6 Revenue Challenges Senior Living Operators Can’t Afford to Ignore

For many senior living operators, their current revenue management solution can’t handle today’s complex challenges, and it’s hurting their bottom line. Without streamlined, efficient revenue management, senior living operators struggle on many financial fronts — from securing capital for expansion opportunities to attracting investors.

But most importantly, poor revenue management makes it difficult to provide residents with the high-quality care they deserve and expect. How can you expect to maintain your current occupancy, much less grow your occupancy rates, if you don’t have the necessary financial resources to support appropriate staffing, building maintenance, engagement programs, and other quality-of-life initiatives?

If you’re struggling with the following revenue management challenges, it’s time to take a hard look at your current processes and identify where and how to improve.

1. Tracking Real-Time Census and Occupancy Management

Maintaining stable occupancy rates remains a problem for many senior living communities. So many reasons contribute to this revolving door. Do these scenarios sound familiar?

• A resident’s health care needs change, and their current community isn’t equipped to handle their new acuity level.
• A resident wants to move to another city or state to be closer to family as they age.
• A resident’s financial situation changes, and they can no longer afford their current community.

With fluctuating occupancy rates, you won’t have an accurate, real-time view of available units if you rely on manual tracking systems, which can affect revenue in many ways.

For the sales team, they need immediate visibility into a community’s unit inventory to understand how to quickly and efficiently scale their efforts to drive occupancy and bring in enough revenue. If your sales team lacks access to critical leasing data in their CRM, they can’t effectively adjust their strategies to better fit the market or capitalize on emerging trends and opportunities.

On the finance side, those stakeholders need an adaptable model for tracking real-time census with a wide range of census methodologies. Without those insights, it’s difficult to set the appropriate pricing and make informed decisions about capital expenditures, such as expansions or community upgrades.

Even staffing and care come into play here. You need accurate census reports to determine the right staffing levels. Obviously, overstaffing directly affects the bottom line, but understaffing can cut into revenue as well. An understaffed community won’t have the resources to properly take care of its residents, and that can lead to move-outs and a damaged reputation, making it harder to attract new residents.

2. Accurately Managing Leasing and Billing

Given the variety of services and care levels many communities offer, billing is a complex process. However, many back offices still use manual processes and data entry for billing. Not only is this time intensive, but it also makes your community more susceptible to billing errors, directly resulting in revenue leakage.

This is especially an issue when it comes to changes in care. Perhaps a resident lived without assistance but took a fall and now needs help getting around the community until they fully recover. The caregiver may note this change to the resident’s chart but doesn’t communicate this change to the billing team.

In this situation, inaccurate billing could go on for weeks or even months. As this compounds over time for multiple residents at different locations, the revenue loss can add up quickly. Manual data entry is not equipped to handle these frequently changing care needs.

3. Working in Data Silos

If your sales team works in a silo without data integration, they start at an instant disadvantage. Your sales team needs to focus their efforts on using data to acquire leads and turn them into move-ins. They don’t have time to spare on manual administrative tasks, especially when it comes to creating and sending leasing documents.

When your CRM doesn’t automatically pull data to generate a leasing template, manually creating these documents can be a complex process. On top of shifting your sales rep’s focus away from converting leads to move-ins, it also delays the move-in process. Not only does this delay tie up cash flow, but it can also make for an unhappy prospect. As the process lingers, losing that prospect can become a real possibility if frustrations mount. If a prospect is ready to sign a lease, the process should be as easy, quick, and efficient as possible, and those old manual ways aren’t up for the task.

Siloed sales operations can also lead to excessive discounts that directly cut into revenue. When a sales rep negotiates a discount to improve their move-in conversions, they often lack the visibility necessary to determine whether the discount is too deep. The discount then becomes the contracted rate without approval from the leasing and billing team, which should be involved in pricing negotiations to ensure new move-ins bring in a profit.

4. Processing Payments Quickly and Efficiently

Payment processing for senior living communities is notoriously slow and reliant on manual work that takes hours each month. This directly affects a community’s cash flow, making it difficult to cover necessary operational costs, budget for future expenses, and even secure financing for expansions and upgrades.

While a lack of cash flow affects a community’s immediate finances, it can also hurt future revenue, particularly if a community doesn’t have the capital to keep up with building maintenance. Leaving home is a difficult decision for many residents and their families, especially given the negative connotation that many have about senior living. They want a homey, comfortable environment, but if your community can’t afford to make the necessary improvements, those potential residents will go to your competitors.

5. Adhering to Regulatory and Compliance Requirements

Adhering to regulatory and compliance requirements comes with plenty of complexities, and if not handled properly, any mistakes can result in large fees and penalties.

Take rate management, for instance. As operators make rate changes for the upcoming year, regulations require senior living operators to inform residents of the new rates by a certain date, which varies by state. Manually generating the required communication and then updating each account with the new rates takes weeks to prepare. If the billing team makes a mistake during this complicated process, the community could face a large fine, and this can further compound if that mistake happens across multiple communities.

And then comes supplemental payor management, which includes Medicaid, secondary insurance, and other third-party payors. Each payor has their own requirements for billing, documentation, and procedures. The billing team must follow these requirements to the exact specifications, which requires specialized knowledge. A small mistake can result in fees and fines as well as denied claims or delayed payments, directly hitting the community’s cash flow.

6. Quickly and Accurately Pulling Reports

Manual data management inherently doesn’t allow for real-time reporting. Of course, this puts a huge strain on your ability to identify and immediately solve any billing or payment issues or errors. From an operational standpoint, lacking real-time reporting leads to ineffective cost management when you don’t have timely visibility into your daily expenses and resource allocation.

Closing month-end reporting is also a huge challenge when relying on manual processes, given the various revenue streams, fluctuating occupancy, regulatory reporting requirements, and payment delays. Human errors often make their way into month-end reports, and these manual reports don’t automatically integrate with other financial systems, contributing to even more errors and delays.

The Fix — Smarter Integrated Data

So where do you go from here? This is where a robust integrated data system can solve your revenue challenges.

With today’s complexities, managing your revenue processes from outdated spreadsheets and manual data entry won’t cut it. To maximize your revenue potential and free cash flow, increase efficiency, and improve oversight, you need a modern revenue management system that:

• Integrates all revenue touchpoints of your organization — from leasing and billing to sales and marketing, care, and resident engagement — for more efficient and aligned operations.
• Eliminates human error from manual data entry to avoid hefty penalties.
• Reduces the administrative burden on your billing team to allow them to focus on more strategic initiatives.
• Provides real-time reporting and visibility to give all stakeholders the information they need to make data-driven decisions.

If your senior living business could benefit from the powerful outcomes that come with a comprehensive revenue management platform, download our white paper “Senior Living Operators: Better Manage Revenue Workflows With Integrated Data” to learn more.