< Culture Change

Transformation Gives Impatient Author Hope

Kathy Aube figures her organization was about $300,000 further in the black last year thanks to a “person-centered” model of caregiving that has resulted in higher staff retention and resident census.

The person-centered approach at Lenawee County Medical Care Facility in Michigan, where she is the administrator, began when the organization adopted the Eden Alternative in 1999, and evolved with its transition to a household model in 2003.

“We hired 56 percent fewer people in 2006 compared to 1998 at a total cost savings of $102,974 [in] recruitment, training and orientation,” says Aube in a letter to Action Pact.

Occupancy, at 97.8 percent in 1998, was 99.8 percent in 2006, resulting in a net gain of $184,625 by her calculations. That plus savings in higher staff retention is $287,599. The cost of transition, including staff training and education, additional activity supplies and activity outings, was recovered within 2-3 years, reports Aube.

Lenawee is also saving money on liability insurance: “The carrier gives us a better rate because of the Eden Alternative - at least, that is what my insurance man thinks,” says Aube.

Overall, operating costs have remained about the same as before the transition to households. Savings in staff retention is ploughed back into the budget to increase staffing - especially activities staff to give residents more options for how to spend their day.

Since the move to households, Lenawee maintains two waiting lists: one for nurse aides seeking employment at the innovative facility, the other for new residents wanting to get in.

“The community likes what we are doing and especially likes private rooms,” notes Aube.

Elders Flock to Private Rooms at Parkside

That sentiment apparently is shared by folks in Hillsboro, Kansas, where Parkside Homes, Inc., in July 2007 began moving nursing home residents (regardless of their ability to pay) into households with all private rooms and staffed by self-led work teams.

The organization initially planned to build five, free-standing houses of 12 residents each to replace its conventional, 60-bed facility. But demand is so strong, a wing of the old building was converted to private rooms, increasing the number of licensed beds to 69, says David Slack, a consultant to Parkside and Executive Vice President at Aging Research Institute (ARI).

Slack provides operational, managerial and developmental consultation as part of ARI’s services for non-profit caregivers.

“In the markets I am observing, occupancy [in conventional facilities] is going down. If there’s a person-centered program in that market area, that program is thriving,” he tells Action Pact.

Time to Invest

The Parkside and Lenawee experiences boost the assertion by author Beth Baker that “we-can’t-afford-it” is no excuse for putting off culture change.

While turnover and shortages of nurses and nurse aides have created a national crisis in long-term care, “transformative” nursing homes enjoy much higher than average staff retention and occupancy rates, proving culture change is not just the right thing to do for caregivers and residents, but also is an economically sound strategy.

Transformation is about changing attitudes, training staff and building relationships. While that is difficult, it costs relatively little, Baker reminds us in her recently published book, Old Age in a New Age: The Promise of Transformative Nursing Homes.

“Some of the very best [transformed] nursing homes serve primarily people who are on Medicaid,” she notes.

Of course, costly renovation or new construction often is an important part of an organization’s transformation strategy. But with thousands of aging nursing homes already in critical need of a facelift or more, what better time to invest in culture change?

The High Cost of Turnover and Poor-Quality Care

The potential for less staff turnover alone should catch the attention of cost-conscious nursing home operators, says Baker. Annual turnover and absenteeism costs the average nursing home $225,000. Replacing a single aide requires at least $2,500 for advertising, recruitment and training.

One organization referenced by Baker saves about $4 million a year now that it no longer must hire temporary staff from employment agencies. Turnover of direct care staff plummeted to about one-third its former level after the facility (St. John’s Home in Rochester, NY) became an Eden Alternative home. Meantime, customer satisfaction charts climb higher year-by-year.

Less turnover and absenteeism contribute to more efficient caregiving and better quality outcomes, leading to lower operating costs - to the tune of $13.50 less per patient day on average, according to one study cited by Baker.

Caregivers who stay on the job have more opportunities to get to know residents and family members, which may in turn lower the chance of lawsuits. As one source quoted by Baker said, “Transformative nursing homes now know what physicians know: The best way to keep lawsuits away is to have good relationships.”

Nursing home residents typically improve their eating habits and use fewer medications when given personalized care, appetizing food and the choice to eat when they are hungry rather than having to adhere to a rigid dining schedule. Such practices, notes Baker, also help lift the organization’s bottom line:

• Food waste and the need for costly dietary supplements and specialized diets decrease with better eating habits and happier residents. Incontinence and the need for related supplies decline.

• For every dollar spent on medications in nursing homes, $1.33 is spent on the drugs’ side effects which may include increased risk of falling, bedsores, strokes, cognitive decline and decreased mobility, among others, according to a physician cited by Baker. 

Still, don’t expect to actually lower overall operating costs through culture change. As with Lenawee, savings in one area is typically used to improve services in another to make it truly person-centered.

Operating costs in the conventional and transformed models are about the same over the long haul, says David Slack, “but there will be a much better quality of life with higher resident and employee satisfaction.”

Financial Risks of Transformation

As with any major change, culture transformation holds financial uncertainties. Backsliding into the old ways or not completing what you begin is perhaps one of the more common perils on the road to culture change, says Slack.

“Leadership has to be totally bought in… if you gear up staff and address training and the direction of the organization and then don’t follow through, that’s a risk,” he explains.

Another is to spend money and time creating household or neighborhood-like areas but fail to adequately invest in training, strategic planning and reorganization.

“Person-centered care is a program, it’s not a building,” he adds.

Presently there may be financial risk because culture transformation is still “cutting edge.” That risk can be minimized by studying what has been learned by those who have gone before, says Slack.

But even with the best planning, operating costs generally increase during the transition to the new model, he warns. Staff must be trained, and there is often confusion and trying times as workers and residents learn how the new model works. (It also is when staff turnover may actually increase for a time, says Baker.)

“The more you are prepared for that, the better you can minimize these costs,” says Slack.

Ultimately, the biggest risk of culture change may be to wait too long to begin, as LaVrene Norton and Steve Shields warn in their book In Pursuit of the Sunbeam, a practical guide to transformation from institution to household: “Put bluntly, if you don’t physically and culturally reinvent yourself, a competitor will likely beat you to the punch.”