What to do about Budge Cuts

Welcome to the brave new world of budget cutting, as brought to you by the North Carolina General Assembly, Medicaid, and the Governor’s office.

The world of in home personal care services is always changing and becoming more challenging with slow or no rate increases, costs challenges, and regulatory challenges. We can expect finances to get tighter as the federal minimum wage goes to $7.25 per hour in July 2009. Governmental payers are looking for ways to pass along the consequences of their budgetary shortfalls to the provider community. This year, it may not be sufficient for our industry to point out that spending money on in-home care saves a lot of money in the long run by keeping the elderly and disabled out of nursing homes. The sense in some quarters in the North Carolina Legislature is that the Personal Care program is “over utilized” – that is, that there are too many undeserving persons receiving benefits, as well as many persons receiving too many hours. This year, the axe is out and sharpened. Indeed, the Governor’s proposed budget as submitted to the North Carolina General Assembly would a) wipe out all planned inflationary or other rate increases, b) change Private Duty Nursing to reduce cost and 3) reduce the cost of the Medicaid PCS program about 15% by “modifying” Personal Care Services benefits to reduce “overutilization” of benefits.

Are you ready for a 15% reduction in revenue? You as a licensed North Carolina Home Care provider must be prepared to adapt quickly to maintain survival and prosperity. Somehow, you are going to have to save money, and do more with less. If you want to grow, or even stay the same size, you cannot afford to utilize your office staff and RN’s in the same way. To put it bluntly, we think that successful, surviving agencies will have to adapt and get more done with the same or lower head count.

How? The answer is technology and efficiency. You may have read that President Obama’s stimulus package provides incentives for the health care industry to improve efficiency through health information technology. In some cases, these incentives can ease the transition to a more efficient system powered by computers and software. We think we can help you to move forward with technology improvements. If you have been considering upgrading your software and lowering your overhead, give us a call.