Speaking at the LeadingAge Expo in Atlanta this week, the leaders of two nonprofit senior care organizations called COVID-19 the biggest catalyst for change in decades. They urged firms to use this time and expand their businesses in new ways.
Dan Savitt, president and CEO of the Visiting Nurse Association of New York, recommended pursuing joint ventures with hospitals, minority strategic investments and co-opportunities with private equity firms as a way to attract capital for growth, while still remaining independent.
“It can really help to expand your name. If you do it right and maintain half ownership, you can really accelerate growth,” Savitt said. “If you’ve got a new product idea and you can’t manage the program, this can be a really good idea.”
Home care, home health and hospice agencies have been hot takeover targets by private equity firms. Private equity accounted for 57% of the 44 merger and acquisition deals in the most recent quarter, according to the M&A advisory firm Mertz Taggart. Some care providers overwhelmed by staff shortages, burnout and increased costs due to the pandemic are selling, rather than staying in, business.
Teaming up with nonprofits
Still, some nonprofits are finding creative ways to maintain their businesses by banding together with other nonprofits. That’s the strategy Jennings, an Ohio-based Catholic senior care nonprofit, is pursuing. Jennings operates skilled nursing facilities, assisted living facilities and affordable senior housing in northeastern Ohio. It also offers home care and hospice services.
Jennings President and CEO Allison Salopeck said her nonprofit launched a hospice a few years ago with three other nonprofit organizations. More recently, Jennings teamed up with a larger agency to provide home care services to its assisted living residents after Jennings suspended its own home care services during the pandemic.
“They took over a couple of the staff members that we had,” Salopeck said. “When they provide home care on our campuses now, they do it under Jennings Home Care. Our residents still feel that it is Jennings quality and Jennings is a part of it.”
Updated existing business lines
Salopeck said the pandemic has proven that some business lines need to be rethought altogether. For instance, Jennings may retool its adult day care program, following a drop-off in census dropped during the pandemic.
“Maybe we’re not an adult day center that just provides personal care. There are elders in the community that are very isolated and maybe what they need is a more social environment. Maybe they come to us for exercise and to meet with friends,” Salopeck explained.
Both Salopeck and Savitt predict technology will also play a larger role in helping agencies provide new services to clients without the need for more staff.
