Senior living facilities are currently home to more than 2 million people in the U.S. alone—and that figure will likely rise as the population ages. The number of Americans who are 65 and older is projected to increase by 47% between 2022 and 2050. This represents a rise from 58 million to 82 million during that time frame.
Based on those statistics alone, the industry is going to continue to experience rapid growth and will need to accommodate the increasing life expectancy of seniors exacerbating the challenges facing senior living providers.
Even though they provide a critical public and personal service, many senior living facilities are run like any other business. However, to provide the care that millions of older adults and their families depend on, senior living centers must ensure they have solid finances to support sustainable operations and growth.
Elder care is a complex business, one that forces CFOs, controllers, budget managers, department heads, and other stakeholders to manage:
And, of course, companies need to juggle all of these factors while ensuring their organizations provide high-quality, empathetic care.
That’s a lot for anyone to handle—but the job becomes almost impossible when organizations rely on outdated tools to manage their operations rather than modern extended financial planning and analysis (xFP&A) solutions. With xFP&A, CFOs, their staff, and the organization's stakeholders can consolidate financial and operational data to create a single source of truth, calculate accurate revenue and expense budgets and forecasts, do predictive modeling, and create what-if analysis for scenario planning.
Key performance indicators (KPIs) can be established and tracked, along with benchmarking financial metrics for senior living. While this is necessary for a single facility entity, it’s even more crucial for multi-location and multi-company entities. This functionality not only improves strategic decision-making by providing comprehensive real-time insights, but also enables senior living companies to proactively plan for their future.
With an xFP&A solution like Solver for senior living, it’s easy to report on numerous KPIs. Here are eight operational and financial metrics senior living CFOs should watch closely—but often don’t have the information to do so easily.
1. Occupancy Rates
In senior living facilities, everything comes back to occupancy. The number of filled beds (residents prefer the term “apartments” or “units”) ties directly to the facility’s financial success, since revenue is generated per-resident.
2. Revenue and Cost per Resident
Savvy senior living executives go beyond raw occupancy rates to delve further into the data, monitoring per-resident revenue and daily costs to gain a fuller picture of the organization’s financial health.
3. Staff-to-Resident Ratios
A senior living facility’s #1 purpose is providing great care for its residents. That means senior living executives need to employ enough people to get the job done well—and avoid issues such as staff burnout and turnover.
4. Resident Health Conditions
CFOs and other financial professionals need to know not only how many people live in their facilities, but also which conditions those people have. Why? Understanding residents’ health statuses helps executives understand their care needs.
5. Individual Facility Performance
Many senior living facilities are multi-location organizations. That means it’s important for their executives to track KPIs and financial metrics on a per-location basis, as well as on a consolidated basis to make sure certain branches are not underperforming in relation to others and overall.
6. Percentage of Private-Pay Residents
Among the many challenges senior living administrators face is managing diverse revenue streams. Many facilities house a mix of residents who are paying out of pocket, with commercial insurance or Medicare.
7. Resident Satisfaction
Executives must monitor resident satisfaction ratings. Of course, senior living leaders want to ensure they are delivering on their facility’s promise to residents and their families.
8. Efficiency and Effectiveness of Mission Delivery
Senior living providers are under pressure to use their resources effectively and efficiently to closely adhere to the mission set forth by the board/executives.
As the population continues to age, depending and relying on the senior living sector will also continue to grow. That puts additional pressure on leaders who must be certain their organizations are properly staffed, well run, and financially prepared to offer continuous, high-quality service, even as demand grows and complexities multiply.
With Solver’s xFP&A solution for senior living, CFOs and other stakeholders throughout an organization will be prepared for whatever the future brings.
Are you ready to meet up with the full potential of your senior living operations? Visit our Senior Living Industry page and schedule a discovery call to see how we can transform your financial and operational planning, reporting, multi-facility consolidation, and analysis processes.