Menorah Park is a $100 million-a-year non-profit senior living complex in the Cleveland suburb of Beachwood, Ohio, that provides residential options and health care services guided by Jewish values.
Founded in 1906 as the Jewish Orthodox Old Home, the home for the aged quickly outgrew its space and moved twice before opening in its current 42-acre campus in 1968, where it serves more than 1,000 older adults each day (residents and non-residents).
Menorah Park boasts an aquatic therapy center, the lowest hospital readmission rate of any post-hospital rehabilitation care provided in northeastern Ohio, and dozens of national and local awards.
However, one thing it did not have prior to using Datarails was good visibility into the revenue of its many business segments.
Datarails has enabled Menorah Park to increase its revenue 10 percent due to “smarter reporting” and save 40-60 hours on Medicaid cost reports, as well as millions of dollars in projected savings due to daily tracking to monitor the link between staffing and revenue.
The problem: Complex business, slim margins, minimal visibility
Menorah Park provides multiple different types of senior living accommodations and services, including skilled nursing – two Menorah Park sites are the two largest skilled nursing facilities in Ohio – as well as independent living, assisted living and outpatient therapy.
“We have this big business that is complex, so there was a need for a more sophisticated tool” to track the business and help with financial planning and analysis, said Menorah Park CFO Brenda Satterfield.
But while the financial information was stored in the organization’s ERP, it was tough to see the connection between the revenue and the units and payer types associated with that revenue.
Improved visibility was particularly important given the slim margins in health care, which make timely and effective cost management so crucial.
In addition, the organization was spending many hours on complicated federal reporting for Medicaid patients.
“Datarails gives me the ability to get at the data better. I have the data where I want it.”—Brenda Satterfield
CFO, Menorah Park
The solution: ‘Datarails is easier to adopt’
Menorah Park feeds data from its ERP into Datarails in order to get greater visibility into the sources of each revenue stream and trends among multiple payer types such as Medicare, Medicaid and private payers.
Now the organization can understand financial trends that link multiple data points and are fundamental to how the business operates, like the average rate per day for Medicare patients at its skilled nursing sites, payer type trends in outpatient therapy, and average payroll rates for housekeeping and administration.
With Datarails, business leaders of specific units can now get all their metrics together in the same report and refresh the report for updates, said Satterfield.
“Datarails gives me the ability to get at the data better,” she said. “I have the data where I want it.”
Satterfield was drawn to Datarails after having used several other FP&A solutions because she found the platform to be powerful yet easy to adopt, without requiring a full-time administrator to maintain it as some other tools do.
“Datarails is easier to adopt,” she said. “It’s the nice middle ground between easy to use and it’ll let me do anything.
Satterfield also wanted a solution she could use with Excel.
“I love the fact that it’s in Excel, because it’s just easy,” she said. “Most finance people are heavy Excel users. It’s the thing that you’re used to performing in. It’s our language.”
“I love the fact that it’s in Excel, because it’s just easy.”—Brenda Satterfield
CFO, Menorah Park
The impact: Increasing revenue 10% because of ‘smarter reporting’
By linking multiple metrics and making the connections between them visible, Datarails reports make it easy to manage costs by spotting the reason for profitability gaps and enabling the organization to take specific action to stem costs and increase revenue.
For instance, Menorah Health’s home health business serves patients with Medicare, patients with commercial insurance and those using credit payments. Business leaders can now see whether a decline in profitability is driven by decreased patient volume or a change in payer types, and take action accordingly.
“We have very slim margins in health care, so our industry is more about cost management, and a lot of it comes down to good reporting,” said Satterfield.
In one case, Datarails reports showed that the hourly cost of services rendered for one type of home health care was lower than the hourly rate Menorah Health was charging – and responded by implementing higher rates, which increased revenue about 10 percent, Satterfield said.
“Because of that report, they were able to say, ‘We need to increase our rates so we can actually make money in this business,” she said. “It’s smarter reporting.”
“Even though it’s nonprofit,” she said, “we still have to make a profit.”
“We have very slim margins in health care, so our industry is more about cost management, and a lot of it comes down to good reporting.”—Brenda Satterfield
CFO, Menorah Park
Millions of dollars in projected savings
Menorah Health is also moving toward a daily payroll management project using Datarails, which Satterfield projects will ultimately save the organization millions of dollars.
Managing payroll costs is crucial because they constitute the bulk of the business costs.
“We are 75- to 80-percent payroll-driven,” said Satterfield. “You can fixate on every food cost, but nothing really matters as much as payroll.”
“When you think of our $100 million, this is $75 million of it, so it’s the biggest deal,” she said. “This literally could save us millions of dollars.”
The project enables day-by-day personnel reporting and connects it to daily revenue, which facilitates greater agility as the organization is able to make adjustments much faster in an effort to get the balance right – on a daily basis instead of three weeks later, when “it’s just too late” to make a big difference.
With the new project, said Satterfield: “Every day I know who was in my building in every department, and can compare it to actual revenue unites per patient – so we’ll be able to make adjustments faster. That’s the key. That’s really a big deal in this industry.”
This gives business leaders greater oversight, so if a specific unit is overstaffed or understaffed, the problem can be fixed immediately.
Saving 40-60 hours for each Medicaid cost report
Medicaid requires highly granular data for the cost reports that Menorah Health needs to prepare in order to receive federal funds, and putting that together manually is pretty labor-intensive.
The cost reports need to not only show data like the number of Medicaid patients, but must also meet predefined structure regulations, and used to take two accountants about 20-30 hours each.
With Datarails, the Menorah Health finance team is able to save that time through customized automated reporting.
“You just design it, run it and download it,” said Satterfield. “The rest of my staff is so grateful. It’s saving labor in my department.”