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Long term care conundrum – how to improve occupancy & utlization

Long term care conundrum – how to improve occupancy & utlization April 9, 2014Leave a comment

Marketing, research and business development consultant in healthcare, human services and senior living.

Occupancy is down – but there are marketing solutions!

US nursing center state occupancy was down to 83.1% in 2012 according to the American Healthcare Association.[1]

And the significant data from NIC[2] for many metropolitan statistical areas reflects this occupancy pressure as well.

occupancy-metro-NIC

What is behind this? Aren’t we supposed to be awash in seniors – a “grey tsunami”?

We will experience increased demand as a result of the Baby Boom generation, but not for another 5 – 8 years. So until 2019, we’re in for a difficult time, and some providers will not survive. This is simply the dynamics of supply and demand at work. The same phenomenon is occurring in hospitals and virtually every other age-qualified market.

The reason is because of what I have labeled the demographic dip, or birth dearth, that occurred from 1925 – 1945 (think Dust Bowl, Great Depression then WW II – that’ll squelch any libido).

So there are millions fewer persons reaching 75 because there were millions fewer born.

With a declining market, what can LTC providers do?
With a declining market, what can LTC providers do?
  1. Fortify protect and defend existing market share: Build loyalty – keep the market share you have by managing toward LOYALTY rather than satisfaction. As I have written and spoken about extensively, “satisfaction is cheap – Loyalty is priceless”. But most managers simply don’t know how to manage for loyalty, but manage so everyone is happy – they’re not the same! The difference can be critical if it means the difference between staying alive and going out of business.
  2. Efficiency – with growing pressure on payments and margin, this is the time to get serious about improving the efficiencies in long term care. Most grocery stores have more sophisticated systems than nursing centers – and I am not referring to paperwork – but to operating efficiency. Sixty percent or more of every nursing center’s budget is labor, yet SNFs do not treat labor as a critical strategic asset. Efficiency improvements ARE NOT staff reductions, but improvements in the outputs (the work performed, the tasks accomplished). Most nursing centers and the systems at work in them do not measure outputs!
  3. Innovation: with managers in long term care centers and operations under so much pressure, it’s difficult to expect them to innovate while they’re keeping the wolves at bay, yet this is exactly what is needed. A terrific example is care for persons with Alzheimer’s and related disorders. We are still “caring’ for these persons and their families the same way we were 15 years ago!
  4. Differentiation; How could a daughter in law tell the difference been your center and the one down the street? You may be practiced at what you believe the differences are, but in most cases, the differences are miniscule, and your prospects cannot differentiate.  I know, because we’ve done the mystery shopping! For example, in the key area of programs and service for persons with Alzheimer’s and related disorders, what is your brand? How does it stand out?

These are not radically new ideas, but are proven methods to weather market downturns. Please challenge or ask further questions – you have a lot to teach me!

Irving can be reached directly at istackpole@stackpoleassociates.com and +1-617-719-9530  Mobile & WhatsApp

istackpole@StackpoleAssociates.com
www.StackpoleAssociates.com

The Science of Services Marketing


[1]  Source: http://www.ahcancal.org/research_data/oscar_data/Nursing%20Facility%20Operational%20Characteristics/OperationalCharacteristicsReport_Mar2012.pdf

[2] National Investment Center; accessed: http://www.ltlmagazine.com/article/sn-foccupancy-rates-stable-sacramento-calif-leads-growth-markets

Marketing, research and business development consultant in healthcare, human services and senior living.

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