Your Primer to Healthcare Mergers and Acquisitions
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Building It Isn't Enough: 9 Ways To Optimize Value In Senior Living Services

Apr 14, 2015

by Kent Kohn

By Kent Kohn, MBA, CEPA, CM&AA and Tom Schramski, PhD, CM&AA

Volume 2 Issue 8, April 14, 2015

With the convergence of longer life expectancy, the insistence on higher life quality, and emerging consumer sophistication, the market for senior living services is evolving rapidly.  The evolution is requiring that successful operations not only diversify their offerings (variations on traditional assisted living facility models), but also provide “value enhancers.”  These requirements are necessary not only to attract customers, but also potential buyers who are looking beyond adjusted EBITDA and price per bed.

To maximize the value proposition for all parties, here are some developing trends to consider:

  • Wellness promotion – even as the average resident age is approaching 85 years, customers evaluate service in terms of what is offered to enhance life quality – massage, exercise, and other community activities of personal value.
  • Many steps – the more variations on traditional models with maximum independence there are, the better, including “distinctive amenities” that pay attention to customer feedback (apartments with bedrooms vs. studio apartments).
  • Cultural linkage – some senior services and centers are creating options for various populations like LGBT or specific cultural groups like Asian Americans.  It’s not about segregation or isolation, it’s about considering options for cultural familiarity.
  • Life long learning – centers are now establishing linkages with educational institutions for customer seeking continued intellectual development for themselves and some facilities are even located close to colleges and universities to enhance learning and social opportunities.
  • Eco-friendly – the eco-attuned population of baby boomers seeking senior living services favor “green” services, including facilities that include active recycling, alternative energy, and even LEED design.
  • Aging in place – while not a new trend, there are new variations on the theme, including blended, village models that provide the sense of home in a structured community environment.
  • Tech-enabled – in addition to WiFi and iPads, 25% of today’s new facilities offer web-based education.  How many customers in your service array are on Facebook?
  • Design to need – one size does not fit all when you differentiate by need, especially for unique services like memory care.  Today, customers and families expect that the difference is noticeable in design and service.
  • Financing flexibility – competitive and new financing models that have become prevalent since the Great Recession increase the opportunities for making an option more attractive to a customer.

As we began, the potential customer base for senior living services is growing and is also increasingly aware of the value they seek.  Entrepreneurial senior living service executives understand that by recognizing this sophistication, they can offer both stellar quality and attract desirable customers.

Kent Kohn

Kent Kohn MBA, CEPA, CM&AA

Former Managing Director

Kent has worked in the healthcare marketplace for over 25 years and has completed the requirements for the Certified Merger & Acquisition Advisor (CM&AA) credential, in addition to his Certified Exit Planning Advisor (CEPA) designation.  His career began in health insurance and preferred provider organizations where he had a key start-up role in a regional employer healthcare coalition.  Later, he became an executive involved in marketing and new business acquisition with various healthcare companies and was nominated for an ADDY award in 2012 in recognition of his expertise.  As an independent consultant, he has assisted multiple business owners in enhancing their value as well as successfully advising them in the M+A process.  His diverse experience, including the insurance marketplace, gives him a unique perspective on the evolving healthcare reform underway in the US.

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