Affiliations and acquisitions are top of mind for senior living and care executives contemplating growth strategies for the next two years, according to the results of the latest Ziegler CFO Hotline survey.
With the exception of growth plans for home- and community-based services, all categories show increased interest from the last report published in March 2021. In survey results released Wednesday, 30% of respondents said their organizations plan to incorporate affiliations or acquisitions into their growth plans in the next two years, the highest level reported since March 2020, when Ziegler first asked executives about growth plans.
Community unit expansion (58%) and new community development (23%) are other growth plan strategies being considered by operators.
Data from a previous CFO Hotline survey showed that the pandemic doubled provider interest in expanding through HCBS, based on increasing consumer demand for such services. Ziegler also noted that service iine diversification offers operators a variety of options for potential growth.
In the most recent survey, 84% of poll-takers indicated that their organizations did not have a leadership position devoted to exploring growth opportunities; the 16% that have a dedicated position are mostly multi-site organizations. Another 7% of respondents said their organizations are considering adding a position dedicated to growth.
Several barriers to growth
But operators realize they face challenges to growth. Workforce shortages topped the list of barriers to growth, followed by construction pressures and financial costs.
Other potential challenges mentioned by executives were operational and financial struggles within their organizations, resource limitations, issues related to the ability to access capital and overall reluctance.
Even with those potential barriers, 58% of respondents with projects in the pipeline in the past year indicated that those projects were moving forward. The remaining participants indicated that they either have scaled back projects (9%), put them on hold (25%) or did a combination of those things (7%).
The August Ziegler CFO Hotline poll included 220 not-for-profit chief financial officers and other financial professionals from senior living and care organizations, primarily in continuing care retirement / life plan communities.
