Financial performance among adult day centers: results of a national demonstration program

J Am Geriatr Soc. 1997 Feb;45(2):146-53. doi: 10.1111/j.1532-5415.1997.tb04499.x.

Abstract

Objectives: This paper describes the financial performance (defined as percent of total expenses covered by net operating revenue) of 16 adult day centers participating in a national demonstration program on day services for people with dementia, including examination of possible predictors of financial performance.

Methods: Participating sites submitted quarterly financial and utilization reports to the National Program Office. Descriptive statistics summarize the factors believed to influence financial performance.

Results: Sites averaged meeting 35% of expenses from self-pay and 29% from government (mainly Medicaid) revenue, totaling 64% of all (cash plus in-kind) expenses met by operating revenue. Examination of center characteristics suggests that factors related to meeting consumer needs, such as being open a full day (i.e., 7:30 am to 6:00 pm) rather than shorter hours, and providing transportation, may be related to improved utilization and, thus, improved financial performance. Higher fees were not related to lower enrollment, census, or revenue.

Conclusions: Adult day centers are able to achieve financial viability through a combination of operating (i.e., fee-for-service) and non-operating revenue. Operating revenue is enhanced by placing emphasis on consumer responsiveness, such as being open a full day. Because higher fees were not related to lower utilization, centers should set fees to reflect actual costs. The figure of 64% of expenses met by operating revenue is conservative inasmuch as sites included in-kind revenue as expenses in their budgeting calculations, and percent of cash expenses met by operating revenue would be higher (approximately 75% for this group of centers).

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Aged
  • Community Health Centers / economics*
  • Community Health Centers / organization & administration
  • Community Health Centers / statistics & numerical data
  • Costs and Cost Analysis
  • Day Care, Medical / economics*
  • Day Care, Medical / organization & administration
  • Day Care, Medical / statistics & numerical data
  • Dementia / therapy
  • Fees and Charges
  • Financial Management / statistics & numerical data*
  • Humans
  • Income
  • Medicaid
  • Respite Care / organization & administration
  • Time Factors
  • Transportation
  • United States