At not-for-profit senior living organizations, the board of directors plays a pivotal role in setting strategy that supports the organization’s mission, ensuring financial integrity and the effective use of resources. Factors such as changing consumer preferences, advances in technology, inflationary pressures, workforce challenges and changing healthcare reimbursement and regulatory policies can have major effects on an organization’s financial health.

There are five ways boards can stay ahead of those issues and drive organizational excellence with informed decisions while enhancing their organizations’ long-term financial sustainability and ensuring that they are well-positioned to provide high-quality care and services.

Boards must be aware of emerging trends and looming obstacles to address challenges before they become problems, and they must capitalize on opportunities to adapt financial strategies, expansion and repositioning approaches, risk management protocols and compliance measures. 

2. Assess the financial stability of their underlying business model

To achieve their core mission and purpose, boards need to regularly assess the sustainability of the programs and services provided by their senior living organizations. Boards should deploy appropriate mechanisms to understand and be routinely educated on the underlying business model and the drivers that could influence success, such as key financial and operational metrics, utilization of services, service offerings, workforce matters, consumer preferences, and real estate and economic trends.

Those factors directly affect revenue streams and operational viability. Obtaining a comprehensive understanding of those factors and their effects on the organization’s underlying business model will serve to increase the likelihood that the organization’s financial position will be at levels to remain sustainable and support strategic initiatives.

3. Overcome workforce challenges with innovative solutions

Workforce challenges are expected to continue to affect senior living organizations in many critical ways. To begin, the growing demand for aging services increases the strain on the industry’s workforce — a group that, in many instances, already is handling physically and emotionally demanding tasks, contributing to high turnover rates. Workforce shortages, permanently high wage rates for certain employees and the need for specialized training in geriatric care aren’t helping matters either.

To address those issues, boards should encourage innovative workforce solutions, such as the deployment of robust and engaging training programs, adaptable recruitment and retention initiatives, and strategic workforce planning and scheduling.

Those actions may help mitigate employee turnover, minimize agency usage and ensure a sustainable and high-quality care environment that helps organizations stand out as employers of choice.

4. Implement a smart growth strategy

Senior living boards must ensure that strategic growth goals align with organizational goals, financial sustainability objectives and general compliance standards. There is no such thing as a “one size fits all” growth strategy for senior living organizations.

A deliberate approach to strategic planning will ensure the appropriate strategy for an organization. Developing the best growth strategy can be time-consuming, but it is an investment that every organization needs to make to ensure its long-term financial viability and relevance in the marketplace for future generations.

5. Strengthen strategic partnerships and affiliations

When senior living organizations engage in strategic partnerships (regardless of the type of of partnership), boards should ensure that the arrangement aligns with strategic intent and that management has effectively evaluated the economic implications, stakeholder impact, regulatory considerations and overall risks, including a thorough assessment of the financial health of potential partners. Additionally, boards can help ensure that management teams establish a robust integration plan and reporting mechanisms to effectively monitor the progress and outcomes of the strategic partnership.

By using an intense financial and risk management lens, senior living boards can ensure that those collaborations align with organizational goals.

Jennifer Schwalm is a principal with Baker Tilly and leads the firm’s senior services consulting practice. Mark Ross is a principal with Baker Tilly and leads the firm’s healthcare provider practice.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

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