It may seem obvious that your senior care organization needs to grow, but growth at any cost or growth of all kinds may not always be beneficial to the overall health of an organization — and, in some cases, it can be detrimental. Ensuring growth is sustainable and profitable is key. Read on to learn how revenue growth management helps senior living organizations achieve sustainable growth while maintaining profitability.
Revenue Growth Management Basics
In its simplest form, revenue growth management refers to the processes and practices a business puts in place to achieve sustainable and profitable growth. The key components that impact revenue growth in senior living are:
- Customer Base: An organization must be able to grow and continuously extract value from its customer base for sustainable growth.
- Service Offerings: By prioritizing services that enhance the resident experience, organizations can improve their revenue growth over time.
- Pricing: It is imperative that services are appropriately priced in a sweet spot that is acceptable to customers and profitable for the business.
- Marketing: Activating the right promotions to build awareness, create demand, and convert consumers is critical to sustainable revenue growth.
- Sales: Where the rubber meets the road, sales are the foundational building blocks of revenue growth. Successful organizations make sales predictable with winning strategies and quotas that map to growth goals.
Revenue Cycle Management vs. Revenue Growth Management
Revenue cycle management includes all the financial steps from the point at which a resident joins a senior living community to the point at which the last penny is collected on their final invoice. At a high level, the phases of revenue cycle management include:
- Resident registration (e.g., gathering demographic and payment information, verifying insurance).
- Resident encounters and purchases (e.g., bedside care, medications, food purchases, activity registrations).
- Claims submission and reimbursement.
- Statement generation, payment collection, and account management.
Within the revenue cycle management process, there can be many obstacles to the swift and successful collection of payments. Issues with recordkeeping and insurance denials are just some of the delays that can slow down senior living organizations’ revenue cycles. Good revenue cycle management can prevent delays by establishing best practices and processes to streamline the steps outlined above and avoid common mistakes and errors.
How Technology Can Enable Revenue Growth Management
One way many businesses tackle revenue growth management is through technology. Cloud-based accounting software can automate revenue management, removing the opportunity for errors to be introduced by hand and adding efficiency. It’s important that accounting software integrations are seamless so that the critical inputs from each one of an organization’s software solutions can be considered when analyzing revenue. For example, a senior living organization may utilize a point of sale (POS) solution whose data is critical for understanding revenue. But if the POS system and the organization’s accounting software don’t integrate, it can be difficult or impossible to accurately account for revenue generated in the POS system.
Finding a Revenue Growth Management Partner
With all the complexities of running a senior living business, sometimes the best way to manage revenue growth is with a partner. Business consulting services can provide the technical know-how and strategy to help senior living organizations set realistic, healthy growth goals that won’t stress resources or take away from profit. Look for a partner who has experience with the unique regulations that govern the industry and is familiar with the business operations of senior living organizations.