How Consistent Labor Management Improves Occupancy & Revenue

I like to keep things simple. And, I love to take my competition’s market share.

For me, it has always been about understanding that to take valuable market share and move to #1 in the market, you must have the best health care product in the market. It was all about being able to emphatically define my operational and clinical differentiators.

If you cannot identify the key differentiators that truly separate your skilled center from the competition, then what are you selling to the market? Do you know your competition well enough to know – not think, but know - that you have those distinct differentiators to take their market share? Many skilled nursing centers still expect the business to come to them. Many do not actually understand the concept of differentiators.

Most recently while I was the CEO of a post-acute health care network in one of the most sophisticated acute and post-acute markets in the country, I took my company from #4 to #1. I used this idea of key differentiators as my underlying driving force. It works!

What are your differentiators? Although this question is just one simplistic question, it can be one of the hardest to answer. When you qualify it by saying the differentiators have to be clinical in nature, it becomes even more difficult.

So, what are those differentiators? Let’s give this a try.

When I started as CEO of this post-acute health care network no one had any idea of what the market had to offer. Nor did I when I walked in. However, we quickly realized that there was an enormous opportunity to create this new network and offer it to 12 hospital systems in my primary markets. Wow, this was exciting!

But……..not so fast! Unfortunately, the portfolio of skilled nursing centers was a group of long-term, traditional skilled nursing centers. Good news -- they were all newly renovated and presented extremely well. So, I had to change them from “vanilla” centers to “post-acute.” That would not be easy as the operations were in slow-motion and the clinical product was marginal at best. Survey results were also marginal and inconsistent. The centers were under-staffed and had the wrong nursing mix. The nursing hours per patient day (NHPPD) were too low but adequate for more traditional care. Well, maybe not?

All of this needed to change this before I could begin the process of selling post-acute services and taking market share. I figured it would take about 12 to 18 months to make the transition, and it did.

Of course, sometimes as an operator you get lucky and something presents itself that just opens up new doors and leads you down the right road. For me, it was all about how I was going to change my labor component in order to deliver the level of services I needed both medically, clinically, and from a customer service standpoint. This would help us differentiate.

And who appears on the scene? It was OnShift and what was then their brand new electronic, scheduling software. Oh my gosh, they were the salvation. There was no doubt in my mind that I needed to add technology to my operation so I could staff effectively while at the same time save big dollars just in excessive overtime utilization. In this case, overtime = short staffing and too many openings. This then leads to continued excessive turnover which = marginal clinical performance and poor outcomes. Customer service was not even in the formula for success and the employees were totally disengaged.

I made an informed decision to immediately engage OnShift and their scheduling and labor management software. Our world changed literally  over a 90-day period. I never looked back. I saved several millions of dollars in overtime reduction. I re-invested those dollars back into the operations to improve my nursing hours per patient day as well as improve my professional nursing mix. It was a revelation to say the least. The clinical product improvements were dramatic and the survey issues were effectively minimized. Customer service and satisfaction improved.

Now I was ready to go out and take market share – both post-acute as well as long-term care business. And we did! We moved overall occupancy from 88% to 96% and doubled our post-acute skilled business to over 500 ADC. And, guess what? We moved to #1 in the market place.

I have to say that adequate and consistent staffing = increased occupancy, skilled mix, and big revenues. When I say this, I’m speaking from experience. I could not have come close to changing the staffing culture of the centers nor could I have done in 90 days what I did, without the help of OnShift.

Moving to #1 in the market place – those were some fun times! Consider how your approach to staffing and labor management can help you differentiate and become the best operator you can be.

Top photo by adamr from Freedigitalphotos.net