Successful Strategic Planning Board Retreats Board Retreats.pdf · Source: U.S. Census Bureau...
Transcript of Successful Strategic Planning Board Retreats Board Retreats.pdf · Source: U.S. Census Bureau...
9/24/2018
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Successful Strategic Planning Board RetreatsPresented by: Tim Cain, David Lewis, Sarkis Garabedian
September 27, 2018
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What We’ll Cover
• Hot topics in senior living. Demographics, competitive landscape, consolidation, post acute care
• The five indicators that reveal when your industry is about to be transformed
• How LCS has helped communities we work with respond to and prepare for rapid change
• Capital Manor Case Study
Hot Topics in Senior Living
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Upcoming Demand!
Source: U.S. Census Bureau National Population Projections based on 2010 Data. 2016 Base Population; Projections updated in 2017 (released March 13, 2018)
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2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100+
Popu
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Age
2016 U.S. Population
Millennials Generation X
Baby Boomers
Silent Generation
WWIIGeneration
Generation Z
Average CCRC move‐inAge approximately 78‐80;
Oldest Boomer 72U.S. Population
Oregon Demographics
• 76% growth rate 2015 to 2040 projected for 65+
• 141% growth rate 2015 to 2040 projected for 85+
• Senior population expected to grow much more rapidly than 30% growth rate for the state as a whole.
Source: State of Oregon Office of Economic Analysis, March 2013.
Knowing Your Consumers
• The consumer, regardless of setting, is changing– Looking for choice, options – Increased connectivity– Value walkability, access to community at large– Want greater input, demand for transparency– Comfortable with change?
• People are living longer and may or may not have same resources as previous generations
– Middle market conversation– Contract and unit choices
• Desire for lifelong learning, intellectual stimulation
• Demand for fitness and wellness programs
• Increasingly savvy with technology
• We are serving multiple generations with different needs and preferences
Source: Ziegler Investment Banking
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Growth Among NFPs Defined
Source: Ziegler Investment Banking
NFP SL Growth
Expansions/
Repositionings
New Community Locations
Sponsorship TransitionsHCBS Offerings
Affiliations, JVs &
Collaborations
For-profits Are Growing Fastest and Building Majority of the New Communities
• For-Profit growth continues to outpace NFP growth:
– Significantly more new locations
– Largely rental IL and AL/MC prototypes
– Some FP developers shifting to higher-end “Micro CCRCs” without SNFs
– Differentiation between FPs and NFPs diminishing in some markets
– Bifurcating the SNF market with luxury short-stay rehab locations
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Seniors Housing Construction by Profit Status; MAP314Q05 – 1Q18
Not-For-Profit
For-Profit
Portland CCRC Occupancy: 93.6%
• For-profit providers are more likely than non-profits to invest in new moderate income CCRCs
• However, even if product is different, age- and income-qualified market is being saturated as for-profits grow
• Don’t be deceived into thinking all for-profits provide poor quality care and are therefore not a threat to you
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For-Profit Not-For-Profit
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Seniors Housing Construction by Profit Status; MAP31As of 1Q18
New Properties Expansions
Source: NIC MAP® Data & Analysis Service, as of 3/31/18 © National Investment Center for the Seniors Housing & Care Industry | www.NICMAP.org
Age of Oregon Continuing Care Retirement Communities
Source: Ziegler Investment Banking
Approximately 90% of Oregon CCRC's > 25 Years Old
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New For-profit Competition – Portland
• Touchmark in the West Hills opening in 2018
• Located three miles west of downtown
• New “hybrid” rental/entrance fee community
– 126 ILUs
– 70 ALUs
– 68 MC
– 18 cottages planned for second phase
Source: Willamette View Official Statement, 2017 and Touchmark website.
New For-profit Competition – Lake Oswego
Source: Mary’s Woods Official Statement, 2018.
• The Springs at Lake Oswego located off of Boones Ferry and Kruse way in Lake Grove
• Predominantly rental, but may include some entrance fee plans
– 105 ILUs– 87 ALUs– 24 MC
• Expected to open in late 2019
• Located approximately 5 miles from Mary’s Woods
New For-profit Competition – Seattle
Source: Senior Housing News, March 6, 2018.
• New $115 million high-end rental CCRC announced in the First Hill neighborhood of Seattle
– 194 ILUs
– 21 ALUs
– 28 MC
• 24-story property expected to be completed in 2019
• Located near existing NFP CCRCs in First Hill, Skyline and Horizon House, and three major area hospitals
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NFP Expansion Trends - West
• 40 Ziegler senior living expansion financings totaling over $1.8 billion involved the following elements:
Where incremental margin is generated
Source: Ziegler Investment Banking
NFP Sponsorship Transitions – Cumulative Data
Note: Includes market-rate communities; excludes government subsidizedSource: Ziegler Investment Banking 8/30/2018
29 41 6397
149204
264320
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2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
Cumulative Totals (2010-YTD 2018) by # of Transactions & # of Communities
Transactions Market-Rate Communities
Drivers for NFP Senior Living Consolidation
Source: Ziegler Investment Banking2010
Influ
ence
Complexities of Healthcare
Leadership Turnover
Technology Demands
Diversify Service Lines
Hospital Consolidation
Ability to Attract Talent
Financial Pressure
Access to Capital
Competition
Ability to Attract & Retain Talent
Financial Pressure
Diversify Service Lines
Hospital Consolidation
Access to Capital
Reinvestment Requirements
Growth Capital
Leadership Turnover
Technology Demands
Competition
Board Strength
TODAY
Complexities of Healthcare
RECENT ADDITION
INCREASED PRESSURE
INCREASED PRESSURE
INCREASED PRESSURE
INCREASED PRESSURE
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Skilled Nursing TodaySupply of SNFs/Age of Plant
Occupancy/Length of Stay
Reimbursement
Staffing Shortage
Tech Needs/Cost
Home Care and Assisted Living Competition
ACA/Networks/ACOs
Aging Population
Increasing Lifespans
DRIVERS
DISRUPTORS
Source: Ziegler Investment Banking
Skilled Nursing Today
DRIVERS
DISRUPTORS
Source: Ziegler Investment Banking
Long-term SN
Resident
Long-term SN
Resident
Post-acute/Short
Stay
Post-acute/Short
Stay
Skilled Nursing Overall
Skilled Nursing Overall
• Changing preferences among consumers to stay in AL or IL with services
• Future of private pay?
• “Skip the SNF” trend• Decreasing LOS• Referral networks narrowing• FP up-scale development
Proactive Single-Sites
• Investing in current physical plant
• Ensuring strong occupancy through a firm commitment to marketing and sales
• Seeking operational efficiencies to combat rising costs
• Fully understanding the supply and demand characteristics of the local market
• Committing to solid and profitable operations, while at the same time planning for future growth
• Making sure that brand, identity, mission and values are clear and known to all stakeholders (internal and external)
• Exploring partnerships and joint ventures, where it makes sense to do so
Source: Ziegler Investment Banking
What are proactive single-site LPCs doing?
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ABOUT ZIEGLER
• Ziegler is a privately-held investment bank, capital markets, wealth management and proprietary investments firm
• A registered broker dealer with SIPC & FINRA
• Ziegler provides its clients with capital raising, strategic advisory services, equity & fixed-income trading, wealth management and research
• Founded in 1902, Ziegler specializes in the healthcare, senior living, educational and religious sectors as well as general municipal finance
DISCLAIMERS
*Investment banking services offered through B.C. Ziegler and Company. FHA mortgage banking services are provided through Ziegler Financing Corporation which is not aregistered broker/dealer. Ziegler Financing Corporation and B.C. Ziegler and Company are affiliated and referral fees may be paid by either entity for services provided.
This presentation was prepared based upon information provided to Ziegler Investment Banking (ZIB) and contains certain financial information, including audited andunaudited information, certain statistical information and explanations of such information in narrative form (the “Information”). ZIB believes this information to be correct as ofthe date or dates contained herein. However, the financial affairs change constantly, and such changes may be material. Today’s discussion may contain forward-lookingstatements, which may or may not come to fruition depending on certain circumstances, including those outside the control of management. Please be advised that ZIB hasnot undertaken, assumed no duty and are not obligated to update the Information. In addition, please be advised that past financial results do not predict future financialperformance. The material in this presentation is designed to present potential financing structures and options for discussion, however it does not represent a commitment tounderwrite bonds, place debt or provide financing and thus should not be relied upon as a promise of financing or underwriting commitment.
Survey the Audience
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Strategic Planning
Response Percent
Annually 32%
Every 2-3 years 13%
Every 4 years or more 29%
Never 26%
A transformation is upon us. It is about whether you plan to reinvent yourself and redefine your
business based on the transformations happening, or whether you stand still.
-Daniel Burns, Huffington Post
5 Indicators reveal when your sector is about to be transformed.
John Sviokla“How Old Industries Become Young Again”
Strategy + Business, Issue 76 Autumn 2014
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5 Indicators
5 Indicators
New Customer
Habits
New Customer
Habits
New Technology
New Technology
New Competitors
New Competitors
New Regulation
New Regulation
New Means of
Distribution
New Means of
Distribution
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What signals are emergingin your communities?
Growth Maturity
Decline
Revival
Death
Birth
Life Cycle of an Organization
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The average lifespan of leading US companies has decreased by more than 50 years in the last century,
from 67 years in the 1920s to just 15 years today.
-Professor Foster, Yale University
5 Key Points of Recommended Change
1. Guidelines that help boards to promote prudence, but to also understand that being risk averse is itself a risk
2. Regularly assessing whether or not the work of the charity is still relevant in a changing world
3. Increased expectations about board composition, ethical standards, and terms of office
4. Increased emphasis of the role of chair of the board in promoting good governance
5. Increased emphasis on openness about their work, results, as well as about the interests of trustees and those involved in leadership
Source: Not-for-Profit Quarterly, February 2017
…at the higher levels of board thinking, the whole enterprise is put in the context of the overall business situation. [Strategic] Thinking encapsulates past
experiences, current information and expectations about the foreseeable future. It is an ongoing
process, not the creation of a specific plan.
Bob Garratt, 2003, Developing Strategic Thought
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1. Prepare – Review, inform and educate planning participants
2. Include – Ask all stakeholders to weigh in
3. Assess – Summarize and share expertise
4. Define – Strengths, weaknesses, opportunities and threats
5. Identify – Collaborate and refine strategic objectives
6. Adopt – Establish key drivers for decision-making
7. Implement – Move forward with an actionable plan
STRATEGIC PLANNING – 7 Steps forming your strategic plan.
Common Themes from 20+
• A need to reposition
• HC Reform/Regulatory
• Recruiting/Workforce Development
• Connectivity– Current
– Future
• Board Development
• Leadership Development
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Beyond Bricks and Mortar
• Changing health care environment
• PAC strategy
• Technology
• War on Talent
• Changing resident expectations
• Wellness
Changing Health Care Environment
• Develop post-acute care strategy– Aligns with origination's future plan
– Achieves mission / vision
Home HealthHome Health
ILUILU
ALAL
MCMCSNFSNF
HospitalHospital
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We are on the cusp between “what is” and “what will be”
How to create opportunity out of change
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Do your resources support your strategy?
Financial MeasuresFinancial Measures
Benchmarking ComparisonsBenchmarking Comparisons
Best PracticesBest Practices
Setting Financial Targets
Setting Financial Targets
Metrics that Matter Most
• Need to establish a small number of key metrics that are critical to your success.
– Resident Satisfaction
– Occupancy
– Sales and Closings
– Revenue
– Net Operating Income/Margin
– Labor
– AR
– Cash and Debt
Ensure visibility and accountability to these metrics.
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Capital Manor
• Opened in 1963
• Currently 281 independent living apartments, villas and townhomes
• 83-bed health care
• No direct CCRC competition in Salem
About the Speaker
• Industry for 25+ years
• Life Care Services 18+ years as an Executive Director at Lifeplan/CRCC Communities
• Capital Manor 7+ years
Board’s Reason for Envision
• We already were working on a Master Plan for expansion.
• Wanted to make sure we were preparing not just for 5 years but 10 years down the road.
• Wanted to make sure we were not neglecting current needs operations while working on the Master Plan.
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Envision Planning Report Highlights
• Summary of Speaker’s Main Points
• SWOT Analysis
• Summary and Next Steps
• Only 11 Pages
The Board Met Again and Prioritized
• On-site home health and healthcare, physician access
• Technological upgrades and expansion for both operational and resident needs
• Recruitment and retention of staff: education, educational partnerships, internal career ladders
• Expansion planning for facilities and operations
• Multiple dining venues, amenities, choices
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Current Status
• Have staffed Home Care and applied for our licensure
• Adopted Odessey Resident Portal
• Changed all work computers to cloud-based
• Hired a Human Resources generalist (former intern at Capital Manor).
• Promoted staff to be Nursing Staff Development
Current Status
• Completed a best practice analysis for Memory Care and Manor Care (RCF)– Increased staffing
– Added new resident programs
– Added a formalized Memory care training for all staff
• Liked it so much, we are doing a Best Practice Study for Dining and Wellness this year
Where we are now…
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T H A N K Y O U
Sarkis GarabedianZieglerEmailPhone
Tim CainLife Care Services
EmailPhone
David LewisCapital Manor
EmailPhone