Investments in Operations Hold Promise for Seniors Housing and Care
The 2017 NIC Fall Conference featured valuable programming content for stakeholders in the seniors housing and care industry. Throughout the conference, key themes emerged both on and off the stage. A frequent topic of discussion was the evolution of the skilled nursing industry, and more notably, the importance of efficient operations for success. Not only do operators require efficiency, but they also must be nimble and empowered to adapt to their unique markets while using data to influence decision-making and partnerships.
Speaking on a panel entitled, “Making the Case for Investments in Operations and Maximizing Your Return,” Mercedes Kerr of Welltower and Thomas Wellner of Revera described an investment that improved operations. Welltower provided capital and support to Revera to replace lightbulbs in the operator’s buildings, upgrading to LED bulbs. The investment not only served to add value to the buildings through high-value technology, it also provided return on investment by limiting the need for staff to constantly replace lightbulbs. Kerr said she expects the investment to see returns within two years on this project of between $50,000 and $80,000 per building. This LED upgrade project is a prime example of investments and innovations that serve to improve efficiency in operations.
Another example of technology investments that improve efficiency in operations came from Naveed Hakim of Plum Healthcare Group, a skilled nursing operator. Hakim described an innovative diagnostics tool that helps his clinicians make informed decisions about patients while limiting the amount of time spent on administrative work. As with the Revera example, Hakim measures the return on investment in staff hours saved, in this case from arduous administrative work. Patients, too, benefit from this investment, as clinicians can spend more time at the bedside and less time behind a computer.
Michael Schonbrun of Balfour Senior Living said, “Operations are key. You can have a beautiful building, well equipped… but if you don’t have the operating talent… that building isn’t going to prosper.” He recommended that training be a key component of the operating budget to drive quality in service delivery. He added that however strong the corporate headquarters, the seniors housing and care industry is a decentralized business and the judgement of leaders within the buildings is critical. KeyBank’s Brian Heagler also noted the importance of training and culture, saying these are factors lenders now take into consideration.
As the skilled nursing and seniors housing industries continue to evolve and prepare for the growing demand, , good operations are clearly vital to the performance of these properties. Finding ways to deliver efficient quality care, while being able to adapt to local market needs, will be critical for operators. Investors are also considering these aspects of operations more closely and may be poised to partner with operators to provide support to ramp up efficiency and adaptability, resulting in positive returns and positive outcomes for residents.
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