Management at a large, Midwest-headquartered senior living community asked Baker Tilly to assist with an assessment of their current operations, primarily with respect to operating costs. The senior living provider was looking to improve its operating performance, both quantitatively and qualitatively.
Every Baker Tilly operational assessment is highly customized to an organization. After obtaining an understanding of an organization’s needs and objectives, Baker Tilly creates a tailored approach and assembles a specific team of professionals with experience to the operational areas being analyzed (e.g., clinical, dietary, information technology, human resources, etc.).
In this specific case, our analysis started by obtaining an overall assessment of the organization’s financial health and measuring the general efficiency of its operations (i.e., potential opportunity for improved financial performance). To do this, Baker Tilly generated calculated various profitability, liquidity, and capital structure ratios utilizing prior years audited financial statements and current year internal financial statements. We also compared margins by level of care to best practice margins in the industry.
Once that initial process was completed, the next step in the process was to identify specific areas that represented opportunities for financial or process improvement. To do this, Baker Tilly obtained and analyzed more detailed data and information from management regarding financial and operating results and processes. We completed on-site visits and interviews of selected personnel to obtain additional information about departmental cost structures and operations, as well as the organization’s overall operating philosophy. Further, this process helped us to understand internal processes that have an impact on operating performance.
At the conclusion of our work, we identified approximately $1,400,000 in cost savings opportunities across the organization. Further, we identified numerous qualitative recommendations that may not have an immediate impact on operating results, but will increase efficiency in various areas; our focus for the operational assessment was just as much qualitative as it was quantitative. In our team’s opinion, the implementation of our recommendations will have no impact on the quality of care and services provided to residents; we believe the implementation of our recommendations will actually enhance the quality of care and services provided to residents.
For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.