Life plan community affiliates with regional, multisite organization to revitalize campus community

Client background 

A life plan community located on the East Coast that operated as a single-site campus in a rural, underserved area.  

The business challenges 

The senior living organization was experiencing challenges with an aging building, utilization of semi-private rooms for healthcare services considering the coronavirus pandemic, and shortfalls in third-party reimbursement for the services provided and recognized the need to make significant changes to its business model. The organization was also facing ongoing staffing shortages due to its rural location and had a difficult time attracting and retaining talent compared to one of its local competitors. With the pandemic acting as a catalyst to its already ongoing stressors and having to close additional beds that detracted from its revenue, the organization was looking for solutions to help turn its campus around.  

The organization also incurred recent leadership changes with a new CEO and CFO, who were handed master plans from the board and previous leadership about campus redesign efforts. Before going forward with that master plan, the new CEO decided to pause and instead engage an advisor to conduct a market and financial assessment to study the feasibility of the plans and ensure it made the most financial and strategic sense for the business. 

Baker Tilly’s solution-driven approach 

The organization contracted Baker Tilly to conduct a market assessment to better understand the local market, consumer preferences, economic trends and insight into what would make most sense for the business moving forward. After the market study was completed, Baker Tilly also assisted with consumer testing, focus groups, pricing analysis, financial planning and strategic planning.  

Baker Tilly worked with the board to identify and assess two critical pathways: a pathway to sustainability as a single site community and a pathway that contemplated an affiliation with a like-minded organization. The pathway to sustainability included a short-term plan to close its nursing home and focus on an alternative continuum of services as a life plan community. After a process that included the board’s discernment, education, assessment of core operating capabilities and various analyses, the board ultimately determined the organization’s ability to continue its mission-driven services in perpetuity would be best achieved in partnership with an affiliated organization.  

Once the board reached its decision, Baker Tilly helped the organization navigate the affiliation process by helping the board identify preferred characteristics of an affiliate that would align regarding mission and culture, as well as potential non-negotiable considerations. Baker Tilly also helped identify a list of possible organizations to affiliate with, including another Baker Tilly client that the organization ultimately decided to pursue based on similar cultural values and goals.  

With both parties in agreeance to pursue the merger, Baker Tilly helped facilitate the discussions for the affiliation, including 

• Conducting due diligence and strategic planning work to understand all the benefits that each organization would bring to the table 
• Facilitating conversations about non-negotiable items that had the potential derail the combination 
• Helping redefine the organizations’ vision, mission and values 
• Supervising work with the board around governance and sustainability 
• Navigating the business elements of the definitive agreement 
• Ensuring progress on defined timeline 

Baker Tilly also helped refine the master plan with input from both parties prior to the merger to ensure a long-term financially sustainable campus that accommodated market demand for services.  

The accomplished results 

The underlying objective of the master plan was proven to be a better financial decision based on the market assessment and consumer preferences. This caused the merger to be successful, which created multiple synergies for both organizations as well as the local community. It also allowed the new leadership team to move forward with the reworked master plan to incorporate more independent living units on the campus that still offers a continuum of care and services supplemented with home-based services. The life plan community also entered a partnership with a nearby nursing home to meet resident’s health needs when necessary.  

In addition, the organization has benefited from the affiliate’s financial accounting and billing systems, a more established human resource and finance department with upgraded technology systems, and other supportive roles. Additionally, staff are benefiting from more career opportunities, that has helped with attrition, now that it reports up to a company that has multiple campuses with additional growth potential.