In this week’s episode of A Drink with The Hurricane, Steve discusses how having minimums can increase revenue and improve caregiver retention.
Do you have minimums for your private pay home care business? This is a very, very hot topic because everybody says, we don’t have minimums, we don’t have minimums and the bigger the agencies are, the more minimums they have. Think about it from a staffing standpoint or from a caregiver’s perspective.
Our industry average, if you hire three caregivers this year, by the end of the year you will have one left. Almost 70% of the people we hire quit before the end of a year. That’s abysmal. Why is it so bad? Because we’re catering too much to our client. I’ve had people state these exact words to me over the years when I’ve done field visits with clients and such saying, Steve, our company’s philosophy is like Burger King, “have it your way.”
Clients, when they call in and say, I want a bath visit two days a week, if they need a bath and they can’t take a shower by themselves, what else can they not do by themselves? That is really, really important so by giving somebody two days of care for two showers, you’re providing a disservice to that person because if they can’t take a shower, they probably can’t go to the bathroom, they probably can’t get to doctor’s appointments, probably aren’t taking their meds properly, probably not cooking meals and eating like they should, probably not doing physical therapy exercises. They need a lot more than just a shower.
From the caregiver’s perspective, a caregiver says, “I wanna work 40 hours a week for you.” Here’s a typical schedule. Let’s say you have a caregiver who comes in who’s available Monday, Tuesday, Wednesday, Thursday, and Friday. Let’s just say you do a four-hour minimum, AM, PM. You do a four-hour minimum and with that four-hour minimum, you will do just four hours but that’s it. You’ll do it once a week. You know what happens? I’m this caregiver. We’ll call this caregiver Jane. I’m Jane and I come into work for you and your company. This is why we can’t keep Jane because Jane comes in and wants 40 hours a week.
All of a sudden you get Tom who wants Monday and Friday in the morning. Then a week later you get Betty who wants Tuesday and Thursday afternoon. Then all of a sudden you get Nick who wants afternoons Monday, Wednesday, and Friday. Then you get Chris who needs help Tuesday and Thursday morning. This is a typical schedule for a caregiver. Do you see anything wrong with this? First off, it’s very hard to fill just one shift like this which means that now Jane is coming in but she can’t get dependent and reliable work, she can’t get dependent reliable income, so she’s gonna constantly be looking for more work. This is why we can’t keep caregivers.
On top of this, Jane, even if you were to keep this schedule and get her to this point, she’s got one, two, three, four, five different clients here. This is too many clients. They don’t wanna be driving to all these different people’s houses all throughout the course of the week. They’re not even gonna be sure what days of the week they have to go anywhere.
Then, let’s throw this caveat in here too ’cause this happens all the time. Say Betty gets sick and goes to the hospital and discontinues services. Now all of a sudden to go from having 36 hours of work in this week, Jane just lost eight hours which is 20% of her weekly income, 25%, so she went from 36 hours down to 28 hours for that week which is now part-time. You cannot find somebody who needs those exact hours. Herein lies the problem.
We’re trying to give our patients what they want and keep caregivers. Something’s gotta give and this is why we have the caregiver crisis. Think about it. We’re playing with her livelihood. That’s why they’re not loyal to staying with your company. We have to do a better job internally. Here’s how we do it.
Now, what do I recommend as your minimum? I really recommend that you go for 20 hours a week. I know it sounds crazy. Maybe not from the get-go when you first get started ’cause you gotta grow the business, but when your business is doing close to $1 million a year, you have 20 patients on your census or more that you could actually approve that you know what you’re doing. Who’s the expert here, the customer or the agency? You are the expert.
Think about it from this perspective folks. I had my bathroom leak a couple of years ago. My kids broke my bathtub and it was leaking through the ceiling and it came down into the kitchen and it was a mess. I was cooking dinner and water was dropping on my head and it was awful. When I went to get that fixed, I found there were some cracks in the tub so I called up a contractor who came out and said to me, here’s the crack. I said, can you fix the crack? That’s what I was thinking. The contractor said, no, we can’t fix the crack. If you wanna fix it, you can go to Home Depot, you can get porcelain crack stuff and you can take care of it yourself and do it yourself. I said, well why can’t you do that?
They said we’re not gonna do that because that’s not gonna fix it. It’s only gonna put a band-aid on it and it’s gonna eventually leak again. That’s not the way we do work. The right way to do it so that it doesn’t leak and you’re gonna repair your ceiling in your kitchen and the floor underneath and everything else, you have to repair all of this. The right way to do it is to rip out the tub and replace the entire tub. When I called in asking for them to come out and fix the tub, I was thinking this is gonna be $100, $200 thing. It ended up being over $2,000 to replace the tub, fix the ceiling, fix the floor underneath, and make it so that it doesn’t leak. Guess what, two years later it doesn’t leak in my house anymore so I fixed the problem. The same thing happens with our clients.
They’re calling in, I need a bath visit once or twice a week. Selling them that bath visit is a disservice. What is our purpose? Our purpose as an agency is to keep you home. Our purpose as an agency is to set up a plan, long-term that keeps your mother out of the hospital because if mom ends up in the hospital and comes home and then needs home care, you’re gonna need 84 hours a week, 168 hours a week which means now you’re gonna spend $1,200, $1,500, $3,000 or more a week to get the care you need to stay home versus having somebody come in four hours a day five days a week which is like $300, $400 a week. How do you wanna spend the money?
A little bit over the course of the rest of mom’s life and she has no pain and suffering, or do you wanna let something happen to mom and then have to spend a lot of money in a short period of time and then mom eventually dies anyway? That’s the mindset.
Here’s what happens if you do a 20-hour minimum. The same situation with Jane as a caregiver. I have AM, PM, Monday, Tuesday, Wednesday, Thursday, and Friday. With a five hour minimum, Jane can have Chris and Kelly. That’s two clients, five days a week. She’s not driving all over the territory. She has one in the morning, one in the evening, boom. If you have a client that’s 56 hours a week, you can have one client five days a week for that caregiver. That is retention. That’s what the caregiver wants. This is 40 hours of work. Do you follow me on this?
I know that a lot of you are watching this and you’re thinking, but we wanna do this, we wanna do that. There’s an old saying that goes, you have to be willing to walk away from the business. You ever hear companies say we’re not the company for you? That example I just gave you with the contractor, he wasn’t gonna fix that tub. He was gonna replace that tub. If he wanted me to fix it, I’m not the client for him. He is not the company for me. I can go find somebody else who will fix it, but you’re not gonna be happy and the floor is still gonna be damaged and the ceiling is still gonna rain and everything else. You gotta fix the problem.
If I bring this up and Jane quits, now I gotta restaff all of this with another caregiver. How happy is Tom gonna be with their decision to go with me? Probably gonna cancel services. I know you’re looking at this. This is in every one of your offices right now. You gotta make a difference, you gotta make a decision.
If you want help with this, if you wanna be able to get clients that you can have this kind of a situation, pick up the telephone, give us a call, and let us show you how you can do this and bring in these kinds of clients to make your operation easier to get it to $3 million and beyond so that you can have the home care business that you always wanted and truly BLOW AWAY THE COMPETITION.