Skilled nursing acquisitions always produce a lot of chaos and add plenty of variables – technological, staff-wise, operational and sometimes emotional – for the facility team post-acquisition. Finding the right facility leaders, and weeding out those that no longer fit in with quality care and growth, is a make or break task for any transition team.
And often, updating technology can be a huge hidden expense. EHR and wireless systems need to be swapped out upon transition – this can be hugely disruptive, but necessary. Buyer and lender must be in agreement that such investments are needed, along with AI investments too.
However, for Matt Strange, COO of Procare HR, a successful post-acquisition transition depends on identifying the nursing home’s “informal leaders,” those who may not appear on the organizational chart but undoubtedly run the community.
“Oftentimes that’s a very senior [certified nurse aide] CNA,” said Strange. “You’ll also find who the actual leaders are – the leaders busy selling you on why you should keep them versus the leaders those who are actually showing you why you should keep them.”
Strange recently held a discussion on post-acquisition integration with Renee Pruzansky, VP of strategy and business development for New York-based operator Infinite Care. Procare handles payroll, benefits and hiring tasks for nursing home operators at acquisition.
If a leader seems a little too eager to sell their importance, Strange advises questioning their motive. Usually, there’s some sort of incompetence they’re trying to cover for, he said. The ones to keep are usually too busy doing their job to seek out the transition team, but will still be helpful if asked, he noted.
“It’s a little bit like a mystery at the beginning, but sniffing out [the best leaders] will make the difference between this journey being a 90-day transition or a 9-month journey in facility transition,” said Strange.
In one post-acquisition, Strange recalled how the administrator had all the right answers, said all the right things to make the transition team think they had a great leader to work with. In the end, though, it turned out that this particular administrator had built a culture where “everyone feared her,” and the facility ended up losing the director of nursing (DON) who was the anchor holding everything together.
“What we had to do in that moment was to, first of all, call [the REIT], who we happened to be working with at the time,” said Strange. “That transparency was really important, to say, ‘This mistake hasn’t impacted anything yet, but we can feel something’s coming.’ Don’t ever forget that your capital partners, they work with a lot of other groups, and oftentimes they have an idea and a perspective you may not have thought of, and when you’re honest with them up front, they can give you a solution before you drive off the cliff.”
First impressions are everything
Overall, the transition team after an acquisition needs to show a friendly face, encourage collaboration and listen closely to the staff they have acquired when charting a path forward.
“The most important thing is to show up … resist the temptation to walk into the private dining room with your team, and close the door and build up your little battle room in there. What you’re doing in that moment is creating a separation between you and your team,” said Strange.
Instead, think of that first meeting following an acquisition as a first date, he said.
“You’re deciding, ‘Do we like each other? Do we not? Do we want to work together?’ While you may have purchased this community, you purchased the team and the residents and all the things with it, you have to make sure that everything you’re doing is about serving them,” said Strange.
Ask questions, but not like a surveyor, he said, and pay attention to what staff doesn’t point out.
As for existing relationships with community hospitals, Strange said the transition team needs to know what services a facility excels at, what they could do in the future, and what they’re not quite prepared for.
“Figure out what you’re accidentally doing well internally – that’s where the data comes in,” said Strange. “I’ve had a community that was phenomenal at wound care but they didn’t know it. They just happened to be really fantastic at it; they had an insane amount of wound care patients in this community because that’s what they were known for outside.”
Strange took that wound care speciality and mindfully grew census with that knowledge, connecting other services that made sense based on data.
And, facility staff needs to do two things simultaneously: have high quality care for existing census while also making space for more admissions. That means ensuring staff availability, services, infrastructure and technology are all in place to care for those extra people.
“Don’t forget that every single team member and resident in your community is a revenue driver,” said Strange. “They have families, they have friends that are in your community, and making sure they understand your vision and where you’re going is the best marketing you can do.”
Start small and invite collaboration
Infrastructure improvements in phases is another good tack, Strange said, taking the nurses station as an example. Replacing office chairs at the station is something that can happen instantly, and be followed by more in-depth renovations as time goes on.
“If people see on day one you did those little things, they’re going to know that something’s different,” said Strange. Staff likely are coming in both excited and scared, and are going to decide in those first 72 hours if the acquisition is something they’re on board with or not.
Pruzansky said the acquisition team needs to share the plan up front and collaborate with the existing care team to tweak things if needed.
“You’re only going to be as successful as this team is going to make you,” said Pruzansky.
Making decisions in a vacuum post acquisition has consequences, Strange added, citing one change his team made that ended up having a huge negative impact. The transition team changed the “care friend” position to CNA, without realizing the care friend role was coined by a beloved resident who had lived at the facility for 30 years.
“We came in with something that we decided on a spreadsheet and changed it, and we eroded culture,” said Strange.
All of these conversations go into “performance scorecards” that identify every area, every touchpoint color coded based on how much needs to change, she said. The acquisition team and existing staff work together on the “reds” first, then the “yellows” and so on. It sounds simple, but it’s a good way to organize and get everyone on the same page, she said.
What’s crucial here is not to demand performance, but tell them how they’re going to get there and how the transition team is going to help; give them a roadmap and prepare everyone on any roadblocks or detours along the way.
This strategy helps please lenders too, Pruzansky said.
“Lenders don’t want to only know that you have a strategy and a plan, they want to know how you’re going to execute it. Give system workflows that work, that performance scorecard progress,” said Pruzansky.
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