Long-term care, anyone? - column

Healthcare Financial Management, Sept, 1989 by Richard L. Clarke

Long-term care, anyone?

Diversification, round two.

As healthcare financial managers face the new decade, they will be asked to participate in the design and financing of future programs and services for their organizations. As an important part of the healthcare management team, financial managers will assist in the positioning of their organizations for years to come.

However, they face this uncertain future with some trepidation. In the late 1970s and early 1980s, the experience of most healthcare organizations with diversification into new products and services was usually poor. Programs and services that were implemented to enhance market share or broaden the revenue base often produced the reverse. Too often, diversification efforts diluted management's efforts and attention from the main operation of the organization, sometimes with disastrous results.

But the status quo also can be a dangerous game plan. Many businesses that did not evolve with their markets faded from the scene or declined in value and significance.

The new decade will cause financial managers to participate in new choices. And to be prepared to make these choices, I believe financial managers must be informed about the key issues that will affect their organizations.

One area of particular importance--providing new services to the elderly--is featured in the cover story of this issue of HEALTHCARE FINANCIAL MANAGEMENT. Mary T. Knapp and Peter L. DeAngelis describe the importance of using strategic planning to develop a product line for the growing elderly market.

Healthcare financial managers must be aware of the implications of shifting demographics and the gerontological care continuum. Hospitals that focus only on a narrow definition of market will probably suffer the same decline as the Penn Central Railroad did when it defined itself as being in the railroad business, rather than the transportation business.

Even managers of organizations that do not currently provide a significant volume of services to the elderly will be affected by public policy decisions on elderly services. The market is simply too large to ignore.

Much is happening in the area of elderly services, especially long-term care. Several bills are before Congress and state legislatures concerning the financing and payment for long-term care. Joseph A. Kuchler, HFMA's director of Federal issues, offers an overview of legislative developments in the second feature story in this issue of the Journal.

Most experts on healthcare issues predict that significant changes will occur in the next five years. These changes will affect all healthcare providers.

Again, to contribute to the debate, I believe healthcare financial managers must be well informed.

HFMA is interested in the issues of the elderly and long-term care. This year, HFMA Chairman Sister Geraldine M. Hoyler, CSC, FHFMA, CPA, appointed a national committee on long-term care. The committee, which is part of the National HFMA Matrix of councils and committees, comprises members with an interest in long-term care.

The purpose of the committee is to review previous and current efforts addressing the needs of HFMA members (current and potential) with a special interest in long-term care and to make recommendations to meet the needs of this constituency. The committee will also recommend educational and informational services and public policy advocacy positions for the Association.

The Journal periodically runs articles on the topic of long-term care, and Long-Term Care Notes is a regular feature in the Updata section. HFMA's recorded telephone message, Washline, often contains current information on legislative and regulatory activity in this area.

National and chapter educational and informational programs offer an array of learning opportunities for members with an interest in long-term care issues.

Finally, HFMA is expanding its data services for the nursing home industry. Patterned after the successful Financial Analysis Service, this database provides comparative national financial information on nursing homes. The service currently is operating in one state and will be implemented in another later this year.

Diversification, round two, is coming. And for most providers, it will include services for the elderly. Are you ready to participate in an informed way?

HFMA, you need to know.