Repositioning ROI: Synergy in Design, Care and Finance LeadingAge Annual Meeting November 1 st , 2015 3:15 – 4:45 PM Presenters: Rebecca Donato, Chief Operating Officer, North Hill Adam Goldman , Director of Operations, Marquis Health Services Mark Moeller , AIA LEED AP, Principal, JSA Architects Christine Rancourt , Project Manager, JSA Architects Provider Number: G318 Course # 119040A
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Leading Age 2015 Presentation Repositioning ROI Synergy in Design, Care, and Finance
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Repositioning ROI: Synergy in Design, Care and Finance
LeadingAge Annual MeetingNovember 1st, 2015
3:15 – 4:45 PMPresenters:Rebecca Donato, Chief Operating Officer, North HillAdam Goldman, Director of Operations, Marquis Health ServicesMark Moeller, AIA LEED AP, Principal, JSA ArchitectsChristine Rancourt, Project Manager, JSA Architects
Provider Number: G318Course # 119040A
Credit(s) earned on completion of this course will be reported to AIA CES for AIA members. Certificates of Completion for both AIA members and non-AIA
members are available upon request.
This course is registered with AIA CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any
method or manner ofhandling, using, distributing, or
dealing in any material or product.
Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.
This presentation is protected by US and International Copyright laws. Reproduction, distribution, display and use of the presentation without written
True North is the latest chapter in the story of North Hill, the leader in Massachusetts continuing care retirement communities and a major initiative that has transformed their campus into a vibrant community. A few years ago North Hill’s outlook was not so bright. Occupancy was at an all-time low, and the need to change and evolve was evident. They embarked on a new repositioning journey that would transform their campus visually, culturally, and financially.
From a design standpoint, they will discuss how the design team partnered with North Hill to help them improve campus amenities, transition to a “Small House” model of care, and reestablish themselves in the Senior Living community. Operationally, speakers will present the challenges of culture change for both the residents and the staff at North Hill. This will be explored from the initial stages through post occupancy. Speakers will discuss their evolution from a traditional standard of care to the “small house” model. Finally, speakers will look at the return on investment holistically– from a design, care, and financial standpoint. The session will conclude with a presentation on the overall impact of this initiative. How did the repositioning project fulfill its original goal of revitalizing this community? What was learned during the process? Presenters will explore and analyze the data from the project as a whole.
CourseDescription
LearningObjectives
1. Hear about a repositioning initiative that transformed a tired campus into a revitalized community.
2. Discuss the multiple phases of design and construction to improve campus amenities and transition to a small house model of care.
3. Explore the return on investment to the organization from a design, care and financial standpoint.
4. Realize how embracing innovation resulted in better meeting resident need, as well as aligning with the preferences of new consumers in the marketplace.
At the end of the this course, participants will be able to:
Project Background
North Hill Overview• Single site CCRC 12 miles West of Boston• Roots of Innovation
– Babson College Connection– Creation of the 90% refund
• Extraordinary success 20+ years– 2nd CCRC in Massachusetts– Decades with 100+ wait list– In 2006, largest single site portfolio
2006 Scenario
• Solid occupancy, but board knew change needed• New CEO recruited• Conducted Strategic Planning Retreat• Outcome: Recognized that existing campus /
product in dire need of change
Marketing & Product Challenges• Physical plant – no changes since 1984• 65 units < 600SF• Undesirable and limited common areas• No assisted living or memory care• Semi-private SNF• Very frail population in IL• Home health services given away
postponed SNF moves until very sick• Healthy residents disturbed by increasing frailty• Memory impaired residents req’d other facilities• Home Health used by some, subsidized by all• Embraced holistic wellness but few amenities• Dark, depressing environment
• Antiquated systems• Silo mentality• Service creep• Cultural barriers
–Superiority–Complacency–Resistance to change
Operational Challenges
Master Planning Process
Strategic Objectives
Secure long-term sustainability of North HillRebrand / reposition in the marketplace Defend our marketIncrease the value of our Lifecare PromiseRestructure the business modelRe-infuse spirit of innovation
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Master Planning Process• Evaluate market perceptions• Understand future market desires• Understand current resident desires• Assess marketing priorities • Estimate the investment needed• Determine the optimal sequence• Develop financial model
15
Primary Market Area Map
Competitive environment
changed dramatically
between 1984 and 2007
Still attractive room to grow
Conduct Market Analysis
16
Resident Input
17
• Focus Groups with all residents–27 page report
• Identified top 5 priorities• Significant resistance• First change in 22 years of history• Board Member served as “Ombudsman”
Resident Priorities
• Add assisted living and memory care• Modernize skilled nursing• Ensure physical connectivity to Health Care • Sustain service during construction• Minimize disruption• Provide open communication channels
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Conduct Competitor Study & Customer Surveys
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Guideposts for Our Journey
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Creating platforms and being partners to residents in the fulfillment and ongoing
discovery of their passions
Guideposts for Our Journey
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Team Selection Process
Extensive design “charrette” and team
selection process
Board and management engaged a team of senior living and
development experts
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The Project True North initiative is designed to evolve North Hill’s living accommodations, common spaces and programs so that the
community more closely resembles what would be
standard if North Hill were being built today.
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Design & ConstructionPhase One
North Hill 2006
Project Changes - Campus Occupancy• 1984
• Original IL 341• Skilled Nursing 72*
*12 beds added in 1992
Phase One Design Priorities
Create an arrival experienceImprove wayfindingMake the entrance visible Redesign landscaping
Make room on campus for expansionRelocate maintenance buildingRedesign loading dockRedesign traffic flow and parking plan
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Enhance existing buildingExpand lifestyle amenitiesModernize common area interiorsCreate “social gathering” spaces
Phase One Design Priorities
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Bring IL apt finish levels to market standardsModernize the 1984 finishes
Adjust unit mix to be competitiveCombine small aptsRebuild the mix by constructing new large apts
30
Phase One Design Priorities
Phase One Design Themes• Support multi-dimensional wellness• Provide central spaces that elicit socialization• Generate engagement through spaces • Increase visual connectivity
Phase One Design Themes• Allow for more natural light• Incorporate more elements from nature• Create more expansive interiors • Add grandeur • Create a contemporary feel
Staffing Up• Traditional Economies of Scale Vs Small House
Teams
7-3 3-11 11-7 Hrs/DayTotal
Hrs/Day
Old SNF UMs/Nurses 6 5 3 112Aides 10 8 4 165 277
New Small House Nurses 4 5 5 112
CarePartners 14 14 7 262.5 374.5
Challenges
• Training / Philosophy of Care Change• Team Member Envisioning of Space• Operational Plan Development• Hiring New Team Members• Construction Schedule/DPH Engagement/Move
Planning• Family Anxiety/Concerns
Design – Phase Three
PHASE Three2015 - 2016
Independent Living Expansion
95
The Avery Expansion
Results
Impact on Independent Living
• Market responded quickly to Phase One • Refueled Sales!• Design was right on target
–Apt combinations–Apt finishes/redesigns–25 new or renovated amenities– Improved arrival experience
5,000+ Leads Generated
481
1223
1436
1015882
0
200
400
600
800
1000
1200
1400
1600
FY11 FY12 FY13 FY14 FY15
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> 50% of all IL Inventory Resold Since Project Launch
In Fiscal Year 2015, in addition to 28 IL closings,
our sales team took 44 of 45 potential deposits
on Phase 3 construction of new luxury IL units
IN 6 WEEKS.
Year End Occupancy
76% 81%87% 92% 88%
0%
20%
40%
60%
80%
100%
FY11 FY12 FY13 FY14 FY15
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The reason for FY 2015 dip = 18 IL Residents moved to new Enhanced Living last 5 months
• Added value to Lifecare contracts• More engagement of compromised residents• Met dire need for memory support• Added private pay revenue pool• Expanded EF pool
Impact of Adding Enhanced Living
• Created a more dignified living experience–Home environment, not hospital like–Peacefulness - no call bells, alarms–Privacy–Access to outdoors–Long term and short term residents separated
Impact of New Skilled Nursing
• Improved Occupancy and Private Pay revenue• Expanded referral network into SNF• Increased referrals to Home Health agency
Impact of New Skilled Nursing
FY 2013 - 2015 Average
FY 2016 to Date (April - Sept 2015)
Private Pay % 19% 24%SNF Occupancy 90% 95%
Impact Since Opening of New SNF January 2015
• Historically, annual operational losses were funded by investment portfolio
• Restructured model = self-funding ops• Potential EF pool increased by 30%• Eliminate ($1.5M) yearly loss of in-home support• Productivity initiative to reduce expenses $1M
• Projected breakeven end of FY2017
Projected Long TermFinancial Impact of Project
Other Project True North Fun Facts• Renovated or constructed 475,000SF• Existing apartments reno’d to date 170• New apt constructed (45 IL+45 EIL+72 SNF) 162 • Sliders and windows replaced 978• Courses & Events attendees since Nov 2011 3860• National awards won 10
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Overall Results
Enhanced resident quality of lifeIncreased value of Lifecare contractSuccessfully repositioned in market Secured future of community
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Learning Lessons & Biggest Successes
What Would We Do Differently?
• Not wait for competitive crisis to change• Better supplement ops team bandwidth• From day 1
– Hire an Owner’s Rep– Manage Apartment Renovations internally
• Select a CM with senior living experience
What Would We Do Differently?
• Before Design Development –Engage the small house ops consultant–Build entire small house ops plan
• Dining and low voltage systems–Don’t assume another models work for you
What Were the Biggest Successes?
• “True North” marketing strategy• Impact of experiential marketing on rebranding• Design priorities hit the mark!• Immediacy of demand returning after apt renos
began and Commons project was complete
• Smoothness of SNF relocation• Final DPH architectural and clinical approvals• Increased engagement of SNF residents in
household model• Eagerness of residents to move to EIL• Preservation of a “one-community” feel