The Healthcare Practice at Forvis Mazars recently released our Healthcare Market Point of View, which outlines the importance of achieving health for organizations and those they serve, as well as the following five core capabilities necessary to do so:
- Aligned Growth
- Financial Discipline
- Regulatory Excellence
- Strategic Agility
- Talent Optimization
The concepts in our Healthcare Market Point of View are relevant and applicable to organizations across the healthcare continuum, including those within the senior living industry. Developing and honing these core capabilities can support senior living service providers in their pursuit of strategic, financial, and operational excellence. Below, we explore effective strategies to help your organization achieve health, building upon the core capabilities with opportunities and challenges specific to senior living.
Develop, Implement, & Refresh Your Strategic Plan
A strategic plan is a road map for decision making, resource allocation, and long-term sustainability. It clearly defines an organization’s mission, vision, and desired future state. It also includes an analysis of the organization’s current state, which may consist of a market assessment, strengths, weaknesses, opportunities, and threats (SWOT) analysis, and financial analysis. Developing and maintaining a strategic plan will not only help an organization understand its current position but also provide leaders with a blueprint for success in the future.
Successful strategic planning requires a collaborative approach, striking a balance between operational, financial, regulatory, and social factors. Your strategic plan should include a clear framework of goals, tactics, key performance indicators (KPIs), and accountable leaders to support effective implementation and execution. As you develop your strategic plan, involve and seek input from stakeholders across the organization so they understand the relevance to their roles and day-to-day operations and feel empowered to act in alignment with the plan.
A successful strategic plan is agile. It does not sit on a shelf, but is a living, breathing document that can adapt to changing market conditions and evolving organizational priorities. To maintain strategic agility, consider a rolling five-year strategic plan that you revisit annually to refresh and extend. Working with trusted advisors who have deep strategic planning experience can help you develop, implement, and refresh a strategic plan to meet your organization’s needs of today and tomorrow.
Create & Maintain a Dynamic Financial Model
As more seniors enter the marketplace and operational costs continue to rise, providers need to focus on financial discipline. The importance of a dynamic financial model—a multiyear projection with the ability to adjust key assumptions and test strategic scenarios—is paramount.
A dynamic financial model allows an organization to quickly adjust to economic conditions and operational changes and project their impact on operating margin, cash position, and other KPIs. It can help an organization evaluate the impacts of proposed campus plans, more accurately project complex revenue envelopes, and highlight departmental cost savings opportunities. The model can also be adjusted based on the evolving policy environment, helping an organization pursue regulatory excellence through a well-informed, strategic approach to reimbursement.
A dynamic financial model—aligned with your rolling five-year strategic plan—can be a more agile alternative for the annual budgeting process. You should consider working with trusted advisors who have experience building complex financial models and can help you design and develop models to fit your circumstances and relevant variables.
Diversify Service Offerings
Consumer demands continue to shift as younger generations enter the market—both as young seniors and adult caregivers. In response, senior living organizations should consider diversifying service offerings to maintain market relevance and provide market-appropriate services. Strategic investment in new services, capabilities, and technologies is a key aspect of aligned growth, which helps organizations maintain healthy margins and meet the evolving needs of the communities they serve.
Senior living providers may consider renovations or brick-and-mortar expansions, such as wellness centers, dining spaces, outdoor entertainment and activity spaces, and satellite operations, or non-brick-and-mortar expansions, such as home health programs, outpatient rehabilitation services, adult day programs, telemedicine programs, meal delivery services, and catering.
Before launching a new service, you should consider the technological and operational capabilities necessary to do so, the potential financial impact as informed by your dynamic financial model, and alignment with your organization’s strategic plan. Deploying market surveys or conducting focus groups can also help you better understand the demands of your current and future residents and how you may provide an improved resident experience across the continuum of care.
Partner With Those Who Share Your Mission
Another aspect of aligned growth is pursuing partnerships with like-minded organizations. There are local, regional, and national organizations with shared missions of achieving health for the aging population. Tapping into formal and informal partnerships with these organizations can enhance community engagement, resident well-being, and staff job satisfaction.
More traditional partnerships may take the form of joint venture or affiliation agreements. These arrangements can lead to many benefits, including resource sharing, cost savings, group purchasing power, resident amenity sharing, and more. Other formal partnerships may be available with healthcare partners, like hospitals, primary care physicians, rehabilitation centers, and/or hospice providers. Such partnerships can help provide a continuum of care and peace of mind for residents and their families.
Not all partnerships require an exchange of funds—volunteer organizations may be able to serve your community in a big way. Local educational institutions can also be great partners, with student programs and educational requirements that may include shadowing or community service hours. Working with these organizations is an excellent way to grow the connection between your organization and the surrounding community.
Identifying partners that align with your culture, mission, and strategic plan is crucial. Consider launching a partnership exploration exercise to identify areas for formal and informal partnership opportunities, as well as evaluation criteria for potential partners.
Invest in Recruitment & Retention of Top Talent
The workforce has been a focal point of the senior living industry since 2020. Few segments of the industry have recovered to pre-pandemic staffing levels, and our Mindsets Executive Leadership Report indicates that staffing shortages and other workforce challenges rank among healthcare leaders’ top immediate concerns. The importance of succession planning at the executive level also remains in focus due to both generational transitions and the impacts of the COVID-19 pandemic.
Organizations can more effectively combat ongoing workforce challenges by focusing on talent optimization. This includes building exceptional teams through innovative recruitment and retention strategies. Consider tapping into external resources and professional organizations to help with recruitment. Examine wages and benefits to determine whether your organization is competitive in the market. Implement programs and policies that create a diverse culture in which every team member feels empowered and included as an important part of the community.
Talent optimization also means equipping staff to perform effectively and grow into future leaders. Consider investing in technology solutions that promote operational efficiencies, improve quality of care, and reduce staff burdens. Implement educational and training opportunities and develop programming that identifies high-potential employees and helps prepare them for leadership roles. Investment in your staff is an investment in your organization’s future.
Recruit, Educate, & Leverage Your Board
A well-informed and highly committed board is often what sets an organization apart from its neighbors. With effective training and education, your board can become—or remain—an invaluable asset by guiding your organization in the pursuit of strategic agility, financial discipline, and aligned growth.
Recruiting your board starts by sharing your community with those who are not part of it yet—through storytelling, outreach, partnership, and programming. These initiatives help tell the greater community about your organization and build brand recognition among those who may be interested in serving.
Training and education should start on day one during the onboarding process to set the pace for board members’ experience and involvement. Ongoing education, including attendance at in-person industry conferences, should continue throughout the board members’ tenure to keep them abreast of developing industry trends, best practices, and changing market conditions. Active board participation in strategic planning and community engagement also helps foster a sense of belonging and shared responsibility for the health of the organization and its residents.
Consider developing and deploying a standard operating procedure for the board life cycle, including recruiting, onboarding, training, continuing education, and succession planning.
How Forvis Mazars Can Help
In these strategies you may recognize both strengths and opportunities for improvement at your organization. Understanding how to build upon existing strategies and prioritize improvement opportunities is an important step toward achieving health for your organization in 2025 and beyond.
Our professionals at Forvis Mazars have decades of experience helping senior living organizations in their pursuit of strategic, financial, and operational excellence. If you have questions or need assistance with developing and implementing any of the above strategies at your organization, please reach out to our team today.