As you begin planning your finances for the year, there are a few essential strategies you should follow. Strategize your business’ finances and revenue growth with these three tips.

Tip #1: Benchmark Your Finances Against Industry-Standard

Finding: Providers are doing better financially than they have been for the last five years. Since 2019, home care agency median revenue has grown by 24.9%, with significant improvements in the past year. This is a promising sign for post-acute care businesses, showing that with the right strategies, growth is easily achievable.

Trend: As displayed in the graph below, median revenue rose by 20%, or over a quarter million dollars ($292,723), in the last year, marking the largest annual increase in the last five years. Growth on this scale remarkable, and if coming years follow this trend, home care agencies have the chance to expand their business considerably.

Threat/Opportunity: While median revenue is continuing to grow, the annual care staff turnover rate has reached almost 80%, totaling a 14% spike in the last two years. This opens the playing field for both opportunities and potential pitfalls, and because of the heightened turnover rate, providers are diversifying their top five payer sources. These include:

Data-Driven Strategy: To follow suit and grow your median revenue, start by uncovering your blind spots by gathering and acting on feedback from your employees and customers. With direct feedback and data, you can learn what you should start or stop doing to take a data-driven approach towards increasing revenue. Activated Insights can help you gather this data through our comprehensive Experience Management program. You can then analyze different factors of your business, such as service lines that are the most/least profitable, payer sources that are the most/least profitable, and geographic analysis. To further increase your median revenue, you can:

Tip #2: Recruit & Retain Long-Term Employees

Finding: It’s more crucial than ever for providers to retain hourly employees as weekly billable hours are on the rise again. This is becoming even more prevalent as the staff turnover rate has reached an all-time high.

Trend: Since 2022, the industry’s weekly median billable hours has increased by 44.4% for live-in care and 23.3% for hourly care. With more billable hours, post-acute care companies desperately need enough staff to meet their clients’ needs. This trend highlights the urgent need for top-tier recruitment and retention strategies for both in-home and facility-based care teams.

Threat/Opportunity: As of last year, hourly care comprised 85.6% of all home-based care service offerings. However, revenue from hourly care is also the lowest it’s been in the last three years, dropping by almost 10% in the last year. Likewise, revenue from live-in care increased year over year.

Data-Driven Strategy: Recruitment and retention are essential to business growth. Begin by investing in recruiting quality candidates and retaining long-term employees to keep up with the industry’s ever-increasing customer base. You should also:

Tip #3: Increase Staff Skill Level to Increase Revenue

Finding: The popular one-size-fits-all billing approach is limiting potential earnings—revealing an untapped market for additional growth. Instead of looking at billing as the end-all-be-all for revenue, it’s time for home care agencies to find additional ways to enhance their value and increase their revenue.

Trend: 61.6% of providers are billing solely on length of visit, while only 29% of providers are billing for duration combined with level of skill. This method not only lowers the value of the services you provide, but also limits your revenue potential.

Threat/Opportunity: While many agencies may find it costly to add additional training to their staff’s schedule, there is a significant opportunity to increase business value by doing so. Offering at least eight hours of orientation and twelve hours of ongoing training increases your annual revenue by $1,103,291.

Data-Driven Strategy: Investing in training for your care team comes with a multitude of benefits, including increased revenue. Activated Insights can help you train your staff in common and specialty areas, ensuring they are capable of handling any client need. You can also compare and contrast your company’s profit and loss statement to the industry’s average to find areas for financial improvement such as investing in your staff’s specialty training. A few areas to get you started are:

• Take the cost of client acquisition (digital lead example of $550) + additional internal hours to reach the first billable shift. Take that gross dollar amount and divide it by (bill rate * weekly hours) to determine how many weeks it will take to break even.
• If you’re making under $799K in revenue, reevaluate your bill rates to give yourself the necessary margin to reach optimal financial health. If you’re making more than that, focus on improving your internal processes to better manage your scheduling decisions, pay rates, and overtime percentage.
• Be intentional with tracking marketing, mileage, and related expenses. Set expectations with budgets and travel plans to reduce mileage and increase average visits per mile.
• Utilize time-bound profit-sharing bonuses for marketers to create a win-win situation.
• Make it a priority to manage the return on investment from digital customers and sponsored care staff. These line items are oftentimes leaned on as band-aids for poor operational behaviors/habits.

Enhance Client Care and Increase Revenue with Activated Insights

As the post-acute care industry continues to change, recruiting, retaining, and training your staff become invaluable tools for increasing your company’s revenue. With Activated Insights, you can access a host of tools that will help educate your staff and grow your brand’s reputation.

For more data-driven strategies like these, access the full 2024 Activated Insights Benchmarking Report (formerly the HCP Benchmarking Report).

Make More Data-Driven Business Decisions with These Resources

Tune into the 2024 Benchmarking Report Webinar Series: The State of Finance in Home-Based Care