). Over the years we discovered that the log gave us incredible ideas for new lines of business that our home care customers wanted.

One such program was the home modification program. Occasionally the home care agency would get a call from someone wanting help with a ramp, or modifying doorways to accommodate wheelchairs or to lower counters so the newly impaired individual could be self sufficient in their homes. Initially I found my staff informing the caller that we provided medical home care only and did not provide home modification services. After a few months of reviewing and collating the calls from the log, we had sufficient number of requests for this service that we decided to develop a list of carpenters and contractors that were able to meet these needs. We could have started our own contracting service, but because of time constraints, decided to develop a referral list instead. One of my customers, however, developed the construction program and enjoys a nice side line of business from referrals given by the home care agency.

Additional options for a Medicare Home Health are the value added services such as negotiating a discounted rate with a drug wholesaler for all of you patients. The discounted rate would include home delivery. All patients would be given the opportunity to participate and continue after they leave the home health agency service.

Another option may be providing a medical alert system for all your patients or negotiate with some of the new smart phone service companies that are developing special services for elders that allow them to keep in touch with their family and to notify someone when they need help. With technology changing so rapidly, someone in the agency needs to be appointed to keep up with the latest changes so that the agency is able to offer these devices and services to their patients.

In order to survive the coming changes, diversification must be part of your home care agencies strategic plan. In addition to improving the critical outcomes and becoming masters at chronic care management, agencies must bring other value added features to the table in order to be able to compete for inclusion in the new bundled structures that are being created.

As with all changes, legal and structural considerations need to be made in order to make sure any added lines of business can function without constraints. It is recommended that any new line be established under its own business entity and not under the Medicare program. This will allow the new line of business to function without the constraints that Medicare rules impose on an agency. If you are offering a line of business that could be non-Medicare home care, check with your state to be sure about licensing such a program.

Surviving and thriving in this environment is possible if thinking can occur outside the “Medicare box”. It is time to gather the data, re-envision the agency, redesign the strategic plan and implement for the future.

If you feel you need assistance or guidance with such a project, call Kenyon HomeCare Consulting for consultation services. We are here to help.

The final area to discuss in making your home care successful is retaining the best staff and giving the best possible services. In order to do that you must have oversight and training that meets the educational needs of your staff and the health care needs of your clients. We have already discussed hiring in a previous article. If you have hired right, you have home care staff who will produce or can be trained to produce the kinds of outcomes that benefit the patients/clients and the agency. Critical to success for home care clinical services are systems of evidence based best practices. It is therefore imperative that you have a strong continuing education program and establish and maintain an agency culture of continued learning. Staff achieving continued learning as evidenced by attendance at continuing education offerings should be rewarded. Those who fail to maintain their competence and continued learning should have that reflected in their evaluations and subsequent pay increases withheld until they are achieving at the desired level. Without strong home care leadership support for this culture, staff will consider it the latest “flavor of the day” and slide back into old habits. The price to the home care agency is the eventual failure to achieve quality home care outcomes for your home care clients/patients with a subsequent loss over time of home care clients and thus revenue to your bottom line.

So how does quality home care look like? First it matches the needs of the clients/patients in your home care caseload and is evidence based care. If, for instance, you have a home care caseload with 80% of clients having some cognitive disability or impairment, then a strong in-service program on Alzheimer’s and Dementia would be expected. Since this is a predominate diagnosis among your caseload, all staff including the office staff should be trained in the diagnosis and there should be mandatory, yearly updates for all staff. Newsletters with the latest changes in practices based on new evidence should be regularly developed and distributed to all staff in addition to the required in-service training. In short, you want to develop a culture of continued learning among all individuals in the organization.

Secondly, there must be measurements in place that help you keep your organization on track. Quarterly chart reviews is one process implemented by some home care agencies to track and evaluate the home care services being provided. Supervisory visit notes with identified areas that were not at the agency standard and the corrections made by the Supervisor are part of the measurement system. Additionally complaint logs and incident reports are also traced weekly by the home care management team. On a monthly basis, the incidents and complaints are collated for similarities and trended for causes. Identified areas of concern that indicate failures in either the quality of the home care services being provided to clients/patients, or failures in customer services needs to be addressed with a plan of action for correction. These plans need to be in writing with evidence of follow up and resolution of the issues raised. Potential buyers will look for this kind of system to assure that the agency is focused on quality and has a system of identification and continued improvement.

Finally, the home care agency must have a strong quality improvement program that spans the entire organization, not just the direct home care services. Internal operations are as prone to breakdown and failures as the clinical areas of the home care agency. How does the payroll system work? Are there problems or issues with payroll? How are those addressed and resolved? What is the accounts receivable system and issues cause problems for the office staff? How are those addressed and resolved? Continuing education and training for the office staff in areas applicable to their duties is often an area overlooked and has consequences for the entire agency.

Communications in the organization is an on-going issue for all agencies. Open communications that invites input from everyone in the agency is a must. To achieve this one of the most successful systems is the “hallway huddle”. Each morning the office staff gathers for a 10 to 15 minute meeting to briefly state what they are working on and where they are having issues and need help. That way everyone knows what everyone is doing and where they impact or need to assist their colleagues. This is a hard practice to institute and maintain and requires management commitment. The long term benefits are increased staff satisfaction and productivity.

Every system, every person in the organization has a function and role in making the home care agency great and thus a great buy for a potential buyer. Invest in training and solid oversight systems and you will find the reward not only in a stellar reputation with your home care clients/patients, but when you are ready to sell your agency.

All of the issues raised in this article affect the value and potential sales price for your agency. As a result when we do a Due Diligence for a potential seller or buyer, we look at all the above listed aspects of the business. Weakness or failures in any one area can have a dramatic effect on the value of the agency. If you are planning on buying or selling your agency in the near future and could use our assistance, or just need to situate your agency for a future sale, contact us.