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Start Your Home Care Company Right: Systematize Internal Operations

When we consider the value of a home care agency, it’s seldom that the internal operating systems are part of the consideration. However, how your home health agency’s operations are set up and run has a direct correlation on your operating expenses and, therefore, the value of your home care agency. It’s often said that your home care company is set up with the idea that someday, you will sell. For that reason, it is imperative that you systemize your internal operations. A solid infrastructure for your home health agency reduces expenses and adds value

Software is a good place to start. What software will you be or are you using? And, most importantly, is your staff using the software that way it is designed? All too often, while conducting a due diligence for sale or purchase, we find that a home care agency has a very good software product, but staff is doing “work around” because they want data or information in a different format. Do not allow “work around”! It increases costs and reduces the value of the company.

In addition to “work around”, we discover staff developing tracking sheets in excel or other programs. This only consumes their time and adds very little value to your home care agency. Regularly review all processes in your company for necessity and for value to the company in terms of information or data needed to make decisions. Systems and processes that are not adding value to the decision making process or document needed information need to be discontinued. Conduct a yearly evaluation of your systems and processes to make sure they meet the needs of your home care agency, add value, and are not taking staff time that serves no added value.

The recruitment and retention system is another internal system that needs to be reviewed and refined annually. As with other systems, the more routine you can make the system, the less time and money it costs. Who is responsible for placing caregiver ads, reviewing submissions to assure applicants meet requirements and for scheduling interviews and testing? When is this done and how many people need to be involved in the system? How often is the system reviewed for potential cost savings? In addition, what is the cost of the retention system? Is it achieving the desired results?

Payroll and billing is another essential part of the infrastructure. If you are on a computerized system with a good point of care application, most of the billing and payroll will be created when it is time to roll payroll or billing. In addition to the payroll and billing system, the system for collections will have a direct impact on the value of an agency. A sound collections system assures that your home care agency’s accounts receivable are never more than 45 days. This will also increase the value of the home care agency. The more automated your systems, the less the cost is to your operations and the more valuable your agency.

Your management team also influences the ultimate value of your home care company. Who is responsible for decision making in different areas of the home care agency? Frequently, we find the owner has retained decision making in their position. Failure to invest in your managers and give decision making authority over their areas of responsibility ultimately makes your company less valuable. Your job, as the owner, is to eventually make yourself obsolete. Doing so places the value in your home care agency – not you – when you’re ready to sell.

If you are having difficulty establishing internal systems that are cost effective and achieve desired results, Kenyon HomeCare Consulting is here to help. We are here for you. Call Ginny Kenyon at Kenyon HomeCare Consulting at 206-721-5091 or e-mail us at Kenyon HomeCare Consulting. We are here for you.

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