In 1991, California CCRC Morningside of Fullerton was struggling with massive operating losses and very low occupancy. Today, it’s a crown jewel in Life Care Services’ portfolio.
This vast turnaround is partly the work of Continuing Life, a services and advisory company that works closely with Life Care Services. The company was created in 2013 with a goal of strengthening operations and improving new community openings.
Just six years later, it would appear as though Carlsbad, California-based Continuing Life has done what it set out to achieve. The company collaborates with Des Moines, Iowa-based Life Care Services on the management of five large continuing care retirement communities (CCRCs) in the Golden State, with another slated to open soon in San Diego.
The two companies’ arrangement is unique, with Continuing Life handling back-office services like pre-marketing, payroll and human resources, and Life Care Services handling the day-to-day management of the communities.
No doubt, adding in an extra layer of oversight and management is more complex than is typical when senior living owners bring on a third-party operating company. But doing it this way has helped the company improve what was once a challenging opening and lease-up process, according to managing partner Warren Spieker.
“Opening these big CCRCs is frankly just hard, and I would tell you we didn’t do a very good job at it [before 2013],” Spieker told Senior Housing News. “So, this was about how we can … do a better job of opening communities where we’re moving hundreds of people in over a relatively short period of time.”
The arrangement is unlike most others for Life Care Services, which has worked with Continuing Life in one form or another since the early ‘90s. But it’s worked well, and the two companies are able to play off each others’ strengths and weaknesses, according to Tim Cain, vice president and director of operations management at Life Care Services.
“It is different than our management agreements that we typically have,” Cain told SHN. “But between the two companies, we’re able to bring expertise that we both have … and together those synergies create a positive difference.”
‘It almost sank them’
The challenges began with the opening of Morningside of Fullerton, a CCRC that some of the owners behind Continuing Life founded in Fullerton, California, in 1991.
“The owners thought, like many people do, that this was an interesting real estate deal,” Spieker said. “And they learned very quickly, like many people do, that these communities are not just real estate deals.”
The community opened at the height of a recession in California, and struggled with occupancy from the get-go. It wasn’t until four years later in 1995 that the community regained its footing and completed its final phase.
“It almost sank them,” Spieker said. “When they figured out they weren’t going to go bankrupt, they looked around and said, we learned a lot about this.”
The challenges of opening large CCRCs continued with additional community openings in 2002 and 2007. Then in 2013, on the heels of yet another difficult CCRC start-up, the ownership group restructured, and in the process created the separate entity known as Continuing Life.
The overall goal was to create a “common language” of best practices that the communities and their various owners could align themselves behind. That process resulted in a list of core values known as STAR, which loosely stands for service, teamwork, aiming for excellence, and doing the right thing.
“That really was a turning point for the enterprise,” Spieker said. “And from that spun off a whole host of other things … including, how do we do better in growing and promoting from within? How do we do a better job when opening a new community?”
The company’s most recent opening — the 480-apartment Reata Glen community in Ladera Ranch, California — exemplifies just how far it’s come.
In opening Reata Glen, Continuing Life worked directly with each of the community’s leaders for many months, and in some cases over a year, to help prepare them and their departments. That community moved in 191 units during its initial 90-day move-in window, with initial satisfaction surveys that were the company’s highest-ever, according to Spieker.
“The Continuing Life leadership team generally has day-to-day interaction with the department leaders,” he explained. “Contrast this to the past, where a new department leader who was hired from the outside received, at best, a week or two shadowing of another community counterpart and then was left on their own to start-up and manage their department.”
Spieker added: “Effectively, they got to step on the shoulders of giants to get a head start, pre-opening and during opening.”
It’s not just Reata Glen, either. At the other four CCRCs Continuing Life touches, occupancies are over 98%. The communities are also all financially strong, with no debt and “solid financial reserves,” he said.
And Morningside, the community that almost fell apart in the early ‘90s, is now the top community, from a ratings standpoint, in Life Care Services’ portfolio of 128 locations.
The community took the top spot in Life Care Services’ annual “BEST” competition by receiving a perfect score across ten performance indicators, including finance, occupancy, health care quality, employee engagement, turnover and safety, resident satisfaction and resource utilization.
Building a winning deck
Another goal that Continuing Life set in 2013 was to hire 30% to 50% of the management team at Reata Glen “from within,” meaning they’re employees from other communities that the company touches.
Not only did the company meet that goal, it exceeded it. Of the 12-person team that leads the community, eight were promotions or transfers from other Continuing Life-supported properties, including the executive director and assistant executive director, food and beverage director, marketing director and resident services director.
Behind that hiring and promoting success is a program called Talent Development Review (TDR), where Continuing Life creates employee “career cards” to identify workers that show promise and desire for upward momentum.
The card also has information regarding an employee’s past job history, level of education, certificates or licenses they have and the successes they’ve earned along the way. The card also evaluates a handful of key metrics that include servant leadership, communication skills and organization.
“The COO, the director of operations and I go to every location, and we meet with the executive director and the administrator and review all of these career cards,” Spieker said. “This whole process is about fostering opportunities for growing these people’s careers.”
All employees, including those who are satisfied in their jobs, have opportunities to develop their skills through Continuing Life’s internal “STAR University” and tuition reimbursement of up to $1,500 per year.
There are signs that Continuing Life’s commitment to employee development is also paying off. The company recently took the no. 16 spot on the annual Best Workplaces in Aging Services list.
“I’m more optimistic about the future than I am giving us a pat on the back for the past,” Spieker said. “I see so many areas where we can go.”