After economic storm, new long-term care business strategies
[Editor's Notes: The following story, “2010 State of Senior Living And Senior Living Capital Markets,” is reprinted with permission from Ziegler. It appeared in the financial services firm's Oct. 1 e-newsletter. The conference, as mentioned in the article, took place in late September and early October.]
The Ziegler Senior Living Finance + Strategy SLF+S) conference at the Coconut Point Hyatt Regency Resort & Spa in Bonita Springs, FL, this week provided a literal and figurative calm after the storm. The literal storm (Tropical Storm Nicole) passed quickly through South Florida just before the conference began, leaving blue skies in its wake for conference attendees to enjoy; the figurative economic “storm” of 2008 and 2009 has left a few remnants of “foul weather” in its midst, though senior living providers seem to be riding several positive trends in its wake.
These trends—11, in fact—were the highlight of this year's traditional opening session of the SLF+S Conference (Thursday, Sept. 30). Presented by Kathryn Brod, Ziegler's senior vice president and director of senior living research; Dan Hermann, Ziegler's senior managing director, head of senior living finance; Mike McDaniel, Ziegler's senior managing director, head of sales and trading; Ron Mintz, principal, Vanguard; and Jim LeBuhn, director, Fitch Ratings, these 11 trends were woven into each of the subsequent educational sessions of the conference and were enumerated by this team of speakers as follows:
1. Embracing the New Reality
The “new reality” of the post-economic storm is causing senior living organizations to re-think, re-commit and re-task their governing boards and is evidenced by better recruitment, comprehensive orientation, extensive education and high levels of engagement.
2. Focusing on Operational Excellence
Senior living organizations are demonstrating operational excellence through a focus on staff with keen attention to continuous quality improvement and a zealous commitment to operational excellence. Though some organizations have been seriously challenged, evidence was provided that strong single-site and system providers that are zealous in their commitment to the bottom line and quality enhancement are enjoying success in today's environment.
3. Adopting Resident-Centered Service and Care Models
The models of resident-centered care are proliferating, whether in stand-alone Green House® and small house settings or incorporated in culture change new community or repositioning initiatives.
4. Rolling out “Wellness” in all Dimensions
Whether in nursing, assisted living or independent living, providers are increasing their implementation of programs/services that have measurable wellness goals.
5. Reaching Beyond the Walls
More and more senior living organizations are moving beyond their existing walls to provide services to a broader constituency through a variety of programs: home- and community-based services, PACE, Life Care without Walls (or continuing care at home) and Neighborhood Villages, to name a few.
6. Considering the Impact of Healthcare/Regulatory Change
Staying abreast of the current thinking/knowledge in order to position an organization strategically in light of the knowns and unknowns of current healthcare and regulatory reform is a “must” in today's environment, and is increasingly the norm among pro-active providers.
7. Repositioning Campuses
The ongoing need for repositioning was evidenced by survey results of those attending the conference: well over 2/3 had either repositioned their campuses physically or through culture change initiatives in the past five years, and a like percentage was planning to do the same in the next five years.
8. Expanding Through New Communities
Despite the economic downturn, new communities (nursing, assisted living and CCRCs) continue to augment the portfolios of not-for-profit senior living providers.
9. Seeing System Growth
Systems are growing through expansion, new community growth, and affiliations … with an increasing number pruning properties that no longer fit their market or financial portfolios.
10. Adapting to the Realities of the Evolving Capital Markets
A number of senior living providers ARE back in the capital markets with attractive baseline long- and short-term interest rates and a variety of financing tools providing a more favorable climate in which to access capital. Credit concerns have been gradually easing, though the defaults that have occurred continue to impact the expectations and requirements of both bond investors and bank lenders. Organizations with rated debt are benefiting from a favorable credit spread.
11. Determining Whether You Have What it Takes
Despite the encouraging nature of the previous ten trends, some organizations have struggled to emerge from the economic storm and are “raising their hands” to seek affiliations that will enable them to not only continue but also to more completely fulfill their missions in the future.
The speakers provided far more detail behind these trends, including evidence to support their views, in this information packed 100-minute session. Copies of the session are available by contacting Heather Vogel at HVogel@ziegler.com.
Jeffrey Girardi is research specialist and Dan Hermann is senior managing director at Ziegler, a financial services firm.