The Access Group has developed an online tool to help home care providers calculate their margins per hour.
The business software provider hopes the homecare margins calculator will assist providers in identifying tweaks that can be made to their business in order to deliver improvements to overall margins and care quality.
“Given all the shifting numbers and moving parts that make up every day of a homecare service, tracking your bottom line on a unit-by-unit basis is not possible for most providers. Not to mention trying to find the time to do this kind of analysis,” said Steve Sawyer, managing director for the health and social care division at The Access Group.
“But these kinds of micro-measurements can reveal so much about the productivity and sustainability of your business and help identify those seemingly minor tweaks that you can make that deliver big improvements to overall margins and care quality.”
The calculator asks the provider to type in their region (only regions in England at this stage) and their estimated pay and charge to the local authority per hour of contact time.
The online tool then does the rest, factoring in pension, holiday pay and employers national insurance to determine an estimated margin per hour of care before operating costs.
The Access Group has taken the regional average travel time and travel distance pay figures per hour from its Hidden Dynamics of Homecare 2019 report, the largest study of its kind that utilises real world data to produce insights into how levels of state funding influence quality, pay and recruitment.
If the provider knows how much their other overheads cost, such as rents, care coordinator/back office staff, stationary and other consumables, then they can divide these down to an hourly figure and subtract that cost from the figure given by the calculator.
And if that’s too difficult to come by, United Kingdom Homecare Association (UKHCA) has estimated that the hourly business costs – including office staff, premises and utilities, and other overheads – at £4.41 per hour of care.
The Hidden Dynamics of Homecare report has uncovered that many care providers are making “paper-thin margins”, if not losses, on each hour of state funded care contact time.
It found that, with hourly business costs included, the average margin per home care contact was a loss of £1.68.
Armed with this knowledge, The Access Group has suggested ways providers can get their margins on the right side of the line, from the red into the black.
“Key costs for providers using paper-based systems – from care plans to audit tools – include back office staffing, poor visit and travel scheduling and put simply; low productivity, too much time spent on non-value-added tasks that could be automated or optimised with readily available software,” said Sawyer.
“Take for example, The Bay Care Group, a mid-sized and ambitious care provider in Devon. They’ve shown a clear commitment to going above and beyond for their clients and have earned an ‘Outstanding’ rating from the Care Quality Commission.
“But before they were awarded with their new rating they first improved the inner workings of their agency.
“They looked at how much time and money was being spent through the use of paper and old-fashioned systems, how this impacted not only mangers but also their care workers and therein their clients, who sometimes lacked information and would of course prefer that their friendly care worker spent more time talking with them and less time writing down notes.
“In the end, Bay Care clawed back over £100,000 from their back-office costs, a large sum, but one that is accumulated hour by hour, as each micro saving adds up.”