For senior living providers wanting to improve profitability, the most obvious solution is to increase both occupancy and the average resident length-of-stay. However, there is a second, complementary approach that is just as effective when it comes to delivering the desired business outcome: controlling (or even reducing) costs. An advantage of cost management strategies is that you have a reasonable amount of control over them.
While cost-lowering tactics cover many aspects of a community’s operations, the common denominator tends to be technology.
Controlling costs through on-demand services
A relatively new use of technology involves on-demand services using a smartphone or other connected technologies within your community. When implemented properly, a strategy that takes advantage of these services can expand a community’s offerings while simultaneously lowering the facility’s costs. For example, a community that staffs an onsite salon or spa service could eliminate that expense by working with an outside provider.1
For some communities, an added benefit of lowering costs through on-demand services is the possibility of attracting a new demographic. Such services may allow you to decrease some fees to make your community more appealing to consumers who otherwise would see the community as out of their financial reach.2
Ensuring that residents are well versed in, and comfortable with, on-demand technology can be fairly easily accomplished by:
Helping residents develop a comfort level with advanced technology can be expected to decrease over time as younger residents begin to move into a community.2 In fact, one study found that this shift is already taking place, with 80 percent of seniors using the internet and 13 percent visiting social media sites.3
Controlling costs by reducing insurance claims
For many senior living providers, the cost of insurance premiums and claims is significant. Although reducing claims is challenging, there is technology available that can greatly improve the safety of a community.
Wander management solutions are one illustration. Physical injury and emotional trauma can occur when a resident with cognitive impairment leaves a safe area. Fortunately, a connected monitoring solution can mitigate that risk. Other steps, such as putting new residents in rooms close to a nursing station and practicing wander alert drills, can be helpful as well.
Additionally, a leading cause of injury among senior living community residents is falls. Wearable emergency call devices that automatically detect a fall and signal a medical alert service or connect into a community’s call system can facilitate a prompt response and shorten lie times, thereby potentially helping to improve residents’ outcomes and possibly minimize insurance claims.
Controlling costs by focusing on resident wellness
Implementing resident wellness programs often can lower costs. These initiatives, like free flu shots and fitness programs, help residents stay healthy and can minimize the need for costly emergency interventions.
In fact, according to a survey by Flik Lifestyles, 78 percent of senior living communities are expected to offer advanced wellness programs in the next five years.4 These programs, which provide a tremendous benefit to residents and communities, can be fairly easy to launch as they often involve a partnership with an outside service provider that does much of the work to get the initiative up and running.
Controlling costs using “Big Data”
Senior living communities are increasingly leveraging the data they collect to inform and drive their business strategy. By using precise numbers rather than estimates, they can make well-informed decisions regarding many aspects of their operations.
For example, by analyzing actual data on the utilization of services, providers can decide whether it makes sense to continue with a particular offering. Similarly, by reviewing occupancy trends and revenue figures, providers can gauge whether it is advisable to launch a community expansion project.
Staffing is another area where accurate data can help senior living community providers manage costs by staffing their communities optimally. Big data can also illuminate what drives resident satisfaction; by finding ways to increase resident satisfaction, providers can increase critical “word of mouth” advertising.
Making cost control part of YOUR profitability equation
Although controlling costs is not easy, there are many ways to do it, especially using advanced technology. Several innovative Philips technologies can have a positive impact on senior living communities’ bottom lines:
Philips also offers additional solutions via some key partnerships that help keep residents well:
When communities take the time to look into their options for lowering expenses and increasing profitability, they may find that these goals can be accomplished more easily than they had assumed.
I would love to discuss any specific concerns you may have about cost containment for your senior living community. Please email me, call me, or visit my web page to learn more about how Philips may be able to help you achieve more cost-effective operations.