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How ‘The Matrix’ can increase your profits

I once asked a Customer Relationship Manager based in a Care Home what the fees for the rooms were.

He looked at me a bit panicked and then admitted that there wasn’t any structure, he charged what he thought they could afford…

Now you may think this is an extreme example but it is not as unrealistic as you may think.

For example, does your home have a set menu of fees, particular to EACH ROOM?

If not then you need to read on.

Achieving the best fee rates

A business will have a variety of assets. In the case of care homes, this is your building, and more importantly, your rooms.

I recently booked a room at The Ritz for a very special occasion. When I went onto the booking form there was a variety of options from Superior Queen, to Superior King, Executive and Deluxe King, and a variety of expensive suites. You paid for what room you wanted. The more you paid, the better the room.

And when booking holiday rooms we are used to paying extra for a ‘sea-view’, or a room around the pool, or one of the upgrades available

Even companies like Travelodge, where rooms are all similar, have a way of getting more of your hard-earned cash by offering early check-ins, late check-outs, and enhanced WiFi.

As I work with Care Homes I am continually amazed that there appears to be little enthusiasm for this approach. I have often found the lowest paying resident in the largest rooms, with the nicest views. And at the same time the home is looking tired, or is unable to invest in new equipment, as understandably, the profit is just not there.

We cannot have it both ways, but I recognise that to upgrade rooms there needs to be the cash to do so. And herein lies the conundrum. You cannot afford to upgrade rooms, but need the extra income and upgraded room could provide. It is a vicious cycle.

To help tackle this I developed a quick and easy room-rating tool. This tool looks at a variety of different options that can be used to evaluate and rate each of your rooms. It can be downloaded from my website.

Rating your rooms in this way means that you can set your fee rates according to the chosen room.

Upgrades could include such things as:

• Garden View
• Patio Doors
• Room Size
• Full Ensuite
• Position
• Upgraded furniture
• Smart speaker/Large TV/Telephone

Of course this is not an extensive list and not all will apply to your home but will give an indication of what could be considered when rating your rooms.

In the Room Rating Tool that accompanies this article, rooms are placed into one of 3 category’s, Standard, Plus and Platinum.

Once all rooms have been rated into one of the 3 category’s then you need to set your fee rates.

Personally I have used Low, Medium and High Dependency but this would be up to you. Using the Low, Medium and High method, and the Standard, Plus and Platinum Room rating, you would be left with a possible 9 room rates.

Private Fees Rates

In the case of private funders the matter is straight forward. You set the fee rates per room and the prospective client chooses their room according to their budget.

Top Up fees

Top-Up fees are a completely different, and lengthy, subject. I will try to explain the basics here but would always recommend you talk to your local commissioners as views around the country can vary.

Local Authority Rates

I have previously established what I would call LA rate rooms. These would unfortunately be the lowest graded rooms, as the LA will be paying the lowest fee. You can then charge a top-up if the client wants to upgrade their room to one with a nicer view, or a larger room with patio doors etc. There are a couple of rules to this:

1. The resident cannot normally pay their own top up fees. (if they could it is unlikely they would qualify for LA funding). So top ups are generally paid for by a relative, friend or sometimes, a charity. There are some exceptions but the best advice would be to check with your Local Authority.
2. They can only be paid for genuine upgrade. They cannot cover cost of care
3. The Care Home must contract with the LA for the Full Price, including Top-Up

I would always seek advice and guidance from your Local Authority before charging Top-Ups. I have known these to come back to bite!

CCG funded residents

Top-Ups can be charged but NOT for ‘Needs’. For example, if a resident ‘needed’ a bigger room, for example extra equipment, then this should be reflected in the contract price and a Top-Up cannot be charged.

Top-Ups could be charged for ‘wants’. If a resident ‘wanted’ a nicer room with a garden view then this can be charged.

Again I would recommend you check your contract and talk to your local commissioners.

CHC

You cannot charge a Top-Up for CHC funded beds.

By creating your matrix of fees you are maximising your chances for higher fees. A clear, understandable system of setting and achieving fee rates will mean that staff more confident when quoting fees.

Martyn Dawes is a Social Care Coach and Consultant. He is the author of The Overwhelmed Manager, a book written specifically for Social Care Managers who are struggling in today’s challenging, and ever-changing, environment.

The Room Rating Tool can be downloaded from here

More information on The Overwhelmed Manager can be found here