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Download the 30th edition Skilled Nursing Facility Cost Comparison Report and watch the videos for insights on how your organization compares to competitors.

Industry trends

30th Skilled Nursing Facility Cost Comparison Report — New Data for Benchmarking

  • 8/27/2015

The Skilled Nursing Facility Cost Comparison Report gathers financial data from nonprofit and for-profit nursing facility providers nationwide. The report helps leaders make strategic decisions concerning solvency, cost efficiencies, and profitability. This year’s publication is based on information reported in 2014 from approximately 450 providers.

For 30 years CliftonLarsonAllen has provided this data so the leaders of nursing facilities can better understand their financial condition. It provides a critical tool with which we can discuss and explore the magnitude of any variances in cost structure or operations compared to similar organizations.

The Skilled Nursing Facility Cost Comparison Report has valuable information you can't get anywhere else. Download it now.

As seen in the videos below, we brought together several health care practice leaders to reflect on how the Skilled Nursing Facility Cost Comparison Report came into existence and how the industry has changed over the years. For CliftonLarsonAllen, it has become a useful tool with which to discuss financial metrics with clients. For clients, it was a source for information they couldn’t get anywhere else.

Providing vital business information

In 1983, Mike McConnell was serving clients in health care when he and several colleagues realized that the information they routinely collected to file clients’ Rule 50 cost reports could be valuable. In fact, long-term care clients often asked how their facilities compared to others in the industry. McConnell asked his supervisor what he thought of collecting this information in a useful format for distribution to clients, and the response was more or less, “Okay, but let’s do this after hours.”

McConnell and a team of several colleagues put in many late night hours compiling the information, and the response to the first Skilled Nursing Facility Cost Comparison Report in 1983 took everyone by surprise. Clients began using it right away. In meetings with auditors, the report helped focus discussions on data and improving performance. Suddenly, CliftonLarsonAllen stood out as a significant resource. Clients valued the data because it could make them more competitive, and competitors couldn’t duplicate it.

“We were simply aligning ourselves with where we thought the industry was going,” says McConnell. “We had information at our disposal, and we thought it could be helpful to our clients.”

The report provided vital business information that the industry couldn’t get anywhere else. Gordy Vetsch, who worked with McConnell at the time, says, “The only other similar reports came from the Department of Human Services, and there was a two-year lag to get that data — we were the only one doing this.”

Impact on clients and the industry

CLA nurtures close relationships with clients, and the report provided a framework to discuss best practices and efficiencies — everything from food costs to staffing costs. McConnell says, “It was a tough time for our nursing home clients, and they were trying to figure out how to deal with it. The report helped position us as part of the solution.”

The report’s popularity and use spread across the industry and beyond. Investment bankers used it. Small sites used it to understand how they could compete with larger facilities. It was used as a resource politically and legislatively. Clients drew on it to benchmark acquisition targets, since it offered accurate information that could provide the foundation to improve their outcomes. And as the CLA health care group’s client base grew each year and the report included more facilities, the breadth of the information expanded from state to regional to national.

Vetsch says, “As professionals, it took our practice in a different direction, because it allowed us to be more proactive.”

Principal John Racek met with one client every month because she actively used the information and rate computations in the report. “She was a disciplined operator, and she was methodical in her attention to this information. It helped her succeed.”

The tool was also valuable to leadership, management, and boards. “If there were disagreements about staffing needs, they’d pull out the report,” says Vetsch. “It gave them credible information to base their decisions on.”

The future of skilled nursing facilities

As the health care industry embraces health reform, the cost comparison report will continue to provide essential information for organizations. Skilled nursing facilities will be adjusting to shorter stays, higher acuity, and higher costs of care. The issues of the future will also include new technologies, home care, and monitoring systems, and as a result, there will be even more attention on the management of costs.

Principal Deb Elsey says, “The future will demand that organizations are not only paying attention to their costs, but the broader picture — the total cost of care. Payers are already selecting the highest quality providers and establishing relationships. If providers cannot manage costs and demonstrate quality results, your organization may be left out.”

John Richter, who has focused on health care for much of his career, marvels at how the industry has transformed over the years. “We’ve gone from large wards with minimal privacy to reinventing buildings to try to really understand and respond to needs. We are developing ways for seniors to age in place at home because that’s what they want. Health reform has actually been great for skilled nursing facilities,” he says. “And this tool we developed back in 1983 has been key to helping organizations succeed, and improve, and innovate.”  

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