Strategies for Success in Senior Living in 2018
Author: John Harned
The new year brings new opportunities and challenges to the senior living industry. With all the changes in process, it’s a good time to revisit your strategy and evaluate what decisions can make you successful in 2018.
Investment in Senior Living
The stock market is strong and seniors’ investments are doing well, which likely helps create the peace of mind necessary for them to consider moving to Life Plan Communities (CCRC). The housing market remains strong despite rising interest rates, so seniors are in a good position to sell their homes as they make moves as well. The latest studies confirm this, revealing the amount of investment in renovation, expansion and new communities has doubled just through the first month of the first quarter of 2018, compared to the entire first quarter of 2017. Not surprisingly, December 2017 recorded the highest monthly issuance of tax-exempt debt ever. All communities should evaluate where they stand in their markets with this wave of development. If your organization isn’t taking advantage of such development opportunities, other organizations will be coming for market share. One way to test the need to remodel is to calculate the average age of plant. Here’s a BKD Thoughtware® article on how to help you calculate this ratio and understand where your community stands.
Skilled Nursing Facilities – Contraction or Renewal?
Some recent articles are predicting the death of skilled nursing facilities (SNF), while others are hailing their rebirth. The issues affecting SNFs at times appear too innumerable to list, but it’s clear there are reimbursement, workforce and regulatory pressures on all providers. To chart a course for success, providers need to work in an environment conducive to collaboration with many organizations outside their current relationships. Organizations will need to leverage their financial and strategic advisors to make the most of their Medicare, Medicaid and managed care business. A real strategy must be implemented to find and train qualified employees as well as keep them engaged as part of continuing to serve residents well. Many trade associations have made member workforce a key focus area for 2018. The regulatory pressures may cause many free-standing SNFs to evaluate partnerships with other providers that have developed systems to focus daily on quality services.
Collaboration in Senior Living
Collaborative relationships are a requirement for senior living communities in 2018. Gone are the days of residents and patients showing up unprompted. In many cities, hospitals now control SNF admissions like never before. The onus is on the senior living provider to initiate these relationships and keep their services front of mind with the hospitals. These admissions will otherwise go to a different provider or even bypass SNFs and go straight to home health or outpatient therapy. SNF admissions on CCRC campuses can convert to future independent living, assisted living or memory care residents when the focus is on the patient experience, overall hospitality and quality outcomes. Depending on the size of the senior living campus, it may even make sense for the hospital to place a nurse practitioner or physician on site for part or all of the week. Providers seeing patients from the greater community outside the campus even offers the potential to generate leads for the campus. This type of collaboration tightens the relationship in a mutually beneficial way. Relationships with colleges and universities make for dynamic community environments bearing new and innovative ideas.
Diversification in Senior Living
As organizations pause to perform community assessments, many will find that new or additional affordable housing among the greatest needs. Most assessments will find plenty of independent living, assisted living, memory care and long-term care, but the same cannot be said in terms of such housing for seniors. This could be a diversification opportunity for not-for-profit and for-profit organizations and fill a growing need in their markets. There’s significant related potential in most markets, but for this business line to kick-start and continue to grow, it’s essential to understand the consumer, the market and their needs.
Contact John or your trusted BKD advisor for more information on how you can strategize for success in 2018.