Home Care – Are you charging enough to make a profit?

What you can control:

  • Care Management charge
  • Package Management charge
  • Goods & Services charge

You need to ensure that you cover your costs and include a profit margin if you want to stay in business.

Think of it like this, how much does it cost you to have a one employee on staff?

Care Management would include:

  • Annual salary package (includes salary & super)
  • On-costs such as payroll tax (don’t include if you’re a NFP) & workcover premium etc. 
  • Equipment required such as phone, lap top, office space, staff amenities
  • Fuel reimbursements or car costs (if you provide cars).  You might base this on an average monthly amount
  • Profit Margin

You need to work out the average case load per Care Manager taking into account the consumers’ package levels as they will usually have to spend more time with a consumer on a higher level package.  That’s not just face to face meetings, it should also include phone calls and follow up time eg. Applying for supplements etc.

Package Management, similar:

This is based on the cost of managing the package which may include the following:

  • Rostering staff salaries (go through the same exercise per job role)
  • Finance staff salaries as they usually prepare the monthly consumer statements and manage any unspent funds (this will phase out eventually).
  • Compliance and Quality Assurance activities (how much of an employees time does that take up?)
  • Cost of printing & posting paperwork to consumers etc.
  • Profit Margin

Services provided by your care staff may include the following:

  • Care staff (same exercise as mentioned)
  • On-costs as mentioned 
  • Allowances
  • Fuel reimbursements or car costs (if you provide cars) as mentioned above 
  • Profit Margin

External Suppliers/Goods including brokerage services includes:

  • Cost of the service/product provided
  • Margin to cover all other costs such as overheads and Profit.

Bottom line is, you need to cover all your costs using the consumer’s package as that’s the only funding you receive.

You also need to make sure you can justify your charges to the consumer for transparency purposes ensuring they understand what they are being charged for.  This will reduce the number of complaints down the track and lead to better relationships with your consumers, No-one likes these type of surprises.

If you’re interested in having a chat about anything home care, please contact Debra Ward by email debra@carecollaborator.com.au or phone 0438 020 728.

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