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There are dozens of statistics on healthcare turnover. Regardless of which figure one cites, they all point to the fact that adequate staffing is a serious issue affecting providers everywhere. It is not going to be getting any easier in the foreseeable future. 

According to HealthStream, Healthcare workforce turnover has a negative impact on labor costs, such as recruiting, lost productivity, and training. When a high-performing member of a team leaves, the cost is even greater. The individual’s knowledge and experience leave too, along with his or her positive impact on team members, patients, and the organization.  

Work unit cohesiveness is disrupted or declines while the burden to maintain performance standards increases for remaining staff, adding to already high stress levels. 

If not proactively addressed, the chronic loss of good employees will eventually lead to deterioration in workforce satisfaction and patient care, along with the healthcare provider's ability to meet new demands and challenges. Consequently, developing a proactive strategy to retain quality healthcare workers is critically important to any healthcare provider’s future health and effectiveness.

There are a number of important elements to consider for a good retention strategy -- this article does not attempt to explore them all. Instead, it focuses on what your organization can do to be proactive and stay ahead of the curve so your best employees stay your best employees -- and don’t become someone else’s.

What Is a High Performer?

The term “high performer” is used quite frequently, but what does it really mean to a healthcare provider and its patients? A high performer pairs a high level of compassion with clinical excellence to serve patients. Such individuals possess important characteristics, including confidence, patient focus, and learning agility.

When engaged, high performers can have a strong emotional bond with your organization, taking personal ownership of its mission, vision, and values. These individuals are more likely to go the extra mile to do something good for your organization that is not expected of them. 

They are also more likely to contribute ideas for improvement and assist team members without being asked. Given the right opportunities for growth, these employees can become organizational catalysts -- inspiring and influencing others to become top performers and make a real difference in your organization.

Retention Starts at Recruitment

So how does a healthcare provider keep its best employees? It starts by getting them in the first place. A good and retainable candidate has the right skills, job, and culture fit for your organization from the beginning. The practice of hiring candidates we know little about and then trying to align them with organizational requirements can actually undermine a retention strategy and fuel turnover.

Hiring the best employees for your organization requires the use of screening tools in the selection process that assess individual skills and behavioral qualities against your standards and requirements.  

This provides a greater understanding of an individual beyond what’s provided on a résumé. As Dr. Karlene Kerfoot said in a recent article in Becker’s Hospital Review, “You have to have data...the biggest nurse staffing mistake that hospitals are making -- not having and using data to drive decisions.” 

A healthcare provider can never achieve a high-performing culture with an unhealthy percentage of misaligned and misfit employees. Data-driven hiring helps organizations find the best employees up front, improving their good-to-poor hire ratios and strengthening their culture with high performers who can influence and inspire marginal and disconnected healthcare workers to do better.

This article was drafted by HealthStream.

The premise is simple: Through good governance, the board of directors of a senior living community can help sustain the long-term success of the community and the residents it serves.

In her August 8, 2015 LeadingAge article, Balancing the Not-for-Profit Difference with For-Profit Smarts, Robyn Stone, executive director of the LeadingAge Center for Applied Research, suggests we support our mission-mindedness with a for-profit approach of smart business practices and strategic thinking. After all, a healthy bottom line is needed to continue doing good.

While there is no one “right” governance structure that works well for every organization, well-functioning boards appear to share common practices, interests and approaches.

To explore the tenets of good governance among today’s not-for-profit boards, LCS surveyed executive directors from its senior living communities across the country. Key findings from the 44 communities that responded to the survey have been extracted to create an insightful report. Following are highlights of those responses and some suggested best practices. 

Regarding the primary areas of responsibility for boards, survey respondents cited seven key areas of focus. Of those seven, financial oversight and strategic planning are their top two critical areas.

Boards noted numerous governance issues. Fortunately, these issues often may be resolved with effective training, orientation and education. The top two issues cited were scope of responsibilities and level of involvement.

Ongoing discussions about governing responsibilities help clarify and reinforce the specific roles and responsibilities of board members and the collective boards. When weighing “good governance” against “over involvement,” board members can use delineation tools to identify the party responsible for a particular action.

Other considerations noted in the good board governance survey include making self-evaluation a priority, board makeup, membership terms, board member education, board communications, and interactions with the foundation board as well as with residents. In addition, the framework of meetings, including the frequency of board meetings and attendance policy, are important topics.

The survey findings show most boards determine priorities and accomplish their responsibilities through a committee structure. The collective work of the board is divided among the committees, and they perform the careful, thoughtful work that enables boards to make informed decisions at their regular meetings.

While there are eight common committees, the finance committee is the resource most often used by boards. A best practice is creating as many committees as needed to accomplish the board’s work; typically four to six.

As Dr. Stone noted, there are challenges and changes ahead. Now is the time for our organizations to exercise good governance practices to ensure a healthy future. 

 

The news is consistently filled with hacking stories and stories about security breaches that implicate large retailers, medical systems, and even our governments. 

According to CliftonLarsonAllen, organizations of all kinds are immersed in daily battles to keep information away from criminals. All organizations need to protect the sensitive information that flows through their systems electronically or once it is printed. 

Health care organizations and their business associates retain  separate types of confidential information: 

  • Patient health information (PHI).
  • Personally identifiable information (PII). 

Management is obligated to secure patient and employee data according to Section 13402(h)(2) Public Law 111-5.

Carelessness Case Studies

When does printed medical and identifying information create a risk for a health care organization? The following stories illustrate situations that increase the risk of identity theft for patients and regulatory fines for health care organizations.

A medical clinic recently upgraded its information system and, as part of the upgrade, now has a fully integrated billing system. Even though it receives payment information electronically, staff print remittance information on a daily basis. 

After verifying the payment information is recorded accurately, they discard the printed remittances in unsecured paper boxes under their desks. Whenever the boxes get full, the clinic puts the papers in the secure scan box.

How many clients could have their identities stolen if the documents were inadvertently put in the trash versus the shred box? What sort of compliance penalties might the organization face?

In a similar case of carelessness, the consequences were not theoretical. In one real case, when a physician retired from practice, the entity that purchased the practice transitioned the patients’ care and medical charts to new providers. As part of the process, the entity had medical charts boxed up and left in the driveway of the retired provider’s home. 

The physician filed a complaint, and the Office for Civil Rights (OCR) determined that “…records being discarded or transferred in a manner (such as this) puts patient information at risk” and settled the case with the entity for $800,000.

Proper Precautions

Organizations with sensitive data may follow some simple steps when disposing of medical and patient information:

Step 1

Define the type of PHI and PII that flows through your organization. Remember to account for prescription labels and bottles with prescription labels, hospital identification bracelets, thumb drives, copier hard drives, and unsecured paper “shred boxes.”

Step 2

Create and follow disposal procedures for PHI or PII, including:

  • Securing paper documents containing PHI or PII that could be seen by the public by placing them in lockable cabinets.
  • Shredding, burning, or pulping documents to render them “unreadable, and indecipherable.”
  • Encrypting all transmissions of electronic PII or PHI.
  • Destroying electronic data.

Step 3

Train your employees about the components of PHI and PII that require more care in the disposal or disclosure process (social security numbers, driver’s license numbers, payment card information, and diagnosis). Training should help address the following issues:

  • Employees and contracted employees must understand the consequences of the inappropriate disposal of PHI and PII to patients, employees, and the organization.
  • Anyone involved in the disposal of data should know the organization’s step-by-step process for paper and electronic media disposal.
  • Everyone should be able to identify an unintended or unauthorized disposal (e.g., shred boxes in an unsecure bin) and know immediately whom to contact about the situation.

SKARE

SKARE your employees. We developed the following mnemonic device to help health care clients remember the elements necessary to secure PHI and PII.

  • Secure documents or electronic media out of sight.
  • Keep documents that contain PII or PHI in-house.
  • Assess and re-assess the disposal vulnerabilities within your organization.
  • Render items thrown in the trash unreadable.
  • Encrypt electronic data that contains PII or PHI.

Taking steps to ensure that everyone in the organization understands the sensitivity of disposal can reduce the risk of disclosure.  

This article was written by Juli Ochs and is used here with permission.

The Neo-Gothic building on N. Broadway across from the Milwaukee School of Engineering was a hub of activity for the city that existed a century ago. Built in 1891, its first life was as the German-English Academy at a time when Milwaukee was known as the "most German city in America."


Several generations later, the former language academy is evolving into a different kind of learning center — a place that will help build Milwaukee's 21st-century innovation economy.


Expanding this summer into the second of the historic building's 5 floors is Direct Supply, the Milwaukee-based company that provides "senior living" services, equipment, software systems, building expertise and more to about 36,000 communities across the United States.


It's not a production facility in the classic sense, but a combined innovation center and accelerator that will incubate some of the best ideas coming from inside Direct Supply as well as ideas from young companies outside the firm.


With plans to accommodate about 250 employees and entrepreneurs within six years, the Direct Supply innovation center is the latest effort to build upon a natural cluster in Milwaukee: expertise in serving the needs of seniors and the providers who care for them once they move into assisted living centers or skilled-care facilities.


You've heard of Milwaukee's emerging water cluster and its power, energy and controls cluster. Welcome to the "senior living" cluster.


"We're very much committed to doing whatever we can to attract and create innovation in Milwaukee and the state of Wisconsin," said Tom Paprocki, director of development and innovation for Direct Supply. "We see our work here (in the innovation center) as contributing to that in many ways over time."


The building was nearing the end of its physical use when MSOE, which owns the property at 1020 N. Broadway, entered into a partnership with Direct Supply for its renovation. It's a 2-way street because Direct Supply has access to MSOE interns and graduates, and MSOE has a proven landing spot for some of its graduates.


"It was a question of how do we attract the best and brightest," said Bill Avery, Direct Supply's executive vice president and leader of its technology services. "We felt a downtown location was the right fit for corporate culture reasons as well as a way for us to better contribute to the innovation economy here in Milwaukee."


Not only is the Direct Supply location in the old academy a stone's throw away from MSOE, it is close to other sources of talent at the University of Wisconsin-Milwaukee, Marquette University and the Milwaukee Institute of Art & Design.


About 80 people work on Direct Supply's renovated first floor and construction on a second floor is well underway. That's where the company will operate a "customer experience lab" and suites for in-house innovation as well as start-up suites for companies outside Direct Supply.


The idea is to create an environment in which companies working on some aspect of "senior living" innovation can work independently and collaboratively, depending on the need. It also brings software engineers and technicians from Direct Supply's main campus into a setting where they work as a team on solving customer problems.


The timing is right, say members of Direct Supply's innovation team, because the U.S. is facing unique demographic challenges and health care is rapidly changing -- not just in hospitals and clinics, but within senior living settings.


Layer on the changes precipitated by the federal Affordable Care Act, also known as Obamacare, and the need to address questions of quality, safety, price and delivery is urgent.


"It's a great opportunity to solve problems that affect millions of people," Avery said.


If the plans unfold as scheduled, the Direct Supply innovation center will join a small club of accelerators in the senior living industry. Those include Aging 2.0 in San Francisco and Innovate LTC in Louisville, Ky., with Aging 2.0 focusing more on the consumer side. Aging 2.0 is tied to Formation Capital, a $6 billion private equity firm focused on senior housing and care and related real estate investments.


Direct Supply does not operate an early stage fund and has no plans to do so, but members of its innovation team hope to connect young companies to investors with which they have existing relationships. More important, Direct Supply hopes to help young companies by making space, technology and a talent-rich environment available.


"The innovation economy is still early in its maturity (in Milwaukee), and we want to be a part of contributing to that revitalization," Avery said.


What better location than a building that was a symbol of the city's past — and which is poised to become a part of its future.


Tom Still is president of the Wisconsin Technology Council. Its Wisconsin Innovation Network meets in Wauwatosa. Contact him at news@wisconsintechnologycouncil.com.


This article originally appeared in the Milwaukee Wisconsin Journal Sentinel.

As the old adage goes, “Real Estate is a great investment, because they’re not making any more of it.” Truer words have never been spoken.

In these days of extreme activity in construction and development, it can be easy to lose sight of a few of the core principles of sound development. According to Greystone, a lot of today’s campus work is focused on expanding new revenue-producing units and associated services, as well as repositioning existing assets to improve operations and service delivery, and recalibrating unit mixes by service levels or within service levels.

One of the easiest routes to expanding, of course, is to overtake that large, undeveloped parcel on your campus. You could also secure adjacent property, if available. With each exciting path to new construction, however, come very serious, long-term considerations.

It’s very critical, before initiating a new development project, to pause and reflect on your long-term strategy. You should have a well thought-out roadmap, or at the very least, a business plan that takes you from your current situation into the next several years of evolution of your campus.

With a plan, you can be far more confident in your short- and long-term moves. With any plan you create, you will want to maximize the density of your new construction. This means building as small a footprint, with as many allowable stories, to which you are entitled by local zoning and development codes. 

You will have to ask many questions of your project. What can I afford? What other expansion needs should I incorporate at this time? What will my next step, then the next, be?

As easy and tempting as it may be, plan your new addition in such a way that allows you a zone for future growth. Perhaps you know exactly what that expansion might be, or perhaps it will be dictated by your future market. In either case, leaving a ‘future build zone’ on your campus will serve you well.

You should also give thought to where you will best be served in conserving expansion property on your site. While this might be more of a dice-rolling proposition, there are questions you can consider. What will my next two or three moves look like? What will my next best revenue enhancement be? What services will I need to stay atop my market?

Flexibility will always be your key driver in this instance. For example, you may have to decide whether to build adjacent to your IL cottages, or next to your health center. 

Your obvious first consideration is who you will be serving. In addition, which of your various business centers will you want to grow next -- cottages, IL apartments, memory support or another health center related business? 

Finally, with the placement of your expansion, have you given yourself the widest range of options to further expand your future services?

Driving density in your planning is always a positive step. Now, get out there and grow your business!

This article was written by Burt Derr, first vice president of development services for Greystone, and is used here with permission.

While it’s something no one likes to think about, there’s always the possibility that senior living communities could experience the unthinkable: earthquakes, fires, massive flooding, tornadoes, etc. 

And if that ever does happen, how do you plan to communicate with the public? Most likely, the first place people will look for information is on your community’s website.

In times of major crisis, your website is the perfect vehicle to get your messages out there. Having the capability to communicate quickly often helps calm fears, get the story accurate, and hopefully let the public know about your immediate situation.

The Dark Page

That’s why GlynnDevins encourages having a “dark page” capability on your website. It’s a page that’s only activated when absolutely necessary with clear and concise messaging.

For example: Your community experiences a major fire, and residents have been safely evacuated and relocated to a safe location. Imagine a family member living in another town wants to find out what’s going on but can’t get through on the phone. 

If the dark page is activated, the message on your website would pop up that could state the following:

Residents Are Safe and Sound

This afternoon the west wing of our community caught fire, and we were fortunately able to evacuate all our residents without any injuries. Unfortunately, several of the residences were heavily damaged and, as a result, no one is able to return to their apartments until further notice from fire officials. 

We are able to report all residents are safe and sound, and we are in the process of working with another community in the area to help with temporary housing. Fire investigators say it will be several days before an exact cause of the fire is known. We will continue to provide updates here as warranted.

A dark page on your website allows this type of messaging and gives you control of what to say. If you haven’t added this capability on your site, it is something you should strongly consider. Accurate information is powerful in times of a crisis.

This article was written by Randy Eilts, vice president of public relations for GlynnDevins, and is used here with permission.

Background


Kendal at Granville was established in 1999 to develop a senior living community in the Township of Granville, Ohio, a suburb of Columbus. Opened in April 2005 and located on 94 acres, the community currently includes 135 independent living apartments, cottages and villas, 19 assisted living suites and 32 private skilled nursing rooms. 


Sims provided a portion of the initial seed capital and secured the construction financing for the first and second phases. Kendal at Granville has a strong affiliation with Denison University, also located in Granville. 


Kendal at Granville is an affiliate of the Kendal Corporation, a Quaker organization considered nationally as a pioneer in the field of aging services. The Kendal Corporation’s affiliates own and operate 12 communities in Massachusetts, Pennsylvania, New York, New Hampshire, Ohio, Illinois, Maryland and Virginia. 


In 2011, Kendal at Granville refinanced its existing debt and secured a construction loan for funding of Phase II. At the time of the 2015 refinancing, approximately $35.5 million in debt was outstanding. 


Challenge 


Given changes in the relationship with the two existing bank lenders stemming from occupancy challenges related to a slower than anticipated fill of Phase II units and higher turnover in Phase I units, Kendal at Granville decided to proceed with a take out of its existing debt with fixed-rate bonds and engaged HJ Sims as underwriter. 


The refinancing, which was formally approved by the Board in March, would need to be completed prior to the end of May in order to avoid financial penalties imposed by the banks. In addition, Kendal at Granville would need to cancel each of the outstanding swaps at closing and would incur termination penalties. 


Although the bond market was strong when the refinancing commenced in March, volatility increased significantly in the weeks that followed, and the bond funds began experiencing outflows in the weeks leading up to pricing. 


Given the already material increase in cost of capital stemming from moving to fixed rate from an adjustable bank rate, it was critical to secure yields at or below what had been assumed in the feasibility study. 


Execution 


With Kendal at Granville’s Phase II independent living expansion still stabilizing, Sims structured a $3.66 million short-term tranche of bonds which would be redeemed by future entrance fees or other cash flow. This will enable Kendal at Granville to deleverage and improve debt service coverage. 


Ultimately, Sims and the working group completed the financing in less than three months from engagement to closing. At the time of pricing, Sims leveraged its extensive retail distribution network to sell 16.5% of the bonds to its private clients. 


In addition, Sims was able to add additional term bonds with shorter maturities, which drove down the blended interest rate on the issue. 


Results 


The Series 2015 bond issue closed on May 29, 2015 with a true interest cost of 6.21% through the bonds’ maturity of July 1, 2050. Specific benefits of the refinancing include: 


 


  • Removal of Interest Rate Risk – By securing a fixed rate to maturity, Kendal at Granville’s debt will not be subject to interest rate movement as it previously was. 

     

  • Elimination of Bank Reset Risk – Kendal at Granville is no longer exposed to uncertainty of the banks’ future credit appetite. 

     

  • Release of Reserves – Over $2 million was released by the banks and returned to Kendal at Granville at closing. 

     

  • Added Flexibility – The fixed rate issue eliminates a number of covenants previously imposed by the banks and gives Kendal at Granville long term flexibility. 

 


For more information, please contact Aaron Rulnick at arulnick@hjsims.com or 301-424-9135 or Kerry Moynihan at kmoynihan@hjsims.com or 845-591-9383. 

The Unite States Supreme Court recently held in Obergefell vs. Hodges that same-sex couples have a fundamental right to marry in all 50 states.

Beyond the legal, social, and political implications of this decision, senior living providers will need to analyze how this decision affects their operations as well as their employee benefit plans. The implications of this decision will extend to many areas, including retirement planning, Medicare benefits, Social Security benefits and tax filing, as well as issues of First Amendment rights for religiously-affiliated organizations.

It's important to keep up with the latest guidance from federal and state agencies to help navigate the changing landscape. We will keep members informed of any future developments. 

 

 

LeadingAge, along with nearly 250,000 other individuals, businesses and associations, has submitted comments on a proposed rule issued by the U.S. Department of Labor that would increase the salary threshold for claiming exemption from overtime requirements for executive, administrative, professional, outside sales and computer employees (“white-collar” employees) from the current level of $455 per week ($23,660 annually) to $970 per week ($50,440 annually).

If the proposed rule is finalized, employees who meet all other requirements to qualify for the exemption but whose salary falls below the new threshold would be considered non-exempt and thus would be entitled to overtime at time-and-a-half for all hours worked in excess of 40 hours per week.

Additionally, the rule would institute annual adjustments of the salary threshold. 

The Financial Accounting Standards Board (FASB) released its long-awaited proposed accounting standards update for nonprofit organizations. 

The document includes numerous changes that will profoundly impact the way these entities present their financial statements. The exposure draft is open for public comment until August 20, 2015.

The announcement is the latest step in a process started more than three years ago when FASB set out to improve financial reporting in the nonprofit sector. The proposed changes will impact financial statements and some note disclosures. 

What the new standard means to you

Preparers of financial statements are urged to be proactive in reviewing and understanding the proposed guidance. Included in the proposed standard are sample financial statements using the new reporting structure. You can use these examples, when appropriate, to identify the impact on your organization. 

By reviewing the proposed standards and utilizing the examples, you will have the opportunity to communicate any suggestions or negative impacts of the proposed standard to FASB.

If the standard is approved, early communication to the users of your financial statements is also a key to successful implementation. Consider formal training for certain financial statement users, such as your board of directors, to explain the impact of the new reporting structure.

Specific areas of interest

New net asset classifications

For organizations that receive contributions or grants with donor-imposed restrictions, the three current net asset classifications would be collapsed into two. Unrestricted net assets would become net assets without donor restrictions; temporarily and permanently restricted net assets would collectively become net assets with donor restrictions.

Direct versus indirect cash flow reporting

Nonprofits will now be required to follow the direct method when preparing the statement of cash flows. While some have elected to do this presentation in the past, it is uncommon. 

Presentation as operating, investing, and financing will also change for certain activities related to long-lived assets, borrowings, and interest and dividends on investments.

Additional reporting measures in the statement of activities

Exempt organizations can expect to report two new subtotals in the statement of activities in the net assets without donor restrictions category. 

The first is a subtotal of operating revenues, support, and expenses (before “transfers” and excluding resources received with donor-imposed restrictions); the second is a subtotal after “transfers” resulting from board designations or other self-imposed limits.

While these additional subtotals are not expected to significantly affect financial reporting, the provision has garnered attention surrounding the reporting of transfers and whether it will actually reduce complexity for financial statement users.

Underwater endowments

Underwater endowments are those permanent gifts having a current market value that is less than the historic or original gift amount. Under the new guidance, underwater endowments will be classified in net assets with donor restrictions instead of the current classification in unrestricted net assets. Expanded notes will also be required to disclose amounts underwater and to present plans for reducing or not spending from these funds.

Enhanced note disclosures

Existing standards require all organizations to report expenses by function (program services and supporting activities) on either the face of the statement of activities or in the notes. 

Expenses by natural expense classification (salary, occupancy, professional fees, depreciation) is currently allowed but not required. Under the proposed standard, organizations will now be required to disclose expenses by both function and natural classification. 

This can be accomplished through either a statement of functional expenses or disclosure in the notes.

As previously noted, donor restrictions will not distinguish between temporary and perpetual restrictions on the statement of financial position and statement of activities; however, the footnotes will continue to include enough information for the user to understand the timing and nature of the restrictions on net assets.

Reporting investment returns

Organizations will be required to report investment income after deducting external and direct internal investment expenses. Given the varying size and complexity of investment portfolios this information has been inconsistently tracked among some nonprofit organizations. This change will provide a more comparable measure of overall investment return among peers.

How we can help

CliftonLarsonAllen’s nonprofit professionals will continue to follow these developments, and provide additional guidance as it becomes available. We can help you understand how these reporting changes will impact your organization.

This article was written by Laura Vansuch, senior manager of nonprofits at CliftonLarsonAllen, and is used here with permission.

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