A problem solver for small operators

by Jeff Shaw

Senior Living SMART matches ‘best-in-class’ vendors with senior living communities to maximize efficiency and improve profitability.

By Joe Gose

Like many growing independent seniors housing operators, Commonwealth Assisted Living found itself spending an inordinate amount of time keeping various policy and procedural documents uniform and up-to-date.

The Charlottesville, Va.-based company had grown to 20 assisted living and memory care properties in 12 years, and each facility had its own forms. They were housed on a shared Google drive in no particular order. 

“It was all very disorganized,” says Earl Parker, chief operating officer for Commonwealth. “It was hard to figure out what document version was the newest or when something had been updated.” 

In an effort to streamline the mish-mash, Commonwealth in July began using Senior Living SMART’s SMARTPro portal service. At its root, SMARTPro serves as a repository of the most current documents that Commonwealth’s communities can easily access. 

But it also will allow each community to order products ranging from dining room dishes and silverware to brochures, stationary and other marketing materials, he says. Historically, those processes typically required staffers at the company’s headquarters to expend significant time and effort.

“Our communities can now access what they need in a very efficient manner without have a lot of the people in the home office having to touch it,” says Parker, who estimates that SMARTPro will free up 20 hours a week for one full-time home office employee to spend on more productive tasks. 

“More importantly, it gives people peace of mind that they’re getting the right policies and information, and there’s no frustration related to searching for it,” explains Parker. “We were looking for a solution, and we really understood what Senior Living SMART had to offer and found that it was a very good match.”

Filling a void

That’s the response Senior Living SMART wants. The Sandwich, Mass.-based start-up, founded by seniors housing veterans Deborah Howard and Andrea Catizone, has set its sights on becoming a one-source resource hub for independent operators of seniors housing and skilled nursing organizations that generally own approximately 20 communities or less. 

The fragmented market makes up about 70 percent of the industry in the U.S., and most smaller independent operators don’t have the time or staff to address and solve a myriad of challenges confronting them, from introducing more effective recruitment strategies to adopting technology to satisfy the federal mandate to move to electronic medical records, says Howard. 

The founders of Senior Living SMART — an acronym for strategy, marketing, analytics, resources and technology — have spent nearly two years building the company’s infrastructure and researching service providers and vendors to the seniors housing industry. 

The company partners with those vendors that it deems “best in class” and recommends them to its growing roster of seniors housing members. The firm also provides case studies, white papers and other research on a variety of pressing operating topics on its website. 

Senior Living SMART’s goal is to boost independent operator efficiency, profitability and market share by giving the smaller firms the same tools as national seniors housing companies, which generally possess the internal support staff to make informed decisions when updating accounting software or other operating functions. 

Considering that operating expenses in the seniors housing industry alone are typically $10,000 a unit per year, the company has zeroed in on a substantial niche. 

“Senior Living SMART does what most executive directors and owner-operators just don’t have time to do — demo, vet, compare and price resources nationally and endorse those that solve problems,” explains Howard, CEO of the company, who previously served as a sales and marketing executive for Emeritus Senior Living and Five Star Senior Living. 

“There are a lot of solutions out there to choose from, and deciding on one is really overwhelming and time consuming given the day-to-day challenges of running a community,” adds Howard.

The company charges $30 a month per community for access to its resources.

What Senior Living SMART is not, stress Howard and Catizone, is a group purchasing organization. While the duo aim to give independent operators the same leverage that national brands enjoy, the founders say that the concept’s value extends far beyond providing members with discounts to computers or uniforms. Vendors and service providers don’t pay to become partners with the company. 

“We’re a group solutions organization,” says Howard. “We help operators focus on being more successful today with the basic blocking and tackling of running communities, but we also are providing access to innovation to ensure that they’re relevant tomorrow.” 

Company under construction

Howard and Catizone launched Senior Living SMART in September 2012 and first focused on building the technology. About midway through 2013, the company’s website went live, and the founders also spent much of the year developing partnerships with vendors, suppliers and consultants. In January the company began recruiting members. 

Senior Living SMART signed up 225 communities in 10 months, and Howard expects that number to grow to 500 by the end of the year. The founders declined to discuss revenue growth, but they have funded the business themselves and are looking for equity partners. The company also has signed 60 national business partners to serve its members over the last 18 months.

“At this point vendors, suppliers and consultants are finding us because everyone is trying to figure out how to access and support a very fragmented market,” says Howard. “So, we’re adding business partners on a pretty regular basis.”

Ultimately that enables communities to make smart decisions when they’re looking to increase occupancy or beef up resident-monitoring technology. For example, Executives at Houston-based Belmont Village Senior Living earlier this year wanted to boost the number of tours generated through its website, and so it began investigating a number of companies that provided live chat technology. 

After Senior Living SMART introduced SiteStaff to the seniors housing firm, however, it didn’t take long to make the decision, says Jeff DeBevec, a spokesman with Belmont Village, which operates 24 communities in the Midwest, Southeast and Southwest. The operator was especially impressed with the service provider’s responsiveness to questions about the service, contracts, effectiveness and other concerns. 

During a 30-day pilot program, 50 live chat engagements resulted in 15 tours and two new residents, including a move-in at the company’s Belmont Village Oak Park community near Chicago, he adds. Belmont Village recently contracted to deploy the system as a constant website feature.  

“The live chat company that Senior Living SMART recommended was, frankly, far and wide above the others,” says DeBevec. “So I felt like we were in good hands.”

Now the operator is using other products and vendors endorsed by Senior Living SMART, including firms that conduct post-tour and customer satisfaction surveys and mystery shoppers that compare its communities with competitors, adds Carlene Motto, executive vice president of sales for Belmont Village.

“There’s a lot of interest in innovation, new products, new technology, and programs and services on the senior housing side,” she says. “But during the day we’re getting a lot of calls from these companies while we’re trying to run a business. What I appreciate about Senior Living SMART is that they’ve been in our business and understand it.”

Ten years ago, independent operators didn’t face as many challenges, suggests Catizone. But changing regulations, customer demands and technology have created a more complex environment fraught with distractions.

“Over the last five to 10 years, the industry has become more reactive than proactive, and the focus has been to just get through the day because operators are stretched thin,” says Catizone, previously an executive with Benchmark Assisted Living (now Benchmark Senior Living). 

“But there are a lot of great resources and tools out there that can sort through the noise and help operators with regulatory compliance, consumer demands and risk management,” adds Catizone. 

Demand expansion

When Howard and Catizone first started Senior Living SMART, they initially sought to cut costs and create efficiencies related to everyday operations, such as reducing turnover or controlling costs. From her time spent at national and regional operators, for example, Howard discovered that independent operators were often paying four to five times more for lead generations than big companies. 

The partners quickly ramped up the part of the business that addresses those challenges. Operators that use the firm’s printing service for marketing materials in some cases can cut their costs in half, while those that employ systems to analyze energy, telecommunications and other expense categories can wring out savings of up to 27 percent, Howard says.

But some operators began seeking recommendations for management companies, real estate appraisers or solutions to other, more sophisticated operating facets, she says. Thus, while Senior Living SMART has laid out a detailed business plan, the founders know that they have to remain nimble enough to tackle problems that the partners didn’t anticipate. 

Case in point: Operators have lamented their inability to provide the families of potential residents with a full scope of funding sources that could help defray move-in expenses or other costs. In some cases, operators are simply uncomfortable bringing up the subject, Catizone explains. 

As a result, Senior Living SMART plans to launch a financial help desk, which will allow communities to provide families with the information. “That just bubbled up as a need,” says Catizone. 

Senior Living SMART also has attracted the attention of real estate investment trusts and equity capital providers that partner with smaller independent operators. Austin, Texas-based Virtus Real Estate Capital, a private equity firm that invests alternative real estate, owns 19 seniors housing properties and recommends that its operating partners use Senior Living SMART to address various operating issues.

In particular, Aaron D’Costa, director of acquisitions for Virtus, highlights a Senior Living SMART partner that audits food vendors, among other services. The company, One Management Solution, compares invoices with shipping orders and contracts to make sure that customers are receiving what they’ve asked for and aren’t overpaying. 

One Management initially focused on restaurants, and over time it saved clients 10 to 15 percent in food costs. One Management has shown that it can provide the same savings to seniors housing communities, says D’Costa. One Management also pockets a percentage of the savings for its fee, so the service is essentially free to operators.

“That service alone is something that’s new to the industry,” says D’Costa, who has known Howard for years and is on Senior Living SMART’s advisory committee. “It’s not something from an operational perspective that an operator has time to focus on.”

For founders Howard and Catizone, Senior Living SMART’s early success stories and growing membership confirm that they’re on the right track to potentially help thousands of independent operators solve problems. 

Yet getting the word out to seniors housing communities poses the biggest challenge to the start-up. Paradoxically, operators are spending a lot of time trying to resolve the very same issues that Senior Living SMART is in business to solve.

“It’s hard to get their attention,” says Howard. “Operators are so busy that it’s hard for them to get their head up long enough to realize that there’s help out there. They don’t have to be so busy. We can get a lot of things off their plates.”

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