Change is happening, and it’s affecting the long-term care (LTC) and senior living industry in two key ways:
- The number of Americans over age 65 is expected to nearly double by 2030. Over the next 20 years, approximately 10,000 people will reach age 65 in the U.S. every day. This already is having a significant effect on our industry, and it will only increase over time. To add to that, senior living and LTC organizations are competing for market share, and newer players in the industry are redefining how care is being provided.
- The world of accounting and finance is going through its own generational shift. The accounting industry is moving to newer cloud-based technologies that make managing finances and running a business easier to do, which is great news for the LTC and senior living industries. Now more than ever, these organizations need to be able to understand how they’re performing against financial benchmarks and truly understand their financial health. The growth in demand for senior living services will be accompanied by growth in the amount of information to manage.
Some Typical Day-to-Day Challenges
Today, it’s not uncommon to see organizations working from disparate information systems that don’t efficiently communicate with one another. Many on-premises accounting systems can’t support critical operational reporting or metrics that key stakeholders need to make informed business decisions. These nonintegrated systems weren’t designed to properly capture the detailed business information that helps an organization operate smoothly.
Reporting is often done manually between systems on spreadsheets. Manual task-based activities can take up precious time and leave the door open for errors. Examples include preparing tedious schedules of statistical and financial information required for Medicaid and Medicare cost reporting or trying to manage accounts payable across all of an organization’s care centers.
As senior living and LTC organizations prepare for growth within the changing marketplace and conduct business in a more competitive and complex environment, they need to consider a finance and accounting platform designed to scale, handle growth and manage data from multiple locations and sources. In addition, they need a system that will produce meaningful information they can leverage to successfully run senior living or LTC operations.
So What’s the Cloud-Based Hype?
Here are the top seven features creating operational efficiency:
- Consolidated Reporting – Many providers struggle to get a clear understanding of how their business is doing across multiple entities, but with cloud-based accounting and reporting systems, organizations can get the same reporting package for all their facilities at one push of a button, saving time on monthly report preparation. In addition, they can provide real-time financial and operational information that offers the ability to run a report every day or on a frequent basis.
- Month-End Close Efficiencies – Newer cloud-based systems deliver reporting and accounts payable efficiencies. This can immediately result in month-end closes that can be anywhere from three to five days faster on average.
- Accurate Revenue & Profit Tracking – Management can easily leverage cloud-based financial platforms to more accurately see what’s happening in their organizations. They can conduct more robust and detailed financial analysis to quickly reveal the cause of emerging labor or expense issues. For example, these systems can break out revenue by payor mix and salaries by department and role with actual-to-budget comparisons across various dimensions.
- Dashboard Insight – Executives can closely monitor financials at any time using their own dashboards, which feature Performance Cards that show a snapshot of various key metrics like actual revenues compared to budget, revenue per bed and cash flows.
- Calculating Key Metrics – Reporting capabilities today bring significant benefits to the operations side of a business by allowing a finance team to import valuable industry metrics like “patient days” from clinical management systems. This allows organizations to calculate key performance indicators like “cost per patient day” (PPD).
Management can have increased visibility into monthly totals as well as trending comparisons to budgeted PPD amounts for each line item. With detailed operating statements for each cost center that include every revenue and expense category, organizations can more quickly monitor and address trends, e.g., a food cost that fluctuates more than expected from month to month.
- Budget Monitoring for Spending Efficiency – There are efficient and effective financial platforms today that can help provide more useful information to a business in a variety of ways. When leadership sees an item that’s over budget, they can simply click and drill down to the original invoice for more insight. Now organizations can understand what the numbers are telling them in an instant, without having to dig through multiple systems or file cabinets to find out what a certain expense is for.
- Integration with Other Solutions – Newer cloud-based systems offer connectivity, or application programming interfaces, with other important health care information systems used to easily allow the upload of data or provide an asynchronous exchange of data between the two systems in real time.
Having a tool that’s designed to accommodate today’s accounting requirements and easily integrates with other systems can provide a holistic solution to help meet your organization’s finance and accounting needs. If you have questions about your current technology situation or a cloud-based platform, contact your trusted BKD advisor.
For more health care technology insight, explore the articles and events included in our 2018 Health Care Technologies Showcase.