Michigan nursing homes in distress (P. 3)
Four tell-tale signs that skilled nursing home operations are going in the wrong direction
This is a four-part series in which Roger Mali explores specific major operational indicators that a skilled nursing facility is in financial and/or operational distress. In this series, he will explore the finer points and nuances associated with: (1) low census and low referral rates, (2) poor collection rates on revenue and aging on receivables, (3) problems with turnover and misalignment of employees and (4) delinquent and outstanding taxes relating to the Michigan Quality Assurance Assessment Program (the Bed Tax).
III. Right people, right seats
It seems that nearly every book on corporate growth and practically every speaker on scaling your business has some version of packaging the concept of ensuring that within an organization there exists qualified employees who are working appropriate positions. The underlying concept is that an organization can have great employees and great leaders, but if they are in the wrong roles it can lead to disastrous results.
Currently, we are seeing a much stronger labor market in the skilled nursing and seniors housing space. Nursing agency and contract labor staffing have almost completely declined and turnover rates and open position postings are at pre-pandemic levels. It is hard to believe that just a few years ago nearly every sector of the healthcare industry was being impacted by high turnover due to burnout, overworking, competition within the marketplace, higher out of industry competing jobs and simple lack of interest for new workers entering the healthcare space. While most of these external factors are gone and most healthcare organizations can fill their front-line positions with qualified candidates, there are still signs of turnover in leadership roles, particularly in middle management.
Strong nurses can make strong unit managers; and strong unit managers can make strong directors of nursing. Sometimes it works and sometimes it does not. The jump from being a front-line worker to a manager or department head is significant. The healthy supply of front-line workers has led organizations to promote within, which is a good thing. But when organizations burn through unit managers, directors of nursing, regional leaders and other leaders, it is tell-tale sign of instability. Turnover in the management and leadership roles is often overlooked. It does not immediately show up in a payroll report or due diligence data. Longevity within the middle leadership roles is signal of strength; while conversely, the cycling through of people in positions
such as unit managers, dietary managers, MDS nurses and other department heads can be indication of operational problems.
The new face of turnover
When analyzing operational health, looking at employee turnover, overtime, agency usage and wages are obvious metrics. Trends and outliers in any of these categories are clear indicators that something is not going well. But when these metrics appear to be fine and there are still operational challenges, it is important to look at the middle level management: the unit managers, the shift supervisors, the MDS nurses, the department heads. Are the right people in the right seats? Or is there a very qualified front-line employee that has taken a larger role than he or she can handle?
When looking at operational distress, the lead indicator is quality and longevity of the department heads and unit managers. These are the leaders who are like lieutenants in the military, they are the backbone to the operations, ensuring that the top leadership objectives are met, while keeping the front-line employees motivated and engaged. When evaluating the strength of a skilled nursing organization, it is important to deep dive into the department heads and unit managers.
A few key areas to explore:
1. Longevity. How long has the department head or unit manager been with the organization and in that role? A nurse who has worked for years on the floor but only months or weeks as a unit manager can be problematic. If these positions are turning over, it is sign that something is not going well. Stable facilities will keep and maintain quality department heads and middle managers. Even when administrators and directors of nursing change, keeping strong team of department heads and managers is paramount.
2. Time spent working the front line. There is no greater signal of serious problems than when department heads and unit managers have to work the floor or pick up front line shifts. If the leader keep the employees coming to work and scheduled, there is problem. This will certainly lead to burnout. It may also be a signal that the department head or unit manager is in the wrong leadership role. This often occurs when an excellent front-line employee is promoted to a unit manager position, such as when a great floor nurse takes on a managerial role. While the nurse was excellent at resident care, it may be the case that he or she simply is not a good lieutenant. It happens. And when department heads and unit managers are working front-line positions, it is sign that they are not managing their department properly. The nuance is that it may be hard to spot because salaried department heads working the floor may decrease payroll and overtime. While that may appear to be good financially, not having leaders in their leadership roles will hurt clinical outcomes.
3. Training and Mentorship. Good leaders both receive and provide training and mentorship. To be an effective department head or unit manager, the leader must be able to receive direction and mentorship from the leaders above and cultivate the workers below. A great department head has great workers within the department who can manage and operate even without direct oversight. Check the training logs and confirm how much training the department head or unit manager is providing and receiving.
4. Time spent at facility. If you hear a department head or unit manager indicate that they “never leave the building” or “are always on call after hours,” you should immediately know something is wrong. While there is great appreciation for the dedication of hard-working leaders, the inability of front-line staff to do their normal work without constant supervision is an issue. We want committed and dedicated workers, for sure. But we also want to ensure that the building can operate successfully without constant oversight. The front-line workers need to be able to do their jobs. Department heads who micromanage may signal weak front-line workers. Department heads should not be at the building at all hours and train shift workers to handle their day-to-day tasks.
Focusing on the next level up from the front-line employees will give an insightful view into the skilled nursing facility’s overall operational health. The factors above require deep dive, beyond the payroll reports and data matrices that are typically available. Sometimes, the best gauge on what is going on is the simple check-in with departments heads: a 15-minute conversation of “How’s it going?” can be incredibly enlightening..