Do you use a pay phone or a smartphone? Do you use an atlas or navigational software?
Just as telephone and directional options have changed, demands for enhanced services in the senior living market have changed, too. Has your community or campus shifted with the demand?
Communities that once were on the cutting edge can become outdated and in need of scrutiny to determine how to maintain their relevance. By monitoring industry trends and understanding cultural changes — and by shifting mindsets, positions, assets and employees — the effectiveness of a community can be restored.
Following a lengthy research, study and due diligence process, Woodside Senior Communities in Green Bay, WI, embarked on a complete master-planning process. This process resulted in the development of a two-phase, $15 million facility project to renovate and expand the full continuum-of-care senior living campus, which includes affordable housing, independent living, assisted living and skilled nursing and rehabilitation. The effort to reposition the campus would allow Woodside to expand and enhance the services it offered and successfully meet market demands for the next 15 to 20 years.
Healthcare reform adjustments have affected almost every business in America, but few have been affected like the senior living industry.
The custodial care (residents-for-life) model was the backbone of the industry for many years. Rehab-oriented care — also known as short-term or transitional care — is growing significantly due to alterations in Medicare Part A, the shifting demographics and mindset of our society, and advances in medicine. Changes in one aspect of the senior care continuum, such as skilled nursing, can affect other aspects as well, and an emerging market opportunity is rapidly influencing the way many senior living providers plan for the future.
The mindset regarding the aging progression has changed with baby boomers, the group born between 1946 and 1964. This shift has created a substantial opening for those seeking to capture this market by focusing on the replacement of hips, knees or shoulders. For many hospitals that offer these surgical services, it is not cost-effective to also provide rehabilitation services. They have found a quality solution in forming partnerships with trusted skilled nursing facilities. In addition, healthcare reform has applied penalties for hospitals based on readmissions, which has increased the necessity for reliable rehab partners.
Using Woodside as a case study
Woodside’s comprehensive due diligence, which included an analysis of the existing campus and the current and future market demand, ultimately led to a master-planning endeavor. Woodside’s leadership took numerous steps to enhance the organization — such as examining past campus development decisions and reviewing their current financial position. The management team then used that information to help formulate its direction. It studied the evolving market, recognized an underserved niche, researched the community’s debt capacity and identified its onsite assets and resources. The fully integrated project team that Woodside assembled looked at various critical aspects they were responsible for throughout the process, including financial, operational (efficiency) and physical/facility.
Woodside’s leadership considered project elements such as setting realistic timeframes and schedules, working collaboratively with a board of directors, overcoming municipality issues and challenges, and successfully partnering with a team of expert consultants to incorporate the latest and most appropriate trends in senior care.
A market study was used to keep the board active and involved. It provided key factors that helped leaders make timely decisions, including valuable market demographics and information on the competition. The results highlighted how outdated various Woodside facilities were. This started the process of creating a request for proposals for master-planning services. In addition, a pro forma was developed that helped determine borrowing capacity and identify how much capital was necessary to invest in the project.
Woodside’s market research found:
- The local market area demand was declining for long-term care beds.
- An opportunity existed to improve payer mix if private rooms were created and the physical plant improved.
- Four competitors recently remodeled or rebuilt their facilities.
- If the physical plant was improved, opportunities existed to increase short-term stay/rehabilitation days.
- Woodside private-pay was strong compared with the competition but had room for improvement.
- The opportunity to add assisted living was limited to the memory care market.
Planning and design
The strategic-planning process included incorporating the market study to establish priorities, determining physical plant upgrades needed to remain competitive in the market and reviewing physical plant issues related to resident care and staffing efficiencies. Additionally, financial evaluations were conducted to quantify the anticipated market share increases while also considering current and future trends in resident care and service.
Key programming questions that informed staffing decisions and drove the budget:
- Who will we serve?
- What is our target demographic?
- Who will we not serve?
- What services will we offer?
Once input and data were accumulated and processed, campus programming and design began. Vital components during design included communicating with key stakeholders, such as residents, neighbors, hospitalsand the community; considering project phasing; and identifying how to maintain occupancy and revenue. The design evolved as involvement from Woodside staff, engineers, technology consultants, interior designers and operational consultants weighed in. Additional RFPs were distributed to banks and investment brokers, and the financial forecast was established, further clarifying the timeline.
Construction and operation
Phased construction began in October 2013 after a competitive bidding process, which enabled many local subcontractors to participate in the project. Regular meetings and consistent communication monitored contingency usage, change orders, and bid package timelines, and created a safe construction site. Phase two of Woodside’s campus expansion and renovation wrapped up in November 2015.
This critical, two-phase project enabled Woodside to reposition its campus and set it up for continued, long-term success by adding dementia care facilities and enhancing existing skilled nursing; introducing a 49-unit rehabilitation center; and creating a stunning primary entrance to the campus.
Key lessons learned
Woodside’s campus repositioning process not only was a positive initiative that enabled it to expand the services it offers and position itself well for the future; it also provided some great lessons that are worth sharing:
- Create a cohesive internal team.
- Confirm that your “house is in order” from an operational perspective.
- Practice patience.
- Keep in mind that dollars never go as far as desired, so be prepared to prioritize.
- Choose strong partners.
- Engage your staff, residents and their families, and seek their feedback.
- Work as a team, but remember to lead and make decisions as necessary.
- Enjoy the journey.
Plan to shift
By staying on top of changes in both the industry and our culture, and by acting appropriately, your campus or facility can be repositioned or renovated to meet current demands. Senior living providers that monitor the landscape and take action will reap the benefits of excellent referrals, a vibrant brand in the market … and superior performance.
Woodside Senior Communities’ campus repositioning project included renovating its skilled nursing area, adding a 20-unit assisted living memory care facility and a 49-unit rehabilitation center, and creating a new primary entrance to the campus.
Woodside Senior Communities’ new Woodside Rehab has provided a progressive and fully outfitted rehabilitation option for business relationships with area hospitals. Large enough to accommodate multiple patients at once, Woodside Rehab features a comprehensive mock apartment, a partial car, a multi-surface exterior courtyard and a diversity of the latest equipment.
Woodside’s campus repositioning was deemed necessary following leadership’s examination of the evolving market and recognition of an underserved niche. The goal was to expand services offered and position the senior care provider for long-term success.
Kevin Madalinski (pictured above) is director of construction services for Hoffman Planning, Design & Construction Inc. With a bachelor of science degree in architectural engineering from the Milwaukee School of Engineering, Madalinski offers almost 25 years of construction management and engineering experience. He has partnered with more than a dozen senior living providers, collaborating on more than 20 facility-related projects nationwide.
Randy Bremhorst (left) is vice president of design at Hoffman Planning, Design & Construction and is a member of the Society for the Advancement of Gerontological Environments. With more than 30 years of experience in the design and construction industry, Bremhorst is a graduate of the University of Notre Dame’s School of Architecture, which included a year in the Rome Studies Program.