By Elizabeth George
For many senior living leaders, those first few days after the invoices go out can leave them holding their breath and running for cover. How many callers and visitors will they receive wanting an explanation for why a resident’s monthly bill is more – maybe a lot more – than it was last month?
Residents and family members often feel like their monthly bill is a scary adventure in which they are being nickeled and dimed for every small service. That’s one of the drawbacks of a Fee for Service model.
Providing more predictability and making things simple for customers – not to mention for operators – is often the rationale behind considering an All-Inclusive model. Makes sense, right?
Maybe not. Senior Living Foresight spoke to Mark Anderson, Senior Vice President at Eldermark, (a Senior Living Foresight partner), an organization that provides software, consulting, and health IT services to senior communities.
As Mark shared, “The All-Inclusive model is not as common as it used to be but it is still in use particularly with dementia services. Many senior living providers have moved away from an All-Inclusive rate because of one significant problem: in most situations, lower care residents end up subsidizing the higher care residents.”
Mark shared the story of an Eldermark client whose entire operation was all-inclusive. What this organization discovered – once Eldermark helped them identify their true cost of care – was surprising: their highest care resident groups were paying on average $13-$16 per hour for their care while lower care residents were paying an astounding $60-65 per hour.
“The variance between those two ends of the spectrum was tremendous – and not sustainable. How long would it be before lower care customers figured out that they were paying too much for services? All-Inclusive models do not provide a level playing field,” he said.
Levels of Care Models Are Increasingly Becoming More Popular
There’s been a shift in the last few years to Levels of Care models that enable customers to have certainty around their charges each month and transparency around when charges might change.
Eldermark has helped several organizations make this shift. Though the details may vary from customer to customer, levels of care are largely determined through an assessment process that maps against an organization’s service model and fee structure. For example, a nurse might conduct a resident assessment in which the outcome, in a point system, totals 54 points. An established service model might equate this outcome as a Service Level 3 and assign it a corresponding monthly fee of $2300. This kind of model enables the organization to easily and confidently communicate fees to its customers.
As Mark sums up, “It’s our preferred model because it’s fair, easy to manage, and very consumer friendly.”
For more information about how to develop an assessment tool that integrates with your service model and helps you meet your financial goals, visit Eldermark’s website.