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.

Frequently we see agencies that have a good basic financial system such as QuickBooks or something similar that helps keep their financial data in a manageable format, but most do not go beyond that basic information. You will know your gross income, your net cost of doing business, and hopefully your net income. However there is a lot more information that you will need to really stay on top of your home care business on a weekly basis.

First of all you need to know what your cost of sales is for your home care agency. To accomplish this you will need to know the cost of all advertising, cost of your sales staff, the number of leads from advertising, the number of leads from your sales staff, and the number of leads or referrals from other referral sources. This information will allow you to analyze the data in a way that gives you the information needed to determine where your referrals are coming from, the cost of each of the referral streams, and finally the cost per lead generated. Keeping a good handle on your home care cost of sales is one of the biggest challenges in the home care industry and one that is frequently not quantified in a way that allows the home care owner/manager to really see where their marketing and sales dollars are spent and then be able to determine if that is the best way to spend those dollars.

Second you need to be able to track the number of home care inquiries/referrals and the percent of conversion. You need to target a conversion rate of between 70% and 80%. Additional to that data, on a weekly basis you need to know the number of active home care clients, the number of home care clients that discontinued services, and the net gain or loss of clients for the week. In addition, and probably more important for the bottom line is the number of hours lost and gained for the week and the value of each. It is possible to have gained 5 new clients and still have lost financially. If you experienced one lost client that was a 24/7 case and gained the 5 new clients that totalled hours less that the hours generated by the one lost case, the net to the home care agency is a loss, therefore you need to track both numbers.

Next you need to track your direct costs (caregiver costs). Be sure to include not only their pay and associated taxes, but their mileage and any supplies that you provide on a regular basis like their gloves. In addition to the direct costs, you need to tract recruitment and retention data; total number of caregivers paid for the week, number of caregivers hired, number of caregivers terminated, total number of caregivers in the pool, and the total number that are active. Some home care agencies also track the cost of recruitment and retention activities. By tracking all of this data, the home care management team will have a better idea of what their recruitment and retention activities are really costing the agency and again the ability to make decisions about where the home care agency should be spending their time and money. The final data collected in this section is the ratio of active caregivers to active clients. A good rule of thumb is to have at least 30% more caregiver time available than what your current client case load requires. That way you will always have caregiver time available to take on new clients without making them wait.

You must have good home care financial analytic systems that tell you where your business is and assists in projecting future growth. There must be basic systems in place that help you or your staff determine pricing, pay to employees, gross and net margins by line of business, cost of sales, conversion rates of inquiries, compensation packages for sales and marketing staff, in other words, anything and everything that effects the financial health of your agency. Agencies frequently develop a dashboard to assist with this element of managing your business.

If you feel you could use some assistance with creating financial systems or your dashboard for your home health agency call us at 206-721-5091 or contact us. We are here to help.

Most people acknowledge the importance of their Home Care Human Resources (HR), but fail to invest the time and the money needed to really support the department. For an agency to become successful, human resource must become a priority. Whom you hire becomes you to your customer.

To assure you are hiring and retaining the very best, here are several steps you can take:

1. Develop a profile that accurately portrays the type and characteristics of the caregiver you want to represent your home care agency. For instance, if you decide to specialize in dementia services, the characteristics of the caregiver are going to look different than if you are specializing in rehab services. For the dementia patient/client, you want a caregiver who is patient and calm; someone who can tolerate the same question over and over and softly redirect the client/patient when they become agitated. For rehab services, the caregiver needs to be more directive, encouraging, and supportive of the client/patients’ progress in their behaviors and words. So your profiles are going to be very different depending on the services you are offering. Once you have developed that profile, only hire to the profile. Do not make any exceptions!

2. Develop ads to elicit the right candidates for employment. Depending on where the business is located, there are several options for ad placement. If you are hiring home care aides, Craig’s list and Monster.com have been successful recruitment sites for some; others find their local papers give them the best results. Another successful resource for ad placement is a career magazine such as Today’s Careers, if it’s published for your location. If you are hiring professional staff, such as LPN’s or RN’s, there are several sites on line that specialize in health care professionals. Additionally you may be able to recruit you’re your local community college. Your local newspaper can also be a resource for ad placement for professional staff.

3. Interview for the behavioral traits and knowledge you desire. If you’ve run an agency or been in business for a while, you know that meeting the employees profile is just the first step. Of equal importance are the behavioral traits that the potential employee embodies. These are sometimes very hard to elicit in the interviews. We highly recommend using Steven Tweed’s Caregiver Quality Assurance test. You can find information at CaregiverQuality.com. The test is validated and assures accuracy of findings. Additionally, you will need to determine the knowledge base of the potential employee. There are several tests on the market place that can assist you. At Kenyon HomeCare Consulting, we have developed a 50 question test available to our clients to assist with determining the basic understanding of diseases and fundamentals of care. Additionally, the test includes a content analysis so you can clearly see what the caregiver understands and what they do not. The candidate must pass by 80% to be considered eligible to continue in the hiring process. This test and answer sheets can be obtained by contacting Kenyon HomeCare Consulting. By using the resources available, and having a well-developed two person interview process, you can be assured you are getting the best caregivers to meet the needs of your specific home care client/patient caseload.

4. Get your new employees off to a strong start with a thorough orientation program. Your orientation program is the first in an on-going series of continuing education to introduce your new employees to your unique home care client base. Because of the variances between agencies, the orientation program for one agency will look very different from another that offers different services. In addition to any service specialty run by your home care agency, the orientation must also include a review of both the federal and state rules (if you are licensed) governing your home care agency, your customer service expectations of your new employees, and the procedures for payroll, documentation, client confidentiality, emergency care, the agency disaster plan, and your requirement for continuing education. Your orientation should fit the specifics of your home care agency and relay requirements and education your new employees will need to successfully perform their duties. A yearly calendar of in-service training specific to the care needs of your clients is tremendously beneficial in helping achieve your care giving goals.

5. Establish and maintain proper employee files. A system to maintain up to date required documentation in each personnel file is an absolute must. All time-sensitive documents that expire, such as professional and drivers licenses, CPR certification (if you require it), evidence of current automobile insurance, and proof of on-going in-service training must be monitored and obtained to keep employee files current. Failure to maintain employee files can have consequences such as citations by licensing bodies if your agency is licensed, which can decrease the value of the agency.

The strength of the Human Resources of your agency can add value or decrease your agency’s value. Build it right from the beginning and maintain the investment in the future. If you are struggling on how to build the HR component of your business and need consultation assistance, contact Ginny Kenyon at Kenyon HomeCare Consulting.

Now that you have determined the business structure of your home care agency and identified the lines of business to be provided, systematizing internal operations is your next step in building value for your home care agency.  A solid infrastructure reduces expenses, creates efficiencies, and allows you to deliver exceptional care to your clients.

One of the more important internal operations elements is the software your home care agency selects to run the core functions of the business. Since this is a costly item, software selection is critical to the current and future value of the agency. A robust and powerful software should first of all have at its core a solid scheduling component that is linked to the client and the caregiver profiles, thus making matching caregiver to client faster and easier. Additionally, the software should accommodate a telephony component so that task or duty sheets and payroll and billing can be accomplished in one activity. The capacity, ease of use and productiveness of the software provides additional value to the company.

The software expenditure, however, can be nullified as a value to your home care agency if it is not used the way it is designed. Too often we go into agencies to do a due diligence for sale or purchase and find they have an excellent software product, but staff is doing “workarounds” because they want data or information in a different format. Workarounds are costly because they siphon off staff time that could be more appropriately used in other functions that are critical to the agency’s financial health. With the elimination of workarounds, clerical positions may be eliminated with considerable cost savings to the agency. Therefore, I highly recommend that you do not allow workarounds to exist. If a report is needed or data delivered in a different manner, discuss this with your software vendor.

Another basic infrastructure element is the makeup of your management team. The people you have in decision-making positions can either add or detract from the value of your home care agency. When a potential buyer looks at the company, they look at the human assets as well. The assessment of the human assets includes determining who has the decision-making responsibilities and how free the different positions are to make the decisions related to their areas of responsibility without owner oversight. Frequently, we find that the owner has retained the majority of the critical decision making. This is perceived as a deficit in value because when the owner sells, there is no one left in the agency with experience in making those decisions. Invest in your managers and give them decision-making authority over their areas of responsibility. Ultimately, this makes your home care agency more valuable.

Other important elements of your infrastructure are the payroll, billing and scheduling systems. If you have selected software with point-of-care capabilities and telephony, most of this will be accomplished electronically. This does not mean, however, that there does not need to be systems that validate the data. Data entered incorrectly or set up wrong, can create both billing and payroll errors. Most software systems have validation systems built into them. An effective software system includes validation systems.

To support your billing system, you’ll want a collection process. An ideal goal for accounts receivable will be no more than 45 days. To deliver on your accounts’ receivable metric – and keep your cash flow strong – you want an aggressive collections system with well trained billers and collection staff. An agency with extended accounts receivable is considered of less value due to missing basic fundamentals.

Finally, your intake process that receives requests for services and converts them to actual cases can make or break your agency. As a result, this particular position and the success of the person(s) filling this role are critical to your home care agency success and its value. Besides carefully selecting the intake individual, it will be important to provide ongoing continuing education on customer service, agency services and successful outcomes that the intake staff can use when selling the services of the agency to prospective customers. With a successful intake department and a system of continuing staff education, the value of your home care agency goes up.

Developing a solid infrastructure can be daunting and seem overwhelming, particularly when you are trying to manage all the day-to-day events that impact an agency. If you are struggling with development of your infrastructure for either your Medicare or your private duty agency and are not sure where to begin, contact us for a free 30-minute consultation. We’re always happy to lend a hand.

It is my distinct pleasure to introduce Ken Accardi with Ankota software, who is our guest writer this week.  I think you will find his article helpful and thought provoking.  This is good advice from an expert in the know.  Enjoy!

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When you acquire technology for your home care organization, you need to consider a five year life for the technology. As such, it’s necessary to anticipate how care delivery will change in that timeframe and choose technology that prepares you for the future. Some changes in your care delivery operations are merely evolutionary changes. Examples of this are new OASIS forms and new coding rules. While I’m not implying that these aren’t difficult changes, they don’t represent the need for a fundamental shift in the technology systems that you use. By contrast, other changes are revolutionary and may require fundamental shifts in your technology needs. Continue reading “Include Care Coordination in Your Next Home Care Technology Upgrade” »

Now that you have established the fundamentals of your business as we discussed in Home Health, Home Care, Hospice: Get Your Agency Off to a Successful Start, the next step in creating your new business is customizing your business growth plan in order to stand out among your competition. Customizing your business gives you the opportunity to differentiate your company by the lines of
business you offer and perfect.

Some agencies, because of licensure, will feel they have limited choices, e.g., Medicare home health and hospice does limit to some extent, but even some of those agencies specialize in rehab, others in palliative care, etc. So, even with the most restrictive of licenses there is still an opportunity to differentiate yourself. Continue reading “Differentiate Your Agency for Greater Success” »

When we start a new home health, home care or hospice business and are experiencing the excitement and exhilaration of the new venture, we seldom remember that we are building beyond the near future. We are also building for the time we retire and/or sell our agency or have a succession plan to pass it to our children. The best time to think about what your home health, home care or hospice agency will be worth is at the very beginning.

When starting up any business, the business fundamentals — matters that must be tended to before you do anything else – need to be hammered out first. Continue reading “Home Health, Home Care, Hospice: Get Your Agency Off to a Successful Start” »

We hear a lot about “quality of care” in home care, home health and hospice, but seldom is it defined in terms that allow us to quantify what it really means or what it looks like. “Quality” is both objective and subjective. One method of measuring quality is by outcomes, yet even those have subjective elements. So, how do we determine quality? What are the solid elements that will tell us we have quality?

Simply defined, quality is what our home health, home care and hospice customers and payors tell us it is. Expectations drive the quality issue. Since expectations can be broad based on who is defining them, how do we set a list of quality indicators that meet the customer’s expectations? Indicators we can measure.  Continue reading “Quality of Home Health Care: Luxury or Essential?” »

You’re likely familiar with concierge services as they relate to the hospitality industry. But, concierge services for private duty agencies? What are those? Concierge is a French word that means caretaker or guardian, so private pay concierge service implies a comprehensive plan that takes care of everything for the client.

A good example of a concierge program would be a day surgery service. The service can be designed any way the agency chooses, but must address all the needs that the client may have before, during and immediately after the surgery. Usually the best source of information when setting up this service is the client. Additional sources of information would be a brief survey in a surgeon’s office or you or someone in your family may have experienced day surgery yourselves and know what is needed. In my research, I’ve found the biggest issue for clients having day surgery is the need to have all the details attended to so all they have to deal with is the surgery itself. This may mean the agency picks up the client at her home or the airport, transports her to the surgery suite, and arranges for after care, which would include picking up all the medications, arranging a place to stay, if necessary, and providing 24-hour care until she can manage for herself. However you gather your information, it is critical to develop a program customers perceive as valuable and are willing to pay for. Continue reading “Private Duty Concierge Services: Tips for Developing Your Own Concierge Service” »