July 2008
Focus: Meaningful Management Information
The key to meaningful management information is the following:
- Timely (available to effectuate adjustments to operating practices, expectations and planning efforts);
- Relevant (contains information that facilitates decision-making); and
- Understandable (able to be used by the intended reader).
Given the dynamic nature of the operations of a CCRC, it is critical that meaningful management information is disseminated to senior and middle management on an ongoing basis and that higher level data be summarized and communicated to the board, creditors and other users of management information to facilitate their oversight and interests in the organization.
Meaningful management information includes financial, operating and quality control data (for a CCRC, this is often healthcare indicators) that assists in answering the following types of questions:
- How are we doing relative to our planning efforts and expectations (a comparison of actual data to budgeted date)? Examples include variance reports of financial, operating and clinical data. In a healthy organization, senior and middle management already know what is happening so that commenting on the cause of variances and the requisite corrective action is part of an established process.
- How are we doing relative to the expectations of external stakeholders that can significantly influence the ability of the organization to fulfill its mission? For example, satisfaction of debt covenants, compliance with regulatory requirements, and fulfilling the needs of other key external constituencies.
- How are we doing relative to the expectations of our clients (residents, families of residents, prospective residents)?
- What can we glean from looking at data over time? From a big picture perspective, are we moving in the right direction or are falling behind in accomplishing our mission?
Often times, periodic reports contain a lot of data, but little synthesis or analysis of the data. Additionally, the reports are often prepared in a format that may make sense to the report preparer, but is not understandable to the end user. In the absence of understandable reports, synthesis and analysis, there is great potential for frustration between report preparers and report users. This leads to an inability to answer the aforementioned questions readily from the reports. Additionally, if the accounting department and operating departments are having difficulty closing the reporting period and distributing reports in a timely fashion (financial and operational statistics), it is likely that middle managers will find the data largely irrelevant for decision-making purposes.
We believe that a two-step approach to providing meaningful management information is worthy of consideration in order to manage effectively.
Step 1: Develop controls that measure key non-financial data on a daily or weekly basis (by pay period for labor data) that drive both revenues and expenses:
- Occupancy by level of care (daily census) compared to budget
- Payer mix by level of care compared to budget
- Labor hours by level of care compared to budget or staffing levels
- Cash and cash equivalents balances
Step 2: Invest energy in improving the monthly closing process and the quality of the reports that are generated so that meaningful information is generated and used in a timely fashion. This will likely include an assessment of the closing process and the ability to restructure reports electronically to provide more meaningful data for decision-making. The end product of Step 2 would be to produce a monthly management report that would be used by senior and middle management to manage the operations of the community.
The key to meaningful monthly or periodic reports is that the data is accompanied by narrative, graphical and trend analysis that provides context for the monthly report; identifies issues that are of most importance; and proposed solutions to address those challenges.
Events
Parente Randolph’s Senior Living Services specialists will be speaking at or attending the following upcoming conferences:
Aug 3-6 |
PACAH/CCAP - County Commisioners Association of PA
"Understand Your Risks and Manage for Success"
Presented by Candace McMullen and Sophie Campbell
|
King of Prussia, PA |
Sept 8-10 |
AOPHA - The Advocate of Not-for-Profit Services for Older Ohioans
"Creating a 'Boutique' Nursing Home"
Presented by Sophie Campbell and Allyson Preston
"Exploring a New Independent Living Option that Reaches the Middle Market"
Presented by David Gottshall and Alicia Titus
"Techniques to Help you Build Referrals and Increase Census"
Presented by Pam Richmond
"The Future of Home and Community Based Services"
|
Columbus, OH |
Sept 10-12 |
NIC - National Investment Center |
Chicago, IL |
Sept 16-19 |
AANAC Fall - American Association of Nurse Assessment Coordinators |
Philadelphia, PA |
Sept 22-25 |
PHCA - PA Health Care Association |
Champion, PA |
Oct 5-8 |
AHCA - American Health Care Association |
Nashville, TN |
Oct 12-15 |
NAHC - Nat'l Association for Home Care & Hospice |
Ft. Lauderdale, FL |
Oct 12-15 |
AAHSA - American Association of Homes & Services for the Aging |
Philadelphia, PA |
Contact:
Douglas Berry, Principal
dberry@parentenet.com
717.620.4772
Jennifer Schwalm, Principal
jschwalm@parentenet.com
717.620.4786
For Senior Living Assurance and Tax Services:
Mark Ross, Principal
mross@parentenet.com
570.820.0311
Brian Gabriel, Principal
bgabriel@parentenet.com
215.972.2381
Ben Jarmul, Principal
bjarmul@parentenet.com
412.697.6437
Parente Randolph's Senior Living Services Group provides the expertise you need to position your organization for the future. Our clientele includes providers and third-party professionals of Retirement Communities, CCRC's, Age-restricted Housing Providers, Assisted Living, Nursing, Home Health and Community Based Services.
www.parentenet.com/senior_living_consulting/
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Parente Randolph, LLC | 4550 Lena Drive | Suite 200 | Mechanicsburg, PA 17055
