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LifeStyles Senior Housing Managers has 10 communities in California, Oregon and Washington with independent, assisted, memory, enhanced and Parkinson's care units. The company saw that as residents transitioned between levels of care, families experienced a radical change in how care services were packaged and priced.
At LifeStyles, assisted living units used a points-based system, while graduated care communities used the more traditional levels system of billing. The levels system had three distinct care "buckets" for light, medium and heavy services needs. LifeStyles noticed that many residents were on the cusp of service levels. A new service, even the addition of a short-term medication, would place that resident in the next level resulting in a potential dilemma for nursing staff to document the services additions.
Most communities think that levels are easier, but it really is just a habit. Staff might tend to let additional tasks go unrecorded as they might cause a level jump of several hundreds of dollars.
In addition, LifeStyles staff had to learn two systems of pricing that were inconsistent between care units. And the comparison between the two systems was hard to explain, and that presented a marketing challenge for the organization as well.
On the surface, the difference in the systems was not considered broken. Everyone understood the levels system and had learned to work with it. LifeStyles, however, realized that in order to maintain the quality of care consistently throughout its communities, and keep the company competitive, the organization needed to take a deeper look at the difference and similarities between points and levels.
The Approach-It's All About The Numbers
The only way to investigate the levels and points dilemma was to look at the costs associated with care services. LifeStyles also needed to understand industry competitive base rates, what new residents expect to pay for an apartment in a community. Armed with this information and the costs for services, LifeStyles spent more time number crunching and considering how a transition would financially impact current residents and care staff.
For current residents who were already on the level system, LifeStyles created a program to grandfather in a pricing structure that eliminated any sense of potential increase in fees. It was important for residents to know that this change was about making its pricing easier for everyone. LifeStyles wanted it to be seamless so that its residents would see no direct change in what they love about living in its communities.
Making The Transition
A transition of any kind can be challenging, but this one was seamless and painless. Lifestyles used software that tied together all of the resident information, from assessments to care plans to billing. Now care staff is accurately documenting services.
The transition from pricing based on levels to pricing based on points put everyone on the same page so LifeStyles no longer has the issue of services going unrecorded, it was a way to end service creep. For families, this has been helpful because during care conferences LifeStyles can accurately share what family members need.
For residents who move through the LifeStyles communities, families had one less learning curve. For example, residents that move from Assisted Living to Memory Care, a points-based system is already completely understood. Conversations with family members can focus on care.
Staying competitive was also a factor for this move. For new residents, LifeStyles's pricing system is easily understood. Marketing can focus on its service and care approach, which is what residents value about LifeStyles communities.
The Bottom Line
Once the change was implemented throughout the LifeStyles communities, the management team recognized additional benefits. Now, management can compare communities. If they see wide fluctuations in points between different communities, it is a warning sign that they may not be capturing acuity correctly.
LifeStyles also had a positive revenue impact. Within the first six months after implementing the change, LifeStyles saw a six percent increase in revenue. Points allowed the company to more accurately track services and bill accordingly.
Doug Fullaway is president and CEO of Vigilan, a management software company for senior living, the owner of several senior communities.
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