The challenge
One of the nation’s largest faith-based not-for-profit healthcare organizations that was looking to grow their senior living division posed a unique benchmarking, valuation, and developmental challenge.
The healthcare organization was hoping to grow and expand their senior living segments while operating in more than 30 facilities across different states. They needed to develop and shape a proposal that was both concise, comprehensive, and compelling in form within only five weeks.
Besides being geographically diverse, the healthcare organization’s facilities also contained different operating models, and corporate structures further adding to the overall complexity.
The solution
In less than five weeks, we identified operating inefficiencies, conducted on-site facility wide valuation and disposal analysis, and developed a comprehensive development proposal. This helped the senior living division prepare for a $1.6 billion proposal for the development of 75 new senior living facilities across multiple states to align with their primary acute care locations.
In order for the healthcare organization’s senior living division to meet their targeted growth, we recommended they implement comprehensive benchmarking and identify true comparable data across their multiple locations and facilities.
This customized benchmarking for each facility allowed us to identify potential savings, provide a high-level estimate of the sale value for each facility on the disposal list, and identify the most attractive future markets for expansion and acquisition.
The benefit
Our expertise in both senior living, as well as acute-care capabilities allowed us to provide unique and customized solutions to the client, becoming a one-stop shop for the healthcare organization’s market research and financial needs. Our team provided:
- Customized benchmarking to develop true “comparables” across their facilities, which identified $17 million in operating improvements based on industry benchmarking. This resulted in an increase of $190 million in enterprise value.
- Facility disposal and valuation estimates which provide the organization focus and direction for effective consolidation.
- Market analysis for expansion and acquisition. The framework for a $1.4 billion development plan was created, with a return on investment of 15 percent.
Through these three solutions, we helped create a clear and focused action plan, which identified geographical areas containing real market growth opportunities for the healthcare organization. They are now on target to grow their senior living division over a seven-year plan.
Ready to learn how your facility measures up? Request your custom Plante Moran EDGE Benchmarking report.
