How SNFs Are Cutting Costs

June 29, 2018, Betsy Rust, McKnight's Long-Term Care News - As if managing the health of patients wasn't difficult and time-consuming enough, skilled nursing facilities now have to do more to manage their increasingly complex businesses as well.  Why?  To begin, revenue isn't rising at the same rate as expenses.

A large percentage of this swelling cost is related to staffing, which already represents about 60% to 65% of a facility's operating costs, according to a report about the industry's need to adapt.

Finding staff when the economy is good is challenging enough; there's an ongoing shortage of registered nurses, licensed patient nurses and nurses' aides.  Staffing for direct care, especially RNs, is also a key element in the Centers for Medicare & Medicaid Services' Five-Star Quality Rating System, encouraging operators to beef up staffing.

On top of this, SNFs are experiencing the census volatility that comes with short-stay post-acute programs.  Nursing homes and rehabilitation centers might be full one day and left below break-even occupancy levels the next, as short-stay patients discharge home.  Longer-stay patients are not helping to bridge the gap with so many other alternatives like assisted living and PACE available.

Finding efficiencies

To be successful, SNF operators must develop staffing models that help mitigate these census fluctuations while, at the same time, assist with recruitment and retention of key staff.  This is not a simple proposition.  How do you convince somebody to take a job when your model calls for a staff shift cut when beds aren't filled?

It's a whole new world out there.  Seeking cost efficiencies on a daily basis, cutting staff quickly but not too much, providers are in a quandary about how they can cut costs meaningfully without running afoul of staffing-related issues or the Five-Star Quality Rating System (particularly with the new Payroll-Based Journal (PBJ) system).

This is where benchmarking ........ CLICK HERE TO READ MORE