Qualified controllers are vital to long-term post-acute care (LTPAC) organizations. Yet, LTPACs face new challenges on multiple fronts today and will operate amidst a sea of continual change in the years ahead. Though today’s controller already has plenty on his/her plate, the next-level controller must be equipped to do more.
In this blog, we explore several reasons why next-generation thinking and execution is essential for LTPAC controllers—and what the benefits are.
So, why exactly is higher-level performance by LTPAC controllers needed?
External industry changes that threaten organizational viability. COVID-19 certainly has been the most pressing and persistent challenge thus far in 2020, and as of this writing, the pandemic has shown no signs of fully abating in the U.S. As a consequence of this, occupancy rates at LTPACs throughout the country have bottomed out, and caseloads also are near historic lows. Elective surgeries have been postponed, families have been keeping loved ones at home and even pulling them out of institutional care in an effort to keep them safe. In addition, infection control – i.e., effectively managing the resident population to keep everyone safe and healthy, and to minimize liability and risk – is a huge challenge today, and will remain so moving forward. Collectively, these and other issues must be reckoned with; if they aren’t, organizations could find themselves facing existential crises.
New payment methods and regulations. On October 1, 2019, the Patient-Driven Payment Model, or PDPM, went into effect. Likewise, on January 1, 2020, the Patient-Driven Groupings Model, or PDGM, went into effect for home health agencies. PDGM relies heavily on diagnosis coding, OASIS data and other pertinent patient data to categorize payment periods into relevant payment categories. PDPM and PDGM both directly impact reimbursement; it’s vital that controllers understand these models in detail and how they impact reimbursement. (For more on PDPM and PDGM, see Essential skill #3 in Chapter 3.)
The increasing relevance of technology in traditional controller duties. Technology permeates every facet of our lives, from our businesses to our homes and the places where we eat, shop and play. While technology alone cannot fully replace human experience, insight and critical thinking, it increasingly is used to automate business functions that otherwise inhibit productivity and efficiency.
For your LTPAC finance department, it’s crucial that electronic financial systems are configured to meet your department’s specific needs; that they integrate properly with accounts payable, vendors and other stakeholders; that custom reporting capabilities are being properly used; and that the system overall is being utilized to its fullest potential. This helps to eliminate manual tasks and frees up controllers and other department employees for, hopefully, higher-level duties.
Also residing within the realm of technology is data analytics software. Today, many of the post-acute care industry’s larger players already utilize analytics solutions in ways that make them truly data-driven organizations. Whether or not you currently have the financial resources or infrastructure necessary to purchase and utilize such systems, the industry trend is clearly moving in this direction, so today’s controller should be researching the topic carefully with an eye toward future integration.
For now, many LTPAC finance departments are able to effectively capture and analyze key data through use of Excel or similar spreadsheet programs. As long as you can build tables and use macros, data analytics can help develop census projections, find ways to manage and maneuver cash inflows and outflows and drive other efficiencies.
Cash flow and cost containment priorities. Beyond top-line issues such as revenues and program development, financial performance today depends largely on non-finance-controlled functions such as admissions and clinical, as well as cost containment. Next-gen controllers should deep-dive into resident population data in order to answer questions such as:
What are relevant trends in outcomes, and how do those measure up to internal and external benchmarks?
What are service trends we should consider?
Who is being served by our organization? What do the demographic data tell us?
Are we able to compete in the marketplace?
How should we be gearing our organization from a capabilities standpoint?
Controllers and their LTPAC organizations must recognize the challenges they face and meet them head-on. Those that do will reap significant benefits:
Fresh thinking and approaches toward cash flow and cost containment can boost revenue from previously untapped sources.
Planning and execution that is based on the intelligent and informed use of data and technology will likely be destined for success.
Optimal organizational performance will help attract best-of-breed candidates across the board.
Strategic thinkers and thought leaders in the finance department will add unprecedented depth of value to the executive leadership team.