October 19, 2023

How to boost efficiency in your homecare agency: the 5 most common mistakes and how to fix them

Table of contents

With the average cost per care recipient reaching £5.5k per year*, utility costs rising almost 500%** for some providers, and the average payment for care failing to increase, it’s no wonder that margins have become so tight that a third of care providers are thinking of closing down**.

So for agencies who are feeling the pinch, what’s the solution? 

At Birdie, we work with over one thousand care agencies across the UK and in doing so, we’ve found one key area that’s dragging many high-potential businesses back: efficiency.

At any size and any level of maturity, we’ve found agencies who have great people, plenty of skills and high standards being repeatedly hampered by spending too much time on processes and activities that could be much, much easier. These are often activities that seem small - and therefore things that we can just ‘put up with’ - but cumulatively, can seriously harm your business and its margins. 

So that’s what this article sets out to help you with: boosting efficiency. 

In this blog post we’ll outline the most common efficiency pitfalls and then explore actionable steps for immediate improvements - and therefore the profitability - of your homecare agency. 

Efficiency Trap 1: Manual Processes

Manual operational and administrative tasks in the homecare sector often consume valuable time and resources, diverting attention from core caregiving responsibilities. 

  • Manual Rostering or Scheduling: Relying on manual methods for scheduling is both time-consuming and error-prone, taking up an average of 94 hours a month for scheduling and an additional 12 hours for last-minute changes*. This not only drains administrative resources but also limits the time care providers can dedicate to their primary role: caring for recipients, thereby affecting care quality and revenue.
  • Digital Social Care Record (DSCR): Lack of a unified digital system for social care records can lead to inefficiencies and increased risk of errors in care recipient information. Agencies spend approximately 7 hours per month creating and an extra 12 hours reviewing and updating care plans*. Such inefficiencies can compromise service delivery, negatively impact customer retention, and diminish referrals, affecting profitability.
  • Digitising Carer Workforce: In the absence of real-time communication and efficient task management tools like mobile apps, homecare agencies can face delays in response times and poor coordination among care providers. This hampers service quality and can result in customer dissatisfaction.

Key actions:

  • Implement rostering/scheduling solutions that maximise carer capacity and can help you speed up visit allocation with smart matching. You can also maximise carer hours by reducing travel time - did you know agencies reportedly spend £1.7k per care recipient/year on travel time alone!*
  • Fully digitise your social care records using an approved social care record system. With the implementation of structured data, fully compliant assessments and tasks you can save critical time in onboarding new care recipients and reduce the auditing time and reduce risks associated with poor and unstructured care plans.
  • Transition your workforce to the digital realm. A mobile-native care delivery system (carer app) can save your carer time, make them feel more confident in the care that they are delivering and reduce task and medication risks, by delivering and monitoring care on a digital platform you’ll be able to monitor the quality of care you deliver in real time and understand carers performance at a glance.

Efficiency Trap 2: People Management

With the carer shortage not going anywhere soon, one of the biggest efficiency traps is poor people management, which leads to turnover of team members or poor performance. With an average turnover rate for social care businesses in 2022 of 25%, this is an area where many agencies can make small changes in order to drive big retention wins. 

  • Training and Development: The lack of a robust training and development program can lead to decreased employee confidence, causing a decline in retention rates. This can also impact care efficiency, undermining care recipient satisfaction and therefore harming revenue.
  • Performance Evaluation: Inadequate real-time visibility, alerts, and performance analytics can hinder your agency's ability to address performance issues promptly. This lack of timely intervention could lead to poor service delivery, ultimately affecting the agency's operational efficiency.
  • Flexible Staffing: Failure to implement flexible staffing strategies can compromise service delivery, and inflexible work schedules can negatively impact team retention. 

Key actions:

  • Set expectations around key performance metrics such as % of medications administered correctly, on-time visits, number of visit notes and alert responsiveness metrics. Create performance dashboards/reports for carers and set out monthly/quarterly performance reviews where you take carers through the reports.
  • Create capacity “models” around carers chosen minimum and maximum hours of care, analyse this frequently and align your recruitment and visit allocation policies accordingly.

Efficiency Trap 3: Finance

Finance processes in the homecare sector can be complex, prone to errors and time consuming. Home care agencies who focus on these crucial financial aspects can achieve better performance and sustainability.

  • Billing: The absence of an efficient electronic billing system can significantly slow down the billing cycle. This not only affects cash flow but also increases the time and resources spent on chasing payments, thereby affecting profitability indirectly: homecare agencies spend an average of 8 hours per month on invoicing*.
  • Payment Tracking: Without automated billing and payment tracking, agencies risk revenue loss due to billing errors or overlooked services. Inefficiencies in payment tracking can destabilise the revenue flow, putting financial health at risk.

Key actions:

  • Use electronic billing software to speed up your invoicing processes, with a system that generates invoices automatically from visit logs, supporting uninterrupted cash flow. 
  • Introduce varied electronic payment methods, making payment as easy as possible. Opt for a platform that supports direct debits, allowing effortless payments. This also ensures you receive payments on time - platforms like Xero, Sage Pay or Stripe can be good solutions. This approach not only fosters positive care recipient relations but also reduces administrative tasks related to payment collections.

Efficiency Trap 4: Auditing

Conducting thorough audits and effectively using care recipient feedback is crucial for both compliance and service improvement in the homecare sector. However, the time-intensive nature of these activities can have a negative impact on profitability - unless you find a way to make them more efficient. 

  • Audits: While consistent audits are essential for avoiding costly fines and maintaining an agency's reputation, they can be a drain on resources. Homecare agencies spend an average of 14 hours a month on monitoring and reporting*, when it could be better spent on activities that help generate business results. 
  • Feedback: Gathering and utilising feedback is crucial for improving care recipient satisfaction and retention rates, components vital for maintaining and expanding an agency's care recipient base. However, the challenge is to automate and collate this feedback in a way that satisfies regulatory requirements while minimising admin time. 

Key actions:

Consider adopting a care management system that enables you to monitor the quality of care in real-time - this can save you up to 12-28 hours each month*. By implementing systematic auditing reviews, setting up alerts on key metrics and creating dashboards, you’ll be able to stay up to date with the health of your care agency. The key dashboards and reporting you should have in real time are:

  • Monthly Active Care Recipients - Understand the growth of your agency
  • Medication administration - Understand risks around missed medications
  • Visit Punctuality and fulfilment - Understand carer punctuality
  • Hours Delivered - Understand the growth of your agency based on hours of care
  • Revenue Summary - Understand your commercial performance
  • Profit and loss - Understand margins
  • National Living Wage Compliance - Pay compliance

Implement a feedback loop with your care recipients and their family members. Create ongoing feedback surveys that can help you measure satisfaction, while also monitoring patterns in feedback that can be tagged, for example against key issues or KLOEs that can be then actioned accordingly. We recommend keeping a record of ongoing NPS score and a list of actions taken based on feedback that can be used when you’re being audited.

Efficiency Trap 5: Communication

Effective communication and information sharing are critical to success - but get it wrong, and this can become a drain on time for everyone from managers to care recipients. 

  • Communication: The absence of integrated communication systems can lead to misunderstandings between team members, as well as with care recipients and their families, ultimately compromising the quality of care delivery.
  • Meetings: Ineffective team meetings can result in delayed problem resolution, causing a bottleneck in operations and negatively affecting care quality and efficiency.
  • Information Sharing: A lack of online portals for information sharing can increase the administrative burden on the team, distracting their focus, reducing efficiency and potentially impacting profitability.

Key actions:

Implement a unified communications platform ideally within your care management system that enables you to keep a compliant audit log of all your communications in one place. Here’s what to take in consideration when looking for a unified communication platform:

  • Enable real-time communication, so you can notify carers of plan or visit changes
  • Ensure communications are logged against care recipients for a full record 
  • Don’t use WhatsApp or any other type of communication platform designed for private individual communications - this is not compliant with data protection laws in the UK

Establish a communication rhythm:

  • Meetings should be short, focused sessions where carers and office staff discuss ongoing cases and immediate concerns. 
  • Consider a monthly review that’s more in-depth, involving case study reviews and planning for upcoming cases. 
  • Use QBRs to review performance metrics, set objectives, and strategic planning
  • Before each meeting, share agendas outlining key discussion points. This approach ensures structured, productive meetings that promote transparency and collaboration. 

Create transparency and visibility across the “care circle” - carers, office staff, healthcare and families - by leveraging digital solutions for sharing information in a secure and privacy-compliant manner. Consider the following points:

  • Adopt a “family app” - this should enable the care recipient and their loved ones to access basic information around the care you deliver, such as their care plans, next visits and incidents/accidents.

The operational landscape for homecare agencies is challenging, but also full of opportunity for increased efficiency and profitability. And there's even more to explore beyond the efficiency traps addressed in this article.

Always wanted to know if your agency is spending in the right places?

Birdie's FREE Homecare Agency Cost Benchmarking Tool will take your numbers and tell you:

  • If you're spending more, less or the same than the average on everything from per-hour pay to travel time
  • If your profit margins per hour of care are beating your competitors
  • Exactly where you need to make savings or efficiencies in order to improve the health of your business

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