We recently published "The 11.1% Survival Guide for SNFs: 5 Tips for Thriving When Times Are Tough." We will post all all five tips here over the next few weeks. Here's the first excerpt:
Tip 1: Stay On Course with Sound Strategies, Especially for Sales and Marketing
Cutting costs and deferring “nonessential” projects can have short-term rewards, including in some cases an immediate positive effect on the balance sheet. And the cost-cutting process lets management do something, taking control in a positive way that can reassure executives and the entire organization that they are preparing for survival.
But do drastic cost cutting and risk aversion promote the greatest performance over time? When pressed for their very survival, SNFs have two options: Fight or flight. One school of thought says to fight, especially during challenging economic times. Fighting means digging in, making hard choices about spending but also supporting and investing in people and programs to promote continued financial and operational growth and performance.
Even with diminished reimbursements and potential shifts to shared cost and risk models, the fundamental business objectives for SNFs remain unchanged. Provide exceptional clinical care and life experiences for patients. Keep buildings as consistently full as possible. Manage capacity and optimum payer and case mixes to ensure maximum revenue. Outcompete other facilities in your area.
So what you thought was strategic before October 1, 2011, should be even more strategic today. If you were reinvesting in updating and remodeling your facilities to improve the impression you make on prospective patients and their families, why would funding cuts completely derail that strategy? Maybe the costs and the timeline get stretched out a little longer, but if old, unappealing facilities were costing you business yesterday, they’ll continue to do so at the worst possible time—when reimbursements are down. And you’ll likely spend much more to restart such projects later, when things are theoretically “more stable,” than finding a way to keep moving forward now.
This holds especially true with one area that almost always gets cut during tough times: Sales and marketing. Senior care marketing expert Patty Cisco says it best:
Historically, when companies become financially challenged, marketing and sales efforts are the first budgets to get cut, and in some cases this means marketing and/or sales staff as well. Senior health care organizations are no exception.
I’m always a little baffled by the thought process behind the “cutting the hand that feeds you” marketing philosophy. After all, without marketing to generate the leads, and sales to turn the leads into customers, how will financial goals be met? In addition, the act of consistently starting and stopping marketing efforts actually does more harm than good and even fuels the revenue problem.
To survive, SNFs must consistently build and manage quality census. Anything that impedes successful sales and marketing will cause far more harm than reimbursement cuts. You’ll just have fewer patients, potentially reimbursed at lower rates*—the worst possible outcome.
*Hold that thought—11.1 percent Medicare cuts aren’t what they seem, as we discuss in Survival Tip #4.
Email me at dwalker@patientplacement.com if you'd like the complete free survival guide.
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