This article appeared in the January issue of Australian Ageing Agenda Technology Review.
A changing industry requires a changing strategy. Since the introduction of Living Longer, Living Better in July 2014, business intelligence is taking on a more important role to aged care providers. The smart operators need to become smarter to prosper. Kymberly Martin looks at how the Care Systems product suite enabled Hunter Valley Care to develop key business intelligence reporting and dramatically improve its financial operations.
When Dylan Walsh joined Hunter Valley Care as financial controller in August 2012 he encountered an interesting set of management systems. He found finance staff were predominantly doing redundant processes, processing up to 1,000 journals a year. So, asking Care Systems to implement the full complement of the product suite in order to ensure the systems integrated across all the financial modules was a priority. Walsh was blunt, telling Technology Review: “Doing journals does not make money and auditors hate them.”
Clearly what was required was a fully integrated aged care management solution that covered all business operations that delivered a better financial performance at any point in time. That describes Care Systems to a tee.
ExtraCare is the business intelligence component of the Care Systems suite and is Walsh’s favourite piece of software. “You cannot have a live dashboard if your data is old. For example, if data for accounts payable, resident debtors and payroll modules are not complete and integrated, you cannot run accurate general ledger reports as it won’t be complete. So you have to be confident the ledger is up-to-date. If one of my finance team does a weekly accounts payables process that includes entering and allocating invoices, once the transactions are entered I know I can immediately run reports and present this ‘real time’ information to the stakeholders I deal with. While Care Systems delivers an integrated environment, for us, ExtraCare pulls it all together.”
What Walsh is championing is the system’s ability to pull live data in to reports and KPIs of his own design. “Once you set the template up, next month’s job is done. ExtraCare is the great little module that brings it all together. It’s about cutting out a lot of the ‘grunt’ work and allows you to be a proper accountant and save the company money. We are always keeping watch on our changing regulatory environment and economic conditions, and if the other eye is not on the ball, your business might not be around for too long.
“Previously the industry had an open door, ‘let’s do business’ perspective, but it is now becoming more competitive. Governments, banks and government agencies are constantly requesting information and if you are still caught up preparing financial statements you are going to fall behind.”
According to Walsh, he can interpret the financial data built out of the business benchmarking and make operational decisions based on this information without having to prepare a myriad of reports. Customised information for the bank on the required dates can be ready with the click of a button, which in the past would take someone considerable time to prepare.
“Our business has a significant number of legal entities but the bank may only want to see maybe three. When operating multiple software systems, you cannot run consolidated reports that the financial institution requires, because the information is not available. Conversely, when modules are integrated, I select the legal entities I need and run the ExtraCare business intelligence, the banks reports are processed simply and without labour overload.”
As Walsh explains “we are using the ExtraCare financial system to benchmark and drive efficiencies in our business.” This is especially important when it comes to occupancy, which, he says, is what aged care is all about.
“Aged care facilities are required to daily track their liquidity ratio under the Aged Care Act so keeping a close watch on occupancy is vital in this industry.
“Banks request occupancy reports, but if we waited until generating these reports to check if we have an occupancy issue we have taken our eyes of the ball. This system gives us defined occupancy key performance indicator (KPI) levels. Because our occupancy levels are near full there is no issue but if there was I could investigate this straight away.
“My role is to take care of issues that materially affect the business which is what a financial controller should be doing.”
The next KPI Walsh will produce using ExtraCare is traffic light reporting on liquidity status, to instantly show the business is trading as a going concern and confirm that the accounts are true and fair, thanks to the integrated nature of the Care Systems product suite. “It tells me the business is liquid and can recalculate my solvency percentage, which again, is a requirement of the Aged Care Act.
“We may be a rural provider but we need our systems to operate as well as the best provider in the big smoke. We are all in the same pool.”
Support from Care Systems is excellent and very hands on. “They helped design things properly from the start and gave the level of training required to generate these reports. There is no need to rework the system as the information is delivered automatically. What you put in and what you pull out is exactly what you want.”
He adds that it eliminates the need for an accountant or financial controller to prepare reports. Not only does it make for a more profitable business it also frees up staff for other activities that go towards driving a successful business.
Aside from the cost savings, the software system also protects a director’s position. “If something went amiss with our working capital ratio and we really started incurring credit, it would not be found by reviewing an invoice. You have to do a working capital calculation, a tool easily developed in this system that immediately lets you know if you are in a normal band. If we were operating outside this band, the system would alert us to the problem.”
The system was installed in a staged process commencing in July 2013. The implementation schedule was set in place to match organisational resources with required functional outcomes. The systems can be implemented in a single stage or in multiple stages depending on the client’s needs. While the team at Hunter Valley Care is relatively small with 400 residents and 400 staff, Walsh expects the business will double in the next five years. A 2,162 unit independent living complex is being built at Marmong Point, and a 140-bed aged care facility is planned for Elermore Vale.
SOFTWARE THAT DOES THE JOB
Internal benchmarks have been developed for the group’s four facilities. The product suite has live data available for Walsh to interrogate the general ledger and sub ledgers. All operational costs are contained in one dashboard that gives the operator the ability to customise management reporting, similar to a profit and loss account. Each facility’s monthly and yearly spend is highlighted and itemised in colour charts. Now, for the first time in a long time, the business can systematically benchmark and conduct a high level of management review of each facility in real time.
“We are able to drill into the net performance of each facility’s income and expenditure levels, in other words, examine the bottom line and calculate why one facility is getting more revenue or incurring more expense than the other,” Walsh says, “such as examining food costs per bed day per month for one of our facilities compared to the others.”
“It has also enabled us to pick up on areas that are operating out of range in terms of staff hours. We can look at that facility and ask why it is costing this amount in staff?”
Another is the variable cost of electricity because more residents results in higher consumption. “Why is one facility costing
$200,000 in power and another facility costing say $80,000 less with the same number of residents? We know one of our lifts uses 300W/Hr of power on idle capacity and the same lift does 900W/Hr in idle capacity at 1am in the morning. Obviously there is something wrong with that lift. You won’t be aware of this problem by looking at a power bill.
“Data from a real time power tracker tool, is incorporated in to the benchmarking, and can identify something ‘off trend’ in our power consumption through monitoring air conditioning, lighting, kitchen and lifts. Trends can be measured from that data and the appropriate decisions made at an asset level, such as replacing the lift, if the payback is feasible.”
Walsh will continue to optimise and fine tune the system in the coming months. Board reports have been simplified with graphs that clearly detail occupancy per month, occupancy year-to-date as a percentage for each facility and other key organisational and external reporting requirements.
All programs have been updated to ensure compliance with the recent legislation changes. The ClientCare module was added this year to meet the new Living Longer, Living Better rules. This automatic client billing, subsidy and refundable accommodation deposit management system automates all calculations, and electronic payments. Hunter Valley Care have also recently installed the TimeCare biometric time and attendance system, are currently transitioning to emailing client statements and employee payslips, and electronic employee self-service. Once these features are enabled, it will eliminate most paper based reports, including the need to mail out 400 pay slips and 400 statements to residents, carers and staff – a big cost saving.
Care Systems sales and marketing director, Paul Johnston uses the expression “Efficiencies through Enablement” when describing the additional productivity that can be gained through the use of an integrated management system. “We actively encourage input from the client base as to how they want the system to evolve. Whether it is mobile applications, integration to third party vendors or providers in procurement, Care Systems has an active development pathway delivered by our dedicated, locally-based development team.”
Contact: Paul Johnston, Sales & Marketing Director, email@example.com, 0431 396 399.