Overview
Managing Home Care Agencies is a massive challenge in today's environment of staffing shortages, increased regulatory demands, and declining reimbursement. Improving the financial performance and operational efficiency of home care agencies must begin with an approach to managing by the numbers. Agencies must define benchmarks across clinical, financial, and administrative facets using clearly defined Key Performance Indicators and the acceptable level of performance.
A Home Care Agency's management should look at defining KPIs in client acquisition, staff recruiting, deployment, marketing, and financial performance. These KPIs will help agencies measure, monitor, and manage the operations and give them the ability to focus on improving operational efficiency and growth.
Agencies must work with software providers to create customized operational and clinical KPIs reports. Further, the agency must endeavor to develop financial reporting by integrating home care software and accounting software.
This blog defines the most important KPIs for Home Care Agencies across Census, Scheduling, and Financial areas.
Census or Clinical Operations Measures
These metrics will provide information on the number of active patients, admissions, discharges, and the average length of stay for the agencies. Diligent monitoring of patients under care indicates the agency's performance and improves patient and caregiver satisfaction.
Current Census
Defined as the number of active patients (admissions)under care at any given time
The current Census and trends in the patients under care at a given point will help agencies plan caregiver capacity, plan for growth, and provide insights into the agency's performance. Census data must be available across dimensions such as Payer, Location, and Lines of Service.
Admissions
Defined as the number of admissions in a period
The ability to perform trend analytics on the number of admissions in a defined period helps agencies understand changes, optimize caregiver capacity, and plan schedules. The management software utilized by Home Care Agencies must provide reports on admission across dimensions such as payer, location, and lines of service.
Discharges
Defined as the number of discharges in a period
The ability to perform trend analytics on the number of discharges in a defined period helps agencies understand changes and re-utilize available caregivers. The management software utilized by Home Care Agencies must provide reports on discharges across dimensions such as payer, location, and lines of service.
Average Length of Stay
Defined as the number of days a patient is under the agency's care
The average length of stay for discharged patients enables home care agencies to plan caregiver capacity. By comparing the average length of stay for active patients with the average length of stay for discharged patients, home care agency's operations leaders can get a sense of patients who may be getting discharged soon and optimally utilize caregivers. The management software used by Home Care Agencies must provide reports on the average length of stay across dimensions such as payer, location, and lines of service.
Schedules
Scheduling KPIs provide information on patient hours, visits, charges, payroll costs, and averages by visit, patient, and employee. Analyzing this information over a period will help home care agencies measure the efficiency of the scheduling operations and identify areas for improvement.
Total Patient Hours
Defined as the number of hours services are provided to patients for a given period
The KPI, Total Patient hours, indicates caregiver utilization and helps agencies optimize staffing, reduce expenses, and plan for growth. The management software utilized by Home Care Agencies must provide reports on total patient hours by payer, location, and lines of service.
Total Number of patients, Total Patient Visits, Visits per patient, and Average Hours Per Visit
While self-explanatory, these indicators provide a view of volume, caregiver utilization, and billability
As billability is a primary concern for home care agencies, these volume and utilization KPIs help decision-makers estimate the number of caregivers required, project revenues, and plan schedules. Analytics by payer, location, and lines of service can help the home care agency understand the billable (utilized) time per visit.
Number of Caregivers on Rolls and Average hours and Visits Per Employee
These indicators allow the operations leader to distribute workload and travel time across employees.
By measuring average hours of service per employee, operations leaders can identify the top and bottom-performing caregivers in terms of utilization.
The average number of visits can help them understand issues related to travel and employee fatigue.
Average Charge per Hour, Visit, Patient, Employee
Defined as the average charge (revenue) for the services provided per hour, visit, patient, and employee
This KPI can stratify revenue across different bases and identify the top revenue-producing services. The KPI should be available on the home care software by payer, location, and lines of services. This metric, along with Average Pay per hour, will give the gross margin per hour, which should be high enough to cover operation costs.
Average Pay Per Hour, Visit, Patient, and Employee
This KPI will provide the average pay (labor cost) for the services provided per hour, visit, patient, and employee.
Average pay per hour and Average Charge per hour will give the gross margin per hour, which should be high enough to cover operation costs. This information should be available by payer, location, and lines of service to help you estimate profitable payers and lines of service
Canceled Visits and Hours
Defined as the number of canceled visits and the hours for a period
Canceled visits lead directly to lost revenue and decreased patient and employee satisfaction. The Canceled visits reports help you identify the cause for cancellations and take measures to reduce them and avoid revenue leakage.
Having this metric by payer, location, and lines of service will be very helpful.
Missed Visits and Hours
Defined as the number of missed visits and the hours for a period
Missed visits lead to lost revenue and decreased patient and employee satisfaction.
Having this information will help the management of home care agencies to identify the cause of missed visits and take corrective measures to reduce them. Having this metric by payer, location, employee, and lines of service will be very helpful.
Uncovered Visits and Hours
Defined as the number of uncovered visits and the hours for a period
Uncovered shifts/visits are the open shifts for which the agency could not schedule an employee. Uncovered shifts are lost opportunities to increase billable hours and revenue. This metric should be available by payer, location, and lines of service. This information will help the management of home care agencies identify areas for growth by increasing the staffing level.
Authorized Hours/Visit Versus Used Hours/Visits
This metric helps you understand the ratio between authorized hours and utilized hours.
This information will allow home care agencies to monitor authorization against usage and adjust future schedules accordingly. Using this metric, home care agencies can optimize the usage of authorized hours and avoid going over the authorized hours to optimize costs.
Financial
Financial metrics will provide information on revenue, days sales outstanding (DSO), gross margin, late claims, etc. Analyzing this information over a period will help home care agencies measure the agency's financial health and identify areas for improvement.
Revenue
This metric will help home care agencies to monitor the revenue and the sources of the revenue.
The Home Care Agency must track gross as well as net revenue. Home care agencies should monitor the net revenue more closely because it depends on each payer's contractual arrangement. Monitoring net revenue by payer, location, employee, and lines of service will help agencies to focus their efforts in areas where net revenue is higher.
Days Sales Outstanding (DSO)
Defined the average number of days payers, including patients, take to pay for the services provided.
Monitoring this metric will provide insights into the efficiency of the billing and collection processes in the home care agency. This metric should be available by payer, location, and lines of business. Agencies should keep this number low by adjusting the billing and collection process.
Late Claims
This metric will help you identify claims and charges getting closer to the timely filing limit.
Monitoring this metric and taking measures to send the claims before the deadline significantly reduces the lost reimbursement for home care agencies. This metric should be available by payer, location, and lines of business. Establish tracking for each claim using the claim filing deadline days for the specific payer.
Gross Margin
Gross Margin is the difference between the charge for the service and the direct labor cost for providing the service.
Calculate Gross Margin based on net revenue and total payroll costs. Home care agencies should monitor gross margin regularly to ensure it is high enough to cover all other operating expenses. This metric should be available by payer, location, and lines of business.
Patient Lifetime Revenue
This metric will provide information on each patient's average lifetime revenue generated.
This metric should be available by payer, location, and lines of services. Monitoring this metric will help home care agencies to focus their efforts on growing the agencies.
Employee Lifetime Revenue
This metric will provide information on each employee's average yearly revenue generated.
This metric should be available by payer, location, and lines of services. Monitoring this metric will help home care agencies to focus their efforts on growing the agencies.
Conclusion:
A comprehensive set of KPIs helps operations managers measure revenue, costs, caregiver productivity, employee satisfaction, and patient satisfaction. Operations Leaders at Home Care Agencies must establish processes to obtain, publish, and review these KPIs with their team members as per a cadence.
Measurement is the first step in identifying the opportunities for improvement. Operations leaders can monitor their performance across internal and industry benchmarks to build continuous improvement programs. They can utilize the KPIs to improve scheduling, utilization, employee measurement, rewards, and retention while keeping a solid grip on revenue, costs, and profitability. A good Home Care Agency Management software platform should be able to provide most of these metrics if not all.
About CareVoyant:
CareVoyant is a leading provider of cloud-based integrated enterprise-scale home health care software that can support all home-based services under ONE Software, ONE Patient, and ONE Employee, making it a Single System of Record. We support all home based services, including Home Care, Private Duty Nursing, Private Duty Non-Medical, Home and Community Based Services (HCBS), Home Health, Pediatric Home Care, and Outpatient Therapy at Home.
CareVoyant functions – Intake, Authorization Management, Scheduling, Clinical with Mobile options, eMAR/eTAR, Electronic Visit Verification (EVV), Billing/AR, Secure Messaging, Notification, Reporting, and Dashboards – streamline workflow, meet regulatory requirements, improve quality of care, optimize reimbursement, improve operational efficiency and agency bottom line.
For more information, please visit CareVoyant.com or call us at 1-888-463-6797.
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