How to Make Profitability Work for Your Mission: A Six-Step Approach

Written by Nathan DeGodt and Kassi Ellison 

Profitability is often misunderstood in home and community-based care. For mission-driven organizations, focusing on financial success can feel counterintuitive. However, the reality is clear: without economic stability, growth stagnates, care quality suffers, and fulfilling your mission becomes unattainable. Profitability is not just about the bottom line; it’s the fuel for delivering exceptional care, retaining talent, and staying competitive.

This blog is divided into six key sections, each addressing a critical profitability aspect.

Nathan DeGodt, CEO of CHAP, frames the discussion perfectly:
“Profitability isn’t just a goal—it’s the foundation that allows agencies to care deeply, lead effectively, and innovate fearlessly.”

Part 1: What Drives Profitability in Home and Community-Based Care?

Profitability doesn’t happen by accident. It’s influenced by several factors, many of which are within your control.

1. Referral Quality and Volume

• Volume Isn’t Enough: A high number of referrals means little if they don’t convert into admissions or align with your operational strengths.
• Target the Right Mix: Focus on referrals that match your payer mix, operational capacity, and care model. A balanced case mix, including long-term service users, builds financial resilience.

2. Operational Efficiency

• Optimize Resources: Misaligned territories, inefficient processes, and wasteful spending can quickly erode margins.
• Control Costs: increases in referrals that don’t help your agency work efficiently can derail progress, quality, and morale.

3. Payer and Case Mix Diversification

• Balance Your Portfolio: Relying heavily on low-reimbursement payer sources or specific referral types leaves your organization vulnerable. Diversification reduces risk and strengthens sustainability.

Part 2: The Referral Myth—More Is Not Always Better

It’s tempting to think that more referrals automatically lead to profitability, but this is a dangerous oversimplification.

For example, agencies serving short-term clients without balancing them with longer-term service users can strain resources, lower staff satisfaction, and reduce margins. While everyone deserves care, admitting high volumes without considering case mix balance can undermine financial stability.

The key takeaway? Focus on intentional growth. Agencies must assess not just the volume but the quality of referrals and their alignment with long-term goals.

DeGodt frequently reminds agency leaders:
“Growth without strategy is chaos. It’s not about how many referrals you get—it’s about getting the right ones.”

Part 3: Investing in Growth the Right Way

Growth requires investment, but knowing where and how to invest is critical. Misaligned spending can lead to wasted resources and missed opportunities.

1. Start with a Market Analysis

• Use claims data and market research to identify underserved areas, competitive gaps, and high-potential opportunities.
• Understand what makes your competitors successful and position yourself strategically.
• Take it a step further, Discover Your Unique Market Position: Utilizing Data to Identify Differentiators.

2. Build the Right Team

• Scale Wisely: Optimize territories and right-size your workforce to ensure every account is covered effectively.
• Train for Success: Invest in formal training that empowers your team to handle the unique challenges of home and community-based care.
• Learn more about Scaling Your Sales Team: Building a Team that Broadens Your Impact.

3. Leverage Technology

• Use CRMs and analytics tools to track performance, identify high-value accounts, and streamline time management.
• Invest in systems that deliver actionable insights, not just data.
• Sometimes Your Intake Process Costs you Patients. Here’s How to Fix it.

4. Align Operational Capacity

• Growth without operational readiness is a recipe for disaster. Ensure your clinical and administrative teams can handle increased volume without compromising care quality.
• Misaligned Teams Cost You More Than Just Revenue – And How to Fix It.

Growth Isn’t Easy, But You’re Not Alone

Strategic growth requires expertise, insights, and the right tools. At CHAP Growth Solutions, we’ve helped agencies nationwide navigate the complexities of growth with confidence. Contact us today to learn how we can help you achieve your goals.

Part 4: The KPIs That Drive Profitability

KPIs are the pulse of your organization. To make informed financial decisions, leaders must focus on measurable metrics. These KPIs reveal where your agency is succeeding—and where it’s falling short.

• Referral Conversion Rate: Are referrals converted into admissions? If not, identify and fix pipeline bottlenecks.
• Median Length of Service: A mix of short- and long-term clients ensures revenue consistency.
• Payer and Case Mix: Balance your portfolio to reduce dependency on low-reimbursement payers.
• Cost Per Admission: Track every dollar spent on onboarding new patients/clients to identify inefficiencies.

Part 5: Data and Analytics—Your Competitive Advantage

In the past, growth relied heavily on instinct and trial and error. Today, data and analytics have transformed how agencies make decisions.

How Data Drives Success:

• Targeted Referrals: Use claims data to identify referral sources with high potential and focus your efforts on where they’ll yield the most significant ROI.
• Territory Optimization: Identify underperforming accounts and reassign resources to maximize impact.
• Time Management: Ensure your team spends time on high-value accounts instead of chasing unproductive leads.

But data alone isn’t enough; it must drive action. Leaders need systems to hold their teams accountable for using analytics to inform strategy and execution.

Part 6: Long-Term Profitability Starts with Alignment

Profitability isn’t just about hitting financial targets; it’s about building a system that aligns strategy, execution, and outcomes.

1. Diversify to Strengthen Resilience

Avoid over-reliance on any single referral type, payer source, or market segment. Diversification reduces risk and increases your agency’s ability to adapt to industry changes.

2. Create Strategic Alignment

Your sales, clinical, and operational teams must work together toward shared goals. Clear communication and alignment across departments are critical to achieving long-term success.

3. Stay Flexible

In an evolving healthcare landscape, adaptability is essential. A solid roadmap gives you direction, but agility allows you to navigate unexpected challenges.

4. Lean on Expertise

Nathan DeGodt reminds leaders:
“No one succeeds alone. The smartest leaders seek partnerships and expertise to help them see blind spots and achieve their goals faster.”

External support can be the key to turning challenges into opportunities, whether it’s optimizing territories, refining referral strategies, or improving operational readiness.

Build Your Roadmap with CHAP Growth Solutions

Profitability is a journey that requires strategy, execution, and relentless focus. At CHAP Growth Solutions, we specialize in helping agencies unlock their full potential through actionable insights and expert guidance.

Growth isn’t easy—but you don’t have to face it alone. Contact us today to start building your roadmap to sustained success. Together, we’ll ensure your agency thrives for years to come.