According to a September, 2017 press release from NIC, the most recent skilled nursing occupancy rate is 81.7%. Can you beat the odds?

By Steve Moran

A few weeks ago I attended the PointClickCare (a Senior Housing Forum partner) user conference in Orlando, Florida, where I attended their skilled nursing update.  

The Weird Occupancy Paradigm

This was not part of the update, but rather a way to set the stage. According to a September, 2017 press release from NIC, the most recent skilled nursing occupancy rate is 81.7%. If that is not enough discouraging news, here is a bit more: the Medicare patient day mix hit 12.7%, the lowest level in the NIC 5 year time series.

Here is what is weird to me, we seem to be kind of okay that it is this way. I am not suggesting that people are jumping up and down happy about it, but I don’t see anyone really saying, “This is a crisis that we need to address.”

And that is to me weird. (It is also weird that I find myself very frequently using the word weird in my writing.) 

I know that occupancy is not everything. That if you have the right type of residents with the right payor mix, you can still make a lot of money, but, if we are honest, no matter how good your mix is or even how high your profits are, empty rooms or empty beds is real potential revenue and nearly 100% of the revenue for that last unit you fill goes straight to the bottom line (Yes, I know less so in skilled).

The Summit High Points

What I particularly liked was PointClickCare’s renewed focus on figuring out what is most important to their customers. This is huge for any technology company. The biggest temptation that technology companies face is to do things they think are cool and assume their customers will think it is cool too. Many times what they think is cool is really not all that cool.  

What this really means is how can PointClickCare helps their skilled nursing customers successfully address these four challenges:

  1. Narrowing networks

  2. Shrinking margins

  3. Staffing challenges

  4. Increasing risk


They went on to talk about solutions in the 4 areas.  

  1. Narrowing Networks — The goal is to be the preferred provider in your network. This means having a 5 star rating (or a good story for why you are not a 5-star building). Have low readmission rates and reasonable lengths of stay. You need to have a compelling story and data to back that story up.  

    You need evidence-based best practices. There needs to be a smooth transition to and from the community. The admission process needs to be easy as does the discharge process.

  1. Shrinking Margins — The goal is to maintain or achieve profitability. This often means moving from a volume-based approach to a value-based approach. The highest value you will have to healthcare systems is to provide great care and they will pay for that. There needs to be a very careful strategy for creating the right patient mix. This means you likely cannot be all things to all people. You need to figure out what kind of patients you can serve very well and focus on that population. Finally you need to go after the money you are owed.

  1. Staffing Challenges — The goal is to be the preferred employer in your marketplace. This means looking at what makes your team members and potential team members happy. At one time it was fine to just provide a paycheck but today we face needing to serve older workers who are burned out and younger workers who are looking for purpose and meaning.

  1. Increasing Risk — The risk comes from so many places, attorneys who are looking for fees and regulators who are looking to justify their paycheck. The best solutions are to make sure you are following the rules and best practices. And that you document everything.

I find myself believing we likely have too many skilled nursing beds in this country and that the aging population will not solve that problem. Yet, I also believe that every single skilled nursing community has the ability to beat the market by doing these things.

Your thoughts?