Senior Living Visionaries is a podcast and radio show curated specifically for leaders in the senior living industry. On June 13, Plante Moran Living Forward’s Dana Wollschlager sat down with Jennifer Drago of Peak to Profit to discuss senior living trends, the future of the industry, strategies for senior living operators, and more.
Key takeaways
Implementing a strategic plan
Senior living operators who embrace a new vision and strategy are seeing the highest levels of success.
If your strategic plan has not been updated in the past five years, it’s time to re-evaluate. The senior living industry is changing rapidly. Aligning your strategic plan with your operations can help bring your vision to life. While you may have a great vision, failing to develop the tactics and outcome measures that align with that vision can lead to negative results that may cause harm to the longevity of your organization.
Warning signs for senior living operators
Lack of leadership at the executive and board levels promotes a culture of zero accountability.
With the pandemic, senior living operators did not focus on strategy as their top priority. Senior living providers are struggling to understand and prioritize their operational challenges, which are resulting in significant financial stress, bankruptcy, or closure.
The Bank of America Research Center noted in 2023, there have been $3.3 billion in first time defaults. Senior living companies were the cause of $600 million in first time payment defaults, representing 46% of the total. Senior living company defaults could reach as high as $2.1 billion by the end of the year.
Reinvesting in assets
About 60% of senior living assets currently in the market are over 20 years old. The elevated cost of capital and margin compression are making capital expenditures (CapEx) more difficult for senior care providers. Some communities are completely neglecting Capex; however, CapEx planning is vital to providers who wish to stay relevant in the future.
A new approach to affordable care
With the 75-and-up population increasing by over 93%, many are ill-prepared for retirement and do not have the funds for proper housing and care. Reimagining how your community can provide for the middle-to-low-income population is critical in the success of affordable senior care.
Since 2008, more than 46,000 skilled nursing beds have been lost. The skilled nursing unit was once a safety net for those who couldn’t afford senior care. The loss of beds reflects the growth of not only private-pay senior living but also home- and community-based services. The skilled nursing sector is in the midst of an upheaval and providers must think strategically to serve these members of the population.
Senior living operators should consider an owner’s representative
Regular reinvestment into the buildings and sites of your campus is a major factor in longevity. Senior living owners and operators are often too busy to coordinate and navigate development challenges. To better navigate the intricacies of real estate development, consider an owner’s representative. Owner’s representatives supplement an organization or public entity’s internal team to help their staff manage the intricate details of significant capital programs. As experts who manage projects regularly, owner’s reps are in tune with the challenges being faced in the industry today.
Our senior living and care experts have led dozens of communities through strategic planning and master planning that has allowed them to transform their organization and adapt for the future. If you’d like to discuss your organization’s future, please reach out.
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