SPECIAL REPORT — Missed Opportunities, Sacrificed Profits: The True Cost of Overlooking Staff Development in Long-Term Care
Introduction
Leaders in the long term care sector face the difficult task of providing high quality care while increasing profitability every quarter. Under pressure to generate returns, they often see staff as a cost instead of a resource — so they cut staff, or let positions go unfilled. And this in turn drives the quality of care and the quality of life down. Are quality and profit in conflict? This report argues that staff are actually the most valuable resource an organization has and that the cost of investing a small amount today in workers’ continuous learning and coaching will bring higher profits and higher well being for staff and residents now and in the future. Not only are quality and profit not in conflict but quality drives profitability. This report also explores alternative paths to profitability and the reasons they fall short.
The Changing Context is Disrupting our Industry: Our industry is in the midst of a significant evolution. Consider these drivers:
Evolving Demographics: In 2023, more than one in every six U.S residents is over age 65. That’s driving growing demand for long-term care services and supports. Dynamic solutions are needed now to meet greater and more varied needs.
Financial Constraints: Declining Medicare and Medicaid reimbursements mean that alternate revenue streams and greater operational efficiencies are needed immediately.
Technological Advancements: As technological innovations continue to reshape all spheres of healthcare, from telehealth to AI-driven assistance, long-term care facilities need to adapt and remain agile to stay relevant and efficient.
Key Insights
Invest in Staff or in Acquisitions? The industry is expected to grow significantly in the future, so many owners are shifting resources to acquisitions in anticipation of this growing need. But the staffing crisis is broad and deep across all health care settings, and leaders also know that they need to recruit staff now, keep them engaged, and market to potential residents.
Guardian Angel Homes Case Study: In 2021, Guardian Angel Homes, a family owned company operating assisted living and memory care facilities in four locations was struggling to differentiate themselves from their more resourced competitors. They needed to reduce falls, staff turnover, and become more operationally efficient. Fast forward to 2023, and they’ve achieved a turnaround that stands as a testament to the transformative power of continuous learning and coaching. The pivotal strategy? Cultivating a culture of continuous improvement. The result was a cohesive team that now delivers excellent care, driving resident satisfaction and bolstering financial margins.
Are there Alternatives to Investing in Staff Development?
As facilities grapple with challenges, several alternative paths to quality and profitability often present themselves. Delving deeper:
Staff-Centric Solutions
Increasing Staff Pay and Bonuses: Higher compensation and incentives can certainly boost quality and morale in the short term. Yet, without structural changes in workplace culture or addressing deeper issues, this boost can be fleeting. It’s not just about paying staff more; it’s about valuing them more while ensuring they make a living wage.
Hiring from External Agencies: While a quick fix, relying too much on external agencies might not foster a long-term commitment to facility values. More short-term staff isn’t the answer either — better trained, happier, and committed staff is.
Reduced Hours: Reducing hours might appear to counteract burnout, but it doesn’t address why the burnout occurred in the first place. Coaching and staff development can help the entire team get on the same page so burnout doesn’t happen.
Short-Term Training: Short courses can fill immediate knowledge gaps, but they don’t nurture a culture of continuous improvement. They need to supplement longer term coaching and development.
Operational and Cost Solutions
Cost Cutting: Reducing overheads might offer a temporary respite from financial pressures. However, it’s a delicate balance. Strip back too much — by not hiring enough staff, for example — and quality of care will drop off. Streamlining processes is a key way to reduce inefficiencies.
Leadership Restructuring: Leadership undeniably shapes an organization’s direction. But changing faces without altering foundational strategies can be cosmetic at best.
New Technologies: Technology-related solutions to operational problems are appealing, but the cost can be too high and the payoffs uncertain if the technologies are not tailored well to the needs of the facility.
Marketing and Outreach Solutions
External Marketing Campaigns: While attracting new residents is essential, retention is equally crucial. Flashy campaigns might fill beds, but sustained excellence keeps them filled.
Performance Monitoring: This approach can provide valuable insights, but without actionable feedback and continuous support, metrics remain just numbers.
The Method for Change
The solution lies in creating a culture of continuous learning.
The Power of Continuous Learning: When staff are empowered to develop new skills, they become the linchpins of transformation. They’re better equipped to adapt, innovate, and deliver exemplary care, as this Portland State University study demonstrates.
Avoiding Cost: Many facilities are unaware of the connection between insurance premiums and improvement culture. Deductibles are on average $50,000-$100,000 for each incident that goes to litigation. And the administrative cost of avoidable events such as falls, near-falls, medication errors, and staff turnover costs facilities on average $150,000 per year.
Three Pillars of Transformation: Excellence in long-term care is a triad of staff satisfaction, resident well-being, and financial growth. Each pillar supports and enriches the other, creating a holistic model of success.
Action Steps
Invest in staff development now to bolster immediate profitability and long term viability.
Assess and Realign: Take stock of current operations, identify gaps, and align strategies to emphasize continuous learning and coaching.
Create a Learning Culture: Foster a culture of continuous learning. Encourage skill development, knowledge sharing, and a commitment to personal and professional growth.
Coach for Success: Implement coaching programs that empower your staff to excel. Equip them with the tools they need to provide exceptional care while developing their potential.
Balance Care and Profit: Integrate your caregiving ideals with your financial goals. Understand that investing in staff excellence generates quality which in turn generates profit.
Embrace Setbacks as Learning Opportunities: No journey is without its bumps. The key is in viewing setbacks as challenges that lead to growth. Address staffing issues, financial constraints, or resistance to change with determination and creativity.
Learn from Failure: Failures provide valuable lessons and opportunities to grow. Learn from them and refine your strategies. Remember that a commitment to continuous improvement is the core.
Conclusion
The long-term care industry is on the brink of transformation. But focusing solely on future growth at the expense of investing in the people currently responsible for care is short sighted. Instead, the path to success starts with investing in staff training and coaching on quality improvement. Doing so will improve staff satisfaction, resident well-being, AND financial growth. Embracing continuous learning and coaching isn’t just a strategy for meeting the challenges of the future; it’s an imperative now. Operational success, care, and financial growth go together, enhancing and building on one another.
To learn more, download our free Huddle Guide, one of the three core practices of continuous quality improvement that focuses on communication.
Also, sign up for a live webinar to learn more about the LiveWell Method™ and see how it can help you.
