Why Capital Planning Should Be a Top Priority for Your Senior Care Operation
Capital planning isn’t just for disasters and emergencies; in fact, not addressing capital planning routinely actually can make troubled times much worse. If you look to the future and do something about it in the present, everyone will sleep better – and you can avoid the headaches poor capital planning and unfunded capital requests can cause.
Get our 4 steps to capital planning in this new guide.
It may be tempting — in fact, it’s fairly common — to rank or prioritize capital projects and planning based solely on estimates of profitability and financial impact. However, it is important to look at all aspects of risk, including the human components, to determine what projects and expenditures are most likely to meet expectations and contribute to the health, safety, comfort, satisfaction and security of your residents and staff.
Assess Your Risks… All of Them
Establish a process to identify and reassess material risks on a regular basis. This should not just involve banking issues such as credit, interest rates and liquidity, but also risks regarding operations, reputation and legal issues. Some risks are more easily quantifiable, but for those that are not, such as potential impact on employee satisfaction or public complaints by residents or family members, qualify these based on the potential exposure these risks might cause.
For instance, what does it cost to replace cracked pavement in front of your community? What would be the impact of a trip or fall by a resident?
Evaluate each project consistently. Once you have a clear vision of risks, you can do a deep dive for specific potential hazards beyond your communities, buildings and infrastructure. For instance, look at the risks for HVAC system failure: Resident satisfaction could suffer, your reputation could be damaged, and staff and residents could be put at risk for illness.
A consistent approach to risk evaluation enables you to address human risks as confidently as you do financial ones. This information will help you have a deeper and more meaningful discussion about how to mitigate the risks you identify and will benefit you the most in the long term. It also makes it less likely that you will be blindsided by unexpected complaints, resident or staff injury, negative press and even lawsuits.
Seek Employee Input on Needs; Plan for Infrastructure Intrusions
Involve employees in capital planning. Seek the input of those who know the buildings and infrastructure best. Are maintenance staff making lots of repairs to the HVAC system? Is the front office getting call after call about apartments being too hot or too cold? Do caregivers, nurses or others notice worn carpeting or loose bricks that could be a hazard? Are housekeepers or caregivers hearing residents complain about plumbing, roof leaks or other issues? Your frontline teams can help identify priorities and then you can use your work and asset data to justify needs for capital projects and planning.
Plan for contingencies. If extensive changes or updates need to be made in senior living buildings or communities, consider how this will impact residents. Capital planning should include funding to relocate senior living residents as necessary, but this planning also needs to involve a human element.
- What will make relocation less disruptive and more acceptable?
- How will you communicate information about when and why a relocation may be necessary?
- If healthcare or health-related services are provided on-site, how will people access these during a relocation or evacuation?
- If residents only have to leave for a day or two, what (if any) of their expenses will be covered?
Be a Senior Living Capital Management Communicator
Make sure your senior living residents and their families know what will happen if a building has to be evacuated or a senior care/living service is suspended because of routine maintenance/updates/renovations or urgent situation. Give them something in writing on move-in, have signs/posters in laundry rooms and other places, and hold senior care family night programs or other community events to share information and answer questions.
By having a broad and strong capital planning effort that involves all of the issues and stakeholders in your senior living community, you can ensure that the right projects get the right attention at the right time. You can prevent ”pet projects” from getting undeserved attention, you can create an engaged senior care team, and you can ensure that residents enjoy their homes and are likely to recommend your community to others.
To learn how Dude Solutions helps senior living providers master capital planning and manage risk, request a free consult.