Cost Savings? Five-Star Rating? Modeling With CLA Clarity Offers SNFs Answers

Case study

Industry: Skilled Nursing
Need: Balancing Staffing and Profitability
Service: CLA Clarity

Understanding the situation

If you believe your five-star rating matters more today than ever before, you’re not alone. With nursing costs generally consuming more than one-third of all operating costs, skilled nursing facilities (SNFs) are continually seeking a balance between clinical staffing levels and resident outcomes ― two components of the overall rating.

As one SNF with 159 beds in the upper Midwest was entering its budgeting process, leaders wanted to understand how to maintain a five-star staffing rating, while balancing staffing ratios.

CLA estimated that the facility had an opportunity to save approximately $675,000 with no change in the staffing rating.

Exploring the challenge

CLA began the process by reviewing current staffing hours and ratings, and comparing them with the cut points (minimum thresholds that distinguish between the different star ratings levels) for the facility’s current staffing rating. The staffing rating is based on separate cut points for registered nurse (RN) hours and total nursing hours, (which are adjusted for case-mix and include RN, licensed practical nurse (LPN), and nurse aide hours.

By using CLA Clarity (CLA’s data analytics and consulting resource), the team realized that the operator’s adjusted hours for both RN and total nursing were significantly greater than the five-star staffing rating cut points, particularly for RNs. CLA estimated that the facility had an opportunity to save approximately $675,000 with no change in the staffing rating.

RN hours (annual) LPN hours (annual) Nurse aide hours (annual) Annual savings Staffing rating implication
Decrease by 44,231 Increase by 44,231 Decrease by 12,508 $677,118 Remains five-star

As part of the project, CLA also analyzed the potential savings if it were necessary for the same facility to manage to a four-star staffing rating. CLA Clarity is flexible enough to easily handle the additional complexity involved to analyze multiple nurse staffing combinations and assumptions, and provide relevant financial scenarios based on your specific staffing strategy.

Achieving results

As the facility entered into the budget process, leaders were able to weigh the financial implications of its existing five-star staffing model, as well as the financial impact of alternative staffing models. CLA Clarity enabled management to have thoughtful conversations with their clinical team and make informed decisions that will impact their financial future.

The insights garnered through CLA Clarity gave this provider a clear understanding of the implications of substituting the current RN-heavy staffing model with a model that utilized more LPNs. As a result of this analysis, the organization also created an LPN training program to increase the pool of LPNs in their market area, where it had been difficult to find LPNs.