This article is sponsored by Medtelligent. This article is based on a Senior Housing News discussion with John Shafaee, Founder and CEO at ALIS by Medtelligent. The discussion took place on November 10, 2022 during the SHN BUILD Conference in Chicago. The article below has been edited for length and clarity.
Senior Housing News: I guess to get started, what is the state of technology in assisted living? If you could talk a little bit about how it’s changed since the onset of the pandemic, I think that might be a good place to start.
John Shafaee: If you look at how technology has entered assisted living over the past 10 years, there was a huge push in 2014 and 2015 to go paperless. Technologists were not really focused on what the communities needed, but there was some penetration and adoption, and then we had a trough of disillusionment when people were not getting the promised values out of technology.
Then, in 2018, people started realizing how they can start to leverage technology to really optimize their business, and we started to see a lot more focus on care. Everybody wanted to know, how can I track care? How can I measure time spent? That coincides with the cost of labor going up. It coincides with the cost of care going up. Back when we started our business, something like 75% or 80% of the revenue was pure rent. Now, it’s closer to 40%, 45%, 50% depending on how optimized your care plans are. It also coincides with higher acuity residents coming in.
Once COVID hit, we saw a massive spike in demand. We actually grew quite a bit during COVID, simply because of some of the things that paper can’t do. If you want to check to see how many residents have had their COVID shots, if you want to see how risky your community is, you can’t do that by looking at a bunch of printed-out sheets of paper or local Excel files. Within the first week or two weeks of the lockdown, we went ahead and built a COVID center. That was a massive help to our communities, and it also attracted a lot of new clients as well who were trying to get that insight and coordination.
That’s what happened during COVID. Now, when you look at what’s happening in the current state, most of the communities have some technology. It looks like a tapestry of stuff. They bought things that were shiny and exciting, but adoption is extremely low, and there’s not a lot of data in these systems, unfortunately, even though the building is, in my words, leaking data on a daily basis.
SHN: From a technologist’s point of view, since this is the Build Conference, what are some of the most common mistakes you see senior living providers make with tech stacks in new buildings, and what can they do to avoid those mistakes?
Shafaee: First, they assume that technology will fix all of the problems. If I bring this thing in, the fact that I don’t have good processes in my building will automatically disappear. Technology will not do that for you. You have to have good processes, and then technology will help amplify and make it more efficient. That’s one issue we see.
Second, they don’t have the end in mind. They’re buying technology sometimes to deal with a specific problem, but they’re not looking at the big picture. The thing about technology is that you just can’t see it. That’s the difficulty about it, but it is actually no different than building a building. It has the same components to it, that has the same efficiency. There’s no central thought around, how am I going to connect all these pieces together? What is my end goal with it? What do I expect to get out of the system from a data perspective, from a performance metrics’ perspective?
They go into it head first, pick the shiniest thing, and without a strategy. I can’t blame the communities because the majority of them do not have a CIO or a technologist on staff to help guide them. People in my cohort go out of their way to make it look super complicated and complex so we create a barrier for ourselves.
The third, and I guess final mistake that I see people make is they don’t realize how much technology can actually help them. They know they have to have it, they just don’t know why or in what capacity. Having the plan really helps with that, being consultative helps with that, and really start with the end in mind, that when this is all said and done, what do we hope to improve? What do we hope to achieve?
SHN: How should providers see the EHR fitting into their communities today and what should they expect from it?
Shafaee: Think of it this way, when you buy a laptop, by itself it is a brick. The thing that makes that laptop work is the operating system that sits on top of it. I view assisted living very much the same way. The edifice, the building, and the activities with it is like the laptop, and the EHR is really the operating system for that building. It is the system of record. The way you want to think about it is, that is where my authoritative data lives in terms of who is here, who is not here, who is interacting with who, what’s actually happening?
The interesting thing is, I don’t come across a lot of communities that look at EHR that way. They look at EHR as a tool for the nurses. It’s like, “I’m just going to give this to my nurse. My nursing staff, my care staff, my wellness director, keep them quiet, they’re satisfied. I’m just going to go off and do my own thing.” When they should actually flip it and look at it as the tool for the enterprise, as the thing that actually is going to pull and very much like a massive magnet, pull all the data within the community together in one place and make it available for review.
I also see a lot of times, the owners and operators, they don’t make strong demands on the EHR. As a result, the EHRs don’t evolve, because if there’s no demand there and people are okay with mediocrity, then let’s just roll with it. The way we’ve approached the market is, we said, “Look, we’re not going to do home health, we’re not going to do skilled nursing because we want to be the best in this space, and assisted living is a delicately complex business to run.” Your margins are things that shift on you overnight in an instant, and then you’re always looking backward two months to see what happened. The EHR can help with all of that because it has all the data and it can tell you more in real time what’s going on. It just has to be good. It has to be something people love and can be adopted.
SHN: How can they change that mindset? You said flipping it, is there anything that you could advise, like an organization that may be not getting the most out of their EHR?
Shafaee: Yes, to think about the data that the EHR has, start there. The EHR will tell you how much time staff is spending on care. It can tell you, in real-time, what the risk is in the building. It is also a way to actuate change in the building. If you want to put a procedure in place and change what people are doing and bring efficiency, the EHR can do that. I think the best approach is for the management to actually think about the EHR as a valuable source of data for their business, as opposed to a thing that just the nurses and the clinicians deal with.
My philosophical view on assisted living is that it’s like a consulting business. You’re buying labor time at, let’s say, X dollars an hour, and you’re delivering that at Y dollars an hour, and the entire financial outcome of your business is in the hands of a nurse. The nurse decides, the care aides decide whether you’re profitable or not, so you absolutely should focus on the EHR, and actually, see what you can get out of it, and also demand that you get the information that you need to run your business.
SHN: On that note about data, you have over 15 years of data in your software, what have you learned from it?
Shafaee: We did a large length of stay study where we looked at that 15 years of data, and a lot of great things came out of it. I’ll start with something that’s not shocking. There’s top-line revenue tied up in length of stay. Every operator that we work with is heavily focused on occupancy. Filling the beds is the main focus, which makes sense, as that is the big driver in terms of revenue. That is a requirement, it’s a no-brainer. Very few, however, also focus on length of stay. When I dug into it, it’s because they feel like they can’t do anything about it, so I wanted to know what drives length of stay.
It turns out that two things contribute to about 75% of the factors that drive length of stay. The largest being staff tenure. The most unbelievable thing that we learned is from drawing out the resident’s length of stay by days. Let’s say you come up with a number, like 480 days for the resident’s length of stay. And then you do the same for staff; you’re going to come up with 480 days for your staff.
Now think about that. You can’t force a resident to stay, but you actually can optimize and think about what causes your staff to leave. That was shocking, and that contributes to about 54% of the first large factor impacting of length of stay: Staff tenure. An easy way to think about it is if you can get your staff to stay one day longer, your residents will stay one day longer. It has that magical lift.
Then we came up with a curve that puts our communities on a spectrum, from the lowest length of stay to most optimal. It’s very difficult to stay 100% occupied for long periods of time. We can tell you how much revenue you’re leaving on the table, simply because of your length of stay. Now the big question becomes, how do you actually drive up that length of stay and what do you get, right? If you move that length of stay up by an average of one month in the community, the curve tells you, you’ll make roughly about $160,000 a year more in a 65-bed community. A portfolio of 10, that’s about a million dollars on the table.
The way you actuate that change is really on the staff. What drives the staff? People think it’s salaries. Our data showed that salary, to a certain extent, does drive staff tenure.
However, a much bigger factor is the relationship with management. It’s their direct managers, it’s how they’re treated, it is clarity within the organization, and it is having that purpose and mission front and center.
SHN: How can operators best approach this data that they may be collecting now? There’s been obviously a shift where it seems like there’s a lot of data and some providers are starting to actually utilize it. Can you share any do’s and don’ts relative to maybe developing a strategy, and also connecting the data with outcomes that the providers might be seeking?
Shafaee: Definitely. Be strategic. As I was mentioning, the EHR can be a massive starting point for you. You can demand from your EHR to pull the data that’s smaller in the community together. To give an example, nurse call data. Most communities straddle having nurse call data in one system, and then their EHR data in a separate system. You can demand that that data can be pulled into the EHR and analyzed as a full resident record. That saves you from having to pull that data together.
Don’t try to be a business intelligence shop. Take a business intelligence tool, a dashboarding tool that’s already built and available and start with that. Second, really start to identify your major KPIs, your business KPIs and how they relate to what’s happening in the building. What are the things that you care about? What is your KPI? The top three KPIs that you worry about. Then attempt to leverage technology to answer that. I use this model of how data works and how KPIs work as a circuit. It’s like a three-node circuit.
If you want to get the light bulb to turn on, you need all three pieces. First, you have to have proper adoption of that technology. This is something that most communities struggle with because a) the tools that they picked are not the right ones; b) it wasn’t built for assisted living or their environment; and c) it’s too complex. It’s not easy to use for them, so they don’t adopt it. If you don’t have data, the first node of your circuit is broken.
The second node is the ability to visualize that. That’s the BI portion that I was talking about, the business intelligence portion. If you have data and it’s stored somewhere but you can’t see it, it’s useless. Then the third part of that circuit is that if you see it, but you can’t actually cause that change to occur in the building, nothing will change. You’ll just see a bunch of numbers that look interesting but no actual change occurs in the building. To do that, you have to connect all those KPIs back to the building. It has to be in their hands. The easiest thing to do is have your management discussions around those KPIs. When you’re having your weekly meetings, bring them up, talk about it, so that the people that are on the floor who can do something about it, are aware and worried about the same things as you are.
ALIS is the go-to solution for growing assisted living and memory care portfolios because it is easy to use and solves real world, everyday problems like risk management, revenue capture, compliance, and enterprise reporting. To learn more, visit: https://www.medtelligent.com/.