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After deciding to start a nursing home, you will need to know how to run a nursing home. There are two clear options ahead of you: for-profit nursing homes and non-profit nursing homes. According to the Centers for Disease Control and Prevention (CDC), approximately 69.3% of the 15,600 nursing homes accounted for in the US in 2016 were for-profit.

For-profit nursing homes are often investor-owned, with shareholders who may or may not have any direct involvement in the management of the facility. Non-profit nursing homes, on the other hand, can be government-run or privately operated. Irrespective of ownership type, all nursing homes are licensed and regulated by the Centers for Medicare and Medicaid Services (CMS).

Regardless of the decision one makes, one will still need some advice for providing the best care services at a nursing home. Here are six such tips for how to run a nursing home: 

1.   Ensure your facility meets licensing requirements

Nursing home licensing requirements can vary from state to state, but there are two main certification requirements for nursing homes: 

Medicare certification is required to participate in Medicare and Medicaid programs. In order to become Medicare certified, a nursing home must meet certain standards set forth by the Centers for Medicare and Medicaid Services (CMS). These standards cover a wide range of areas, including quality of care, fire safety, and minimum staffing levels.

Accreditation is another way nursing homes can show that they meet high standards of quality. While accreditation is not required, it is something for which the best nursing homes aspire. There are a number of different organizations that offer accreditation, but the most well-known is the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).

It is worth noting that nursing homes that are both Medicare certified and accredited by organizations like the JCAHO are considered to be of the highest quality and are more likely to have better census numbers.

2.   Don’t be cheap with necessary improvements

Facility and medical equipment improvements are absolutely essential in providing quality care for residents. Unfortunately, some administrators may be tempted to skimp on these improvements in order to save money. However, this is a huge mistake that can ultimately lead to poorer care for residents and more expensive problems further down the road.

There are many reasons why nursing homes should never skimp on facility and medical equipment improvements. First and foremost, these improvements are essential in ensuring that residents receive the best possible care.

Additionally, poorly designed facilities and poor equipment can be dangerous for both residents and staff, potentially posing serious safety risks. In this way, skimping on facility and medical equipment improvements can actually end up costing more money in the long run, as a facility may be subject to fines or lawsuits in the event of resident harm.

One area on which one must certainly spend money is effective long term care software for the facility. LTC software is a tremendous resource for managing finances, staff, and clinical care in an efficient and organized manner. A nursing computer software system is an investment that will easily pay for itself many times over.

3.   Hire a staff that knows how to work together

It’s no secret that today’s nursing homes are understaffed and overworked. With so much responsibility on the shoulders of just a few staff members, it’s crucial that everyone is working together as a team. A well-run nursing home requires skilled and coordinated team members who can communicate effectively and work together to provide the best possible care for residents

It is important to look for individuals who are not only skilled in their field but also work well in teams. A big part of knowing how to run a nursing home effectively is being able to find individuals with good communication skills, a collaborative mindset, and commitment to the mission and vision of the organization.

4.   Have a clear business plan

For-profit nursing home investors will need to know the 15 simple steps to opening a nursing home, one of which is creating a business plan. Even if you are not looking for outside investors, a solid business plan is an important document to have as it will help you map out your goals and how to achieve them.

An investor researching how to run a nursing home.
Even if you are not looking for outside investors, a solid business plan is important for mapping out your goals and achieving them.

A nursing home business plan typically includes:

  • An executive summary
  • Company overview
  • Business goals
  • Product or service description
  • Industry and market analysis
  • Marketing and sales strategy
  • Operations plan and financial analysis
  • Financial projections

5.   Regularly update staff training

Staff members must constantly keep up with new developments in their field through continued education and training. That way, they will be well-informed as to the latest techniques, treatments, and technologies that improve the quality of care.

Regular staff training also decreases the likelihood of medical errors and accidents by keeping staff members up-to-date on medical best practices, ensuring residents are receiving the safest and highest quality of care possible. 

In addition to medical training, staff should receive EHR training and know how to use the nursing home EHR to document care efficiently and accurately. This will minimize errors, result in more reimbursement, and reduce the burden on staff, as they will save time from not using paper.

6.   Put in the work to get a CMS five-star quality rating

The CMS five-star quality rating is the key metric in the industry. Facilities with a high rating receive more funding and more referrals. Sometimes improving your rating is as simple as giving residents a sense of empowerment or more options for activities. Other times, you will need to improve coding accuracy or meet the demands of employees to improve retention. We will discuss these practical ways to improve your rating further below. 

Nursing Home Business Profit: What To Expect

Running a nursing home is a business, and like any business, it requires careful planning and management to ensure you end up with a nursing home business profit.

An MDS nurse and the nursing home administrator discussing the nursing home business profit.
When learning how to run a nursing home, it is important to remember that a nursing home business profit is essential for the success of the facility.

Naturally, the more amenities and incentives the facility offer residents, the more they can charge each resident. However, these amenities—such as a swimming pool, tennis court, or a gourmet restaurant—need to be regularly maintained. And that cost has to be balanced with what residents can afford to pay. 

One thing to note remember when thinking about how to run a nursing home is that a facility can charge between $2,000 and $4,000 per resident per month. And these prices fluctuate depending on the location of the facility and the additional amenities provided in the nursing home.

As for the exact amount nursing homes make, unfortunately, most facilities are not forthcoming with this information. However, with the number of US citizens aged 65 and older expected to reach 80 million by 2040, long term care providers are here to stay.

Thus, when learning how to run a nursing home, it is important to remember that a nursing home business profit is essential for the success of the facility. Without a profit, it would be difficult to cover all of the necessary costs and ensure that the nursing home can provide quality care for its residents.

Contact us here if you would like to demo an EHR that helps you smoothly run your nursing home.

How To Get a High 5-Star Nursing Quality Rating

We briefly mentioned that the CMS 5-star nursing quality rating is a key metric in determining the quality of care provided in a nursing home. This means that if an individual wants to successfully learn how to run a nursing home, they should be aware of the qualities that residents look for in a good nursing home, as they ensure that residents receive the best possible care and quality of life as they age. These qualities include:

  • Focusing on residents: A good nursing home puts its residents first, ensuring they provide top-quality care and services that meet the unique needs of each individual. They also create a warm and welcoming environment where everyone feels they belong. The nurses in a good nursing home will work with each resident to create a care plan that meets their specific needs in their care plan software. In fact, residents should be the focus from the very beginning of your nursing home business plan.
  • Empowering residents to make their own choices: A good nursing home recognizes that its residents are individuals with their own preferences, needs, and rights. They empower their residents to make their own choices about their care, encourage as much independence as possible, and allow them to spend their days as they want. This includes everything from the activities in which they participate to what time they go to bed at night.
  • Having adequate, excellent staff: The best nursing homes have a nurse-to-resident ratio that allows for individualized care and attention. Research suggests that the ideal nurse-to-patient ratio is 1:5. Another important factor in providing excellent care is ensuring that all staff members (medical and non-medical) are properly trained in how to provide the highest quality of care and quality of life to residents. The best nursing homes also provide ongoing education and opportunities for staff to grow and advance in their careers, not to mention training on how to use the facility’s nursing home software.
  • Flexibility with visiting hours: It is important to have a policy that meets the needs of both residents and their families. Flexible visitation hours are a great way to accommodate everyone’s needs. This can help reduce stress for both residents and their loved ones, as residents can have visitors when they’re feeling up to it, and families can visit when it is convenient for them.
  • An abundance of indoor and outdoor activities for residents: A good nursing home will have robust indoor and outdoor activity programs that meet the needs and interests of all its residents. They will also have staff who are trained in leading safe and enjoyable activities for everyone involved. Outdoor activities are especially important, as they provide residents with a chance to get fresh air and sunshine. They also give residents the opportunity to socialize with their fellow residents in a relaxed, outdoor setting. As was mentioned, activities and amenities tend to have an impact on the nursing home business profit. So in your pursuit of nursing home industry profits, it makes sense to think of the resident experience. 

So what actions can one take to get a five-star quality rating? There are three strategies that one can employ here; one related to identifying areas of weakness, another related to fulfilling basic requirements, and the final one related to higher-level analytics. 

Identify weaknesses to improve health inspection scores and stars

  • Understand and educate all staff on the state and federal nursing home health regulations.
  • Implement Quality Assurance and Performance Improvement (QAPI)  to identify, reduce, and improve areas of poor quality and safety performance.
  • Adapt the performance-improvement adjustments to the nursing home environment.
  • Before the next nursing home inspection, ensure all the changes are in place.

Formalities that improve staffing scores and stars

Happy residents posing for a photo in a 5 star nursing home.
A good nursing home puts its residents first, ensuring they provide top-quality care and services that meet the unique needs of each individual.
  • Complete the CMS Form 671, which is the application for Medicare and Medicaid certification. It is also essential to complete the staffing section accurately.
  • Follow the new federal regulations on nursing home staffing.
  • Strive to improve employee retention and recruitment.

Analytics that improve staffing scores and stars

  • Learn and collect the data elements (number of hospitalizations per 1,000 long-stay resident days, percent of residents who made improvements in function, etc.) required for each quality measure.
  • Review and improve MDS coding accuracy.
  • Review and improve all clinical care and systems related to quality and safety outcomes.

By performing all the above, one can maximize their chances of getting a high five-star quality rating.

How To Run a Nursing Home: The Challenges

As we conclude our discussion on how to run a nursing home, it is worth mentioning some challenges one will face in the process of running a nursing home: 

Though these challenges may put off some from opening and running a nursing home, it is important to remember that there are ways to overcome these obstacles. For instance, Experience Care offers value-based pricing to its customers in addition to free EHR training for all long term care nurses, enabling smoother transitions for newly-employed nurses.

And the LTC Heroes podcast speaks with front-line workers and long term care leaders such as Dr. Bill Thomas, in order to spread the word that nursing homes are safe and ready to provide quality care to seniors across America.

Want to learn more about trends in long term care? Read our blog and subscribe to the LTC Heroes podcast.

Elijah Oling Wanga