5 Ways To Improve Your Skilled Nursing Facility’s Net Operating Income (NOI)
In 2019, as a Skilled Nursing Facility (SNF) owner/operator you endured the endless preparation for PDPM, the countless binders satisfying the requirements for your ROP Phase 3 programs, the uncertainty of AB5, oh and let’s not forget those staffing waivers. If you’ve made it to the other side and found yourself smiling when you imagine selling your facility, let’s just pause for a moment and celebrate what you and your staff have accomplished.
If you still imagine yourself sipping a Mai Tai on a tropical beach then let me point out that the best time to sell is not when you’re frantically looking to exit, but rather when your Skilled Nursing Facility’s Net Operating Income (NOI) demonstrates a well performing facility. While there truly is a buyer for every Skilled Nursing, Assisted Living or Memory Care facility, if time is not a factor in your decision, then I’d encourage you to take a few months to focus on your bottom line. Here’s five ways you can positively effect change in your facility, and improve your NOI:
- Focus on your top line – Be honest, when’s the last time you reviewed your managed care contracts? Has the acuity of your residents increased, yet your outdated contracts pay you the same rate for one IV medication, or four? If you’re not tracking when your renegotiation window comes up, or seeking increases for clinically complex residents, then you’re leaving revenue on the table. If your clinical team is providing complex care, develop relationships with your managed care case managers and request authorizations for the next level available in your contract, or exclusions for expensive medications and/or DME equipment.
- Strengthen your MDS team – If your facility accepts Medicare then I encourage you to invest in a strong MDS nurse. The MDS is the window to your facility’s outcomes with PDPM, Star Rating, QASP and a myriad of other externally driven data models pulling from their reports. These nurses must be able to glean from the hospital H&P the best diagnosis to code. If they accurately capture the care that was provided at the acute, it can increase your daily rate.
- Hospital Readmissions – Readmission rates aside, if your noc shift/weekend supervisor is not confident in assessing residents and addressing change of conditions in place, with the resident’s physician, then you will undoubtedly bleed census. Take the time to move staff into the proper roles/shifts, implement assessment tools such as SBAR, and celebrate nurses whose leadership fosters confidence and decisiveness in those moments of uncertainty.
- Marketing is more than answering the phone. Have you called your skilled nursing, assisted living or memory care facility recently during stand up or shift change? If it takes more than a few rings for your staff to answer, you’re missing opportunities. More importantly, have you recently asked a random employee to give you a tour? Every team member should be able to give a tour and identify what makes your facility special. While not every employee can rattle off the details of how you’ll collect share of cost, families are concerned about whether their loved one will be received warmly and cared for, will observe whether staff greet them as they walk the facility, and how professional their tour guide was.
- Know your expenses – If you’re not reviewing your profit and loss (P&L) statement monthly and sharing it with your department heads, you’re missing an opportunity to hear creative ways to save money, and get buy-in from those team members who should be your gatekeepers. Your employees know which vendors provide quality supplies, food products, and services. Seek their feedback and consider changing vendors if the premium price you’re paying doesn’t reflect in the consistency of the products or the outcomes of the services provided.
Finding creative ways to turn key staff into “champions for change” will supercharge your bottom line and have your facility market ready in no time.
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