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HOT Properties

EXPERTS PREDICT ANOTHER FRENZIED ACQUISITIONS MARKET IN 2006

GROWTH STRATEGIES

How Midsize Companies Secure Capital Identifying Poor-Performing Communities

QUALITY RESIDENT SERVICES QUALITY RESIDENT SERVICES

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Hospitality, the Fine Hotel Way

THE BUSINESS MAGAZINE OF ALFA: THE ASSISTED LIVING FEDERATION OF AMERICA

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People. Strength. Commitment.

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© 2005 NAS

AssistedEXECUTIVE Living

ADVANCING EXCELLENCE IN A S S I S T E D L I V I N G O P E R AT I O N S & C A R E

Contents

FEATURES

12 COVER STORY Hot Properties 16 GROWTH STRATEGIES Cash for the Not-So-Big Guys

BY ADAM STONE While it can be harder for midsize companies to secure financing, numerous options are available--some easier to come by than others. Factors like personality and politics play into the mix as well.

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, VOL. 13, NO. 1

BY ANYA MARTIN After five years of slump, the acquisition market for assisted living was hot in 2004, and boiling over in 2005. Now experts say the market will remain steamy for the next year or two.

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19 GROWTH STRATEGIES Cleaning House BY ADAM HEAVENRICH

Getting rid of the under-performers in your portfolio can stop the drain on the bottom line and create a product you can replicate in other markets.

22 QUALITY RESIDENT SERVICES Four-Star Inspiration BY SUSAN FITZGERALD

Taking a cue from high-end hotels, assisted living communities are offering meals prepared by classically trained executive chefs, concierge services, and other luxury perks.

DEPARTMENTS

19 5 6 9 26 27 28 29 22

TOP OF MIND BY RICHARD P. GRIMES, ALFA President and CEO EXEC TO EXEC Insights on today's issues NEED TO KNOW Industry updates and ALFA news COMPLIANCE CORNER BY LORETTA G. LEBAR CONSUMER VOICE On aging and independence EXECUTIVE ROUNDTABLE BY SUSAN FITZGERALD RESOURCE LINK Classified ads

30 32 35 36

PEOPLE & PLACES Appointments and developments 2005 INDEX Article and member index AD & MEMBER INDEX Guide to advertisers in this issue PRODUCTS & RESOURCES Assisted living solutions

See page 32 for an index to all 2005 coverage in Assisted Living Executive

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Copyright, Assisted Living Federation of America

Executive Publisher Richard P. Grimes, ALFA President/CEO Publisher Debra J. Stratton Editor/Associate Publisher Angela Hickman Brady Associate Editor Marlene L. Hendrickson Contributing Writers Susan Fitzgerald, Anya Martin, Adam Stone Art Director Becky McClimans PUBLISHING OFFICES Stratton Publishing & Marketing Inc. 5285 Shawnee Road, Suite 510 Alexandria, VA 22312 703/914-9200; fax 703/914-6777 E-mail: [email protected] For circulation information, call 703/691-8100. A D V E RT I S I N G S A L E S T E A M Alison Bashian, [email protected] Marianne Juliana, [email protected] Stratton Publishing & Marketing Inc. 800/335-7500; fax 440/349-3447 Insights and critical review provided by the A L FA O P E R AT I O N A L E X C E L L E N C E A D V I S O RY PA N E L Michel Augsburger, President & CEO, Chancellor Health Care Inc. Cindy Chastulik, Divisional VP, Eastern Division, Alterra Healthcare Corp. Page Estes, VP of Operations, CaraVita Senior Care Management Services Inc. Jill Haselman, SVP, Organizational Development & Culture, Benchmark Assisted Living Justin Hutchens, SVP & COO, Summerville Senior Living Benjamin R. Johns, VP of Operations, Carriage Court Communities Susan Klein, SVP, Brandywine Senior Care Linda L. Martin, President & COO, Signature Senior Living Jack Peters, VP of Operations, Silverado Senior Living Marla Sovereign, VP of Assisted Living, American Retirement Corp. Daniel Schwartz, SVP of Operations, Sunrise Senior Living PUBLISHED BY THE ASSISTED LIVING FEDERATION OF AMERICA, ALEXANDRIA, VIRGINIA Assisted Living Executive (ISSN 1553-8281) is published monthly, with combined issues in January/ February, July/August, and November/ December, by the Assisted Living Federation of America, 1650 King Street, Suite 602, Alexandria, Virginia 22314. Circulated to ALFA members only; a portion of dues is for subscription. Periodicals postage paid at Fairfax, VA, and additional mailing offices. POSTMASTER: SEND ADDRESS CHANGES TO Assisted Living Executive, 1650 King Street, Suite 602, Alexandria, Virginia 22314; 703/894-1805. Printed in USA. Copyright 2006. Prior to photocopying items for educational classroom, internal, or personal use, please contact the Copyright Clearance Center, Customer Service, 978/750-8400, 222 Rosewood Dr., Danvers, MA 01923 or check CCC Online at www.copyright.com. Assisted Living Executive will not be responsible for the return of any unsolicited manuscripts or photographs.

ALFA PRESIDENT/CEO

TOP OF MIND

Assisted Living Image? Positive, Mostly

recently received a letter from assisted living professional Robert E.P. Elmer III of The Elms Retirement Residence Inc. in Westerly, Rhode Island. He pointed to the increasing misrepresentations of assisted living in the media--especially on primetime television. Among other examples, he cites a recent episode of "Boston Legal," where Candice Bergen's character says,"I don't like going into those assisted living places. They give me the creeps." On the television show "The Apprentice," a candidate's grandmother died in an assisted living community where staff had trouble with one of her "tubes." And in an episode of "Law and Order SVU," the executive director of an assisted living community was deliberately bringing her residents close to death so she could be the one to find them and be responsible for saving their lives. Says Elmer,"I would like to think that the public at large is able to separate fact from fiction, but I know better." Assisted living communities operated by ALFA members are professionally managed, warm, welcoming, and comfortable homes to thousands of seniors who need some assistance in daily living. And they bring peace of mind to the families of their loved ones--knowing that they are safe and secure under the thoughtful supervision and care of your staff. But, as Elmer suggests, each negative television program or movie and each negative article in the newspaper or on the nightly news serves to erode the very positive image assisted living currently enjoys in the minds of the public. Over time, a poor public image (perpetrated by the media) can eat away at public confidence, which in turn can lead to political opportunism, which in turn can produce onerous legislation and regulations ostensibly intended to "protect" our residents from the fictional depictions of assisted living in the media. "If it bleeds, it leads" is the infamous and cynical motto of many news directors. However, by selflessly trumpeting the truth about assisted living through your regular and ongoing outreach to the local media, you will occasionally get the attention you deserve. And when you Update Your PDA! do, you play a vital role in protecting and enhancing the ALFA Has Moved to public image of assisted living. At ALFA, we keep the national media informed about 1650 King Street, what you do. Between ALFA's efforts, the efforts of your ALFA State Affiliate, and your own efforts, we are helping Suite 602 a positive Alexandria, VA 22314 to maintain come. image in the minds of the public for years to Tell us about the positive and negative portrayals you Phone: 703/894-1805 see in local and national news, television, and movies. Fax: 703/894-1831 Write to [email protected]

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Serving professionally managed assisted living communities for seniors by: driving business excellence ensuring a more informed public and influencing public policy.

Richard P. Grimes ([email protected])

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EXEC TO EXEC

INSIGHTS ON TODAY'S ISSUES

What is your best strategy for raising staff morale?

Michelle Egerer, M.Ed. Senior Administrator, Silverado Senior Living-- Newport Mesa, Costa Mesa, CA Lori Loucks Executive Director, Summerville at Valley View, Garden Grove, CA Randall Ramroth Administrator, Extendicare-- Colonial Lodge Plano, Plano,TX

taff morale begins with leadership and begs the question, what is our own morale/emotional intelligence? Success in today's dynamic environment depends on motivated associates. Our foundation is strengthened by our ability to live and lead by our core values on a consistent and daily basis. Living our vision of `Giving Life' builds the morale of all by setting clear expectations and achievable goals, and creating an environment that celebrates successes. We lead from our hearts and communicate the culture through our actions. Our culture and team-building is centered on our core values, which include recognizing and building the human spirit in all that we do and retaining and building family unity through understanding and positive action. Our values and actions create tremendous pride, truth, and meaning, which are connected to one title, `Silverado Senior Living,Your Memory Care Resource.'" --Michelle Egerer (MEgerer @silveradosenior.com)

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bers. I relay news of our community and Summerville Senior Living as a whole; sometimes I read a family or resident thankyou letter. Sharing the positives makes a difference, but it's only part of the equation. Perhaps more importantly, I'm honest about my challenges and ask others to share theirs.Allowing them to vent is cathartic and enables on-the-spot problemsolving; above all, they know I care. Think of it as an open door policy in reverse--go see your staff in their `offices' instead of waiting for them to come to you!" --Lori Loucks ([email protected])

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here are several ways to improve the morale of

the staff.We allow the front-line care staff, who are a part of our day-to-day operations for the community, to participate in the decisions that would affect the task they are required to accomplish.We also want our staff to assist in the hire process of new employees. It's important to respect their decision and to listen to the staff; they can come up with some of the best ideas. We give our staff a sense of ownership, by implementing their ideas or selecting potential staff that they think would make effective employees, which then in turn makes our staff feel like an important part of the business." --Randall Ramroth ([email protected])

QUICK TIPS

Raising and maintaining staff morale at the community level is a challenge that requires consistent attention. However, a wellthought-out plan that includes avenues for the exchange of ideas and feedback can make the process easier and even enjoyable for everyone involved. Consider these tips for raising staff morale: Use your company's vision statement for inspiration. Most companies have a vision statement that executives can use as a launching pad for setting high standards for staff, as well as remind them of their continued excellence. An effective vision statement can be included in training meeting materials or personalized thank-you notes, for example. Get out of your office and into the conversations. Build time into your weekly or monthly schedule to visit communities and talk with staff members throughout buildings. If necessary, take brief notes on any concerns they share with you. Offer suggestions and follow up as needed. Implement an open-door policy. It may not be practical for an executive to have impromptu meetings with staff members, but it may be possible to set up regular hours each month during which you can welcome walk-in appointments. If not, consider setting up an e-mail account specifically for receiving feedback or appointment requests--then make sure to stay on top of those messages. M

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he simplest and most effective strategy I use includes openness, honesty, and one-on-one communication.This not only helps identify causes of low morale, but can actually help raise it. Plus, it requires no planning and costs nothing. Each day I walk around and talk with individual staff mem-

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Assisted Living EXECUTIVE

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Copyright, Assisted Living Federation of America

I N D U S T R Y

U P D AT E S

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A L F A

N E W S

NEED TO KNOW

ALFA Executive Roundtables:

Leaders Identify Best Practices in Assisted Living

LFA convened the nation's most innovative assisted living executives in Washington, D.C., last November to identify the most critical issues in assisted living operations, and examine best practices and solutions.The assisted living business leaders present were members of ALFA Executive Roundtables-- small, by invitation-only peer groups of executives. Meeting within their own Executive Roundtable groups-- SVP/COOs, Sales and Marketing Professionals, Clinical Quality Directors, and Human Resources Professionals--participants shared solutions to common challenges, discussed the future of the long-term care business, and identified new growth opportunities and ways

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around these issues. Assisted Living Executive will continue to report on Executive Roundtable results as details about initiatives and programs for

members become available. Also, see this issue for the launch of a regular column devoted to hot trends identified by the Executive Roundtables. For more information about Executive Roundtables, contact Paul Williams at [email protected] or call 703/894-1805, ext. 242.

ALFA Responds to Assisted Living Fire Safety Article

In response to a December 16 USA TODAY article on assisted living fire safety, ALFA President and CEO Richard Grimes issued a letter to the newspaper's editor that emphasized the difference between legitimate licensed assisted living residences and the illegal homes that present great danger to seniors.ALFA has an established commitment to working with state and local fire department officials to assure that appropriate fire safety measures are in place to protect residents who place their trust in providers.The letter also noted ALFA's active participation with the International Association of Fire Chiefs on recommendations for assisted living fire safety. "We agree with USA TODAY that illegal, unlicensed `assisted living' homes may present great danger to our seniors, because these homes are not held to the fire safety and other regulatory standards that legitimate assisted living communities must meet," Grimes wrote."We encourage seniors and their families who are interested in assisted living to make a careful study of the communities they are considering." To read the entire letter, as well as ALFA's Member Alert on the USA TODAY coverage, go to the "Press Room" on ALFA Online at www.alfa.org.

of doing business. Rarely do organizations bring together leaders for this type of peer-topeer interaction where new knowledge is created and ideas are shared. Solutions and challenges identified at these meetings help advance operational excellence in the assisted living business as assisted living leaders take ideas back to their companies and ALFA crafts programs

Top Resolutions Issued by 2005 White House Conference on Aging

The 2005 White House Conference on Aging (WHCoA) in Washington, D.C., concluded in December, and delegates have released the conference's top 10 resolutions.These will be part of a final report from the conference that will be presented to President Bush and Congress by June 2006. ALFA President/CEO and WHCoA delegate Richard Grimes says the resolutions discussed by the conference are consistent with ALFA's proposed resolution to the conference and its public policy program, which prioritizes consumer choice, access to quality care, and improved finance options. ALFA will continue to report on WHCoA news as information becomes available.To view the top 10 resolutions issued by the 2005 WHCoA, go to www.whcoa.gov.

ALFA Has Moved

LFA moved its headquarters this month to 1650 King Street, Suite 602,Alexandria,VA 22314 (Phone: 703/894-1805; Fax 703/894-1831).The new office is only two Metro train stops from Reagan National Airport, making ALFA more accessible, and is only minutes from Washington, D.C., facilitating ALFA's critical public policy work. "Moving to Old Town Alexandria provides ALFA better access to important informational resources," says ALFA President/CEO Richard Grimes."Our new space also offers improved meeting accommodations for association governance and better access to transportation."

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NEED TO KNOW

Mark Your Calendar Now!

he ALFA 2006 Conference & Expo--the most important annual event for senior living executives--takes place May 3-5, 2006, at the San Diego Convention Center. Participants will experience three days of high-impact speakers and programming, including keynote presentations from Ann Rhoades, former EVP of JetBlue Airways and president of People Ink, and Bruce Himelstein, SVP of sales and marketing, The Ritz Carlton Hotel Company. Register by March 20 and receive the Early Bird rate ($525 for ALFA members, $825 for non-members). Go to www.alfaconference andexpo.com for details.

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Operating Models

Occupancy Rates Improve

The latest Survey of Assisted Living Costs from the MetLife Mature Market Institute reports an increase in assisted living costs, particularly in metro areas. However, these increases are comparable to nationwide housing costs that continued to climb throughout 2005. According to the National Association of Realtors, the national median price for all housing types was forecast to increase 12.5 percent in 2005.The MetLife survey reports a 15 percent increase in assisted living costs, which includes meals,ADL assistance, medication management, housekeeping, recreational activities, and more. "Providers continue to increase quality of care and services to consumers, making the assisted living business stronger," says ALFA President and CEO Richard Grimes. Improved occupancy rates reflect that assessment.The latest Seniors Housing Research Report from Marcus & Millichap credits a slowdown in construction, a rise in occupancy, and well-defined, operating models for improved margins. Among the report's highlights:The assisted living sector continues to improve, with overall occupancy up in the fourth quarter of last year. The September 2005 report is available for download at www.marcusmillichap. com/Research/Reports.asp.

ALFA Magazine Wins

Assisted Living Executive, ALFA's members-only magazine, has received a bronze award from Association TRENDS, a national publication for association executives. Assisted Living Executive was recognized in its category for most-improved trade association magazine.

Professional Resources From ALFA

For more information about any of these resources, visit www.alfa.org or call 703/894-1805. I NEW: ALFA Online. The ALFA Web site is all new and easy to navigate for important assisted living information.ALFA members can log in for easy access to "members-only" resources and publications. Be sure to sign up for ALFA Update, the free e-newsletter from ALFA that brings you the latest news in assisted living. ALFA I ALFA Executive Portfolio. ALFA's groundbreaking Inside the Minds of Leading Executives in research report details what leading assisted living providers Assisted Living & Seniors Housing Leading executives give a detailed are planning for in four key areas: Growth Strategy, Strategic insider's perspective on: Growth Strategies Strategic Leadership Leadership, Quality Performance Management, and Quality Quality Performance Management Quality Resident Services Resident Services. I Assisted Living Guide & Checklist. This ALFA brochure clearly articulates the philosophy of assisted living and what consumers should look for when choosing a community. I Substitute Decision-Making: A Guide for Assisted Living Providers. This special report provides business-critical information about the substitute decision-making process with residents and family members.This report is available only to ALFA members. M

Assisted Living Federation of America

ALFA Appoints Director of Public Policy

ALFA has appointed Maribeth Bersani Senior Vice President and Director of Public Policy for the organization. Bersani will lead and direct ALFA's public policy efforts, staff the ALFA Public Policy Committee, and ensure that ALFA meets obligations to ALFA State Affiliates for reports, information, and other assistance. Bersani previously was executive deputy director of the New York State Office for the Aging. Bersani has a master's degree in gerontology from the University of Southern California. She most recently served as national director of government affairs for Sunrise Senior Living, where she directed government relations and advocacy activities at the federal level and in 36 states. She joined ALFA in January.

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A research report conducted by Acclaro Growth Partners LLC on behalf of the Assisted Living Federation of America (ALFA). May 2005

Copyright, Assisted Living Federation of America

Assisted Living EXECUTIVE

ALFA EXECUTIVE PORTFOLIO

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HOT Properties

Following the closing of 100-plus deals in 2005, experts predict a steamy acquisitions market this year

By Anya Martin

Copyright, Assisted Living Federation of America

C O V E R

S T O R Y

fter five years of slump, if the acquisition market for assisted living properties was hot in 2004, it was boiling over in 2005 and is expected to stay steamy for the next year or two, according to industry experts. "The market demand for senior care facilities is the strongest it has been since the mid-1990s, [and] owners of high-quality portfolios are flooding the market with their properties," says Stephen M. Monroe ([email protected]), partner for New Canaan, Connecticut-based Irving Levin Associates Inc., which tracks merger, acquisition, and venture capital data on the health-care and senior living markets, and editor of The SeniorCare Investor and the annual Senior Care Acquisition Report. "Right now, what we are seeing is that senior housing assets are viewed as a relatively attractive risk," says Raymond J. Lewis ([email protected]), senior vice president and chief investment officer for Ventas Inc., the prominent Louisville, Kentucky-based health-care real estate REIT. "The industry itself is in a very positive cycle in that there hasn't been a lot of new development, we've seen good occupancy rates, and there is underlying cash flow and positive value in the properties." The first half of 2005 saw 59 acquisitions of senior care properties or companies compared to just 34 in the same period of 2004. Between 55 and 65 more deals were expected to close in the second half of 2005, including "some of the highest priced deals, in terms of price per unit and price per bed," Monroe says.A large proportion of these are assisted living, but the market also included a significant number of independent living and independent/assisted mixed portfolios, he adds.

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"I think we will see more investments from abroad, especially from Canada and Australia. Australia itself has a booming acquisition market, so investors are very familiar with the industry, even though it is different in both countries."

Stephen M. Monroe Irving Levin Associates Inc.

The biggest deal of 2005, although not closed at press time, was expected to be the sale of Houston-based Hearthstone Assisted Living, which could total near $500 million, Monroe says.

FINANCIAL DEAL-MAKING

Buyers are divided into two categories-- senior care providers looking to expand and long-term institutional real estate funds replacing short-term growth capital. "A lot of the large transactions are more financial deals, where the seller/operator remains as the operator," Monroe says. "REITs are vying for the big deals, as well as the large real estate equity funds and pension funds and other opportunity funds. The large operators are also looking at most of the big portfolios on the market, but unless they are working with a financial partner, they are often getting beat on pricing. For the smaller deals that are too small for the big investors, it is still a wide open market." Another large institutional deal was the $1.2 billion acquisition by Ventas of Provident Senior Living Trust, which added 68 senior independent and assisted living properties to Ventas' portfolio. The principal tenants of these properties were subsidiaries of Chicago-based Brookdale Living Communities Inc. and Milwaukeebased Alterra Healthcare Corp. "From a purely real estate perspective, we liked the assets," Lewis says."Brookdale is among the best in the industry with large, high-quality assets in high barrier to entry markets in major metropolitan areas, run by what I think is one of the best operating companies." The fact that Brookdale is poised to go public--the first assisted living provider to do so since 1998--made it even more attractive and is an indication that assisted living as an industry has reached a critical point in its comeback, he adds. Last year, heads turned when Kuwait Finance House purchased 11 Benchmark Assisted Living assisted living communities from AEW Capital Management for $148 million, or nearly $196,000 per unit. And foreign investors are likely also to remain market players, Monroe says. "They are still involved in the market,

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HUNDREDS OF PROPERTIES SHIFT

The year 2005 started with a bang as Ontario, Canada-based Extendicare Inc. purchased Dallas-based Assisted Living Concepts Inc. for $280 million, adding 177 assisted living communities for a total portfolio of 442 senior living properties. Extendicare CEO Mel Rhinelander has indicated that the company is assessing oppor-

Copyright, Assisted Living Federation of America

tunities for further acquisitions. Another landmark deal was Intercontinental Real Estate Corp.'s purchase of nine communities managed by Wellesley Hills, Massachusetts-based Benchmark Assisted Living for $151 million. Benchmark, in turn, acquired five assisted living properties from Southington, Connecticut-based Athena Health Care Systems for an estimated $80 million in September and a five-property portfolio of Alzheimer's communities from Amicus Healthcare Group Ltd. in November. These deals closely followed Benchmark's October 2004 purchase of nine Greenville, Rhode Island-based Village Retirement Communities in Connecticut, Massachusetts, and Rhode Island for more than $160 million. Brentwood,Tennessee-based American Retirement Corp. bought eight assisted living communities from Waltham, Massachusetts-based Epoch Senior Living Inc. for $138 million. Newton, Massachusettsbased Five Star Quality Care Inc. acquired six Pennsylvania-based assisted living communities for $63.5 million.And Louisville, Kentucky-based Atria Senior Living Group purchased 17 assisted living communities owned, leased, or managed by Needham, Massachusetts-based Newton Senior Living LLC for an undisclosed price.

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"A lot of private equity investments that made seed investments in smaller regional and local players are looking to cash out in a relatively favorable acquisition environment. So I think what you see is willing sellers and motivated buyers coming into this market at the same time with a lot of capital available to them to fund the investment."

Raymond J. Lewis Ventas Inc.

parts of the United States. "Regions are still not as homogenous as one might expect, so building a brand in a particular region of the country will be easier than building one national brand," he adds. Another trend to watch is independent living providers acquiring assisted living communities and skilled nursing facilities, in effect creating continuing care retirement communities (CCRCs), Lisle says.

CAPITAL INFLUX CHANGED THE GAME

What's changed since those sluggish early 2000s when assisted living investment slowed to a halt? One major factor is simply the availability of capital, Monroe says. "The market itself is different in many regards and a bit more mature so lenders are more comfortable," he adds."They are also more comfortable because more `real equity' is being put into the deals, which will put a smile on any lender's face." In the case of providers expanding their properties, larger size will mean access to better and cheaper capital, which can pave the way for larger economies of scale and more growth, Lewis says. "At the same time, a lot of private equity investments that made seed investments in smaller regional and local players are looking to cash out in a relatively favorable acquisition environment," he adds."So I think what you see is willing sellers and motivated buyers coming into this market at the same time with a lot of capital available to them to fund the investment." Indeed, the biggest change is valuations, says Monroe.When Extendicare purchased Assisted Living Concepts at the beginning of the year, the per-owned unit rate was $56,000, but now the average unit rate for quality portfolios has soared to $200,000 to $250,000 per unit. Even standalones can reach more than $100,000 per unit. "The cash flow multiples that buyers are using in the market today are the highest ever--the inverse of this is that capitalization rates are the lowest--so investors with a portfolio of properties that was worth $100 million two or three years ago are sometimes able to get $150 million to $200

million today," he says."Part of it is also that occupancies and profits have risen as well, which always increases the value. Up until recently, there was little incentive for the owners of high-end portfolios to sell.And our assumption is that they realize that this market will not last forever, so if they have any thoughts of getting out, now is the time before rates go up or something else happens to jar the market." But right now, there's little that's likely to slow down the acquisition boom, Monroe says. "A 200 to 300 basis point increase in [interest] rates would have a material impact on pricing and demand," he adds. "Second, if one or more of these acquisitions does not work out financially, buyers, especially the new institutional real estateoriented buyers, will have some second thoughts about their pricing strategies." However, neither scenario appears likely at this time. Another roadblock would be that only so much existing product is available to change hands, Lewis says.

with a Canadian REIT buying a portfolio of retirement communities this year, and I think we will see more investments from abroad, especially from Canada and Australia," he adds. "Australia itself has a booming acquisition market, so investors are very familiar with the industry, even though it is different in both countries."

CONSOLIDATION STILL RULES

Generally, the move will be toward more consolidation in assisted living and in senior living as a whole, says Kit Lisle, a partner with Reston,Virginia-based Acclaro Growth Partners LLC, a consulting firm that provides advice on growth issues for midsize companies and conducted research for the ALFA Executive Portfolio, published last year. Lisle feels it will be difficult for more large nationwide providers, such as McLean, Virginia-based Sunrise Senior Living , to emerge. He cites that even Sunrise has moved away from communities that are exactly alike to providing different service offerings in different

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"Regions are still not as homogenous as one might expect, so building a brand in a particular region of the country will be easier than building one national brand. . . Another trend to watch is independent living providers acquiring assisted living communities and skilled nursing facilities, in effect creating continuing care retirement communities."

Kit Lisle Acclaro Growth Partners LLC

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Assisted Living EXECUTIVE

G R O W T H

S T R AT E G I E S

ORGANIC GROWTH AHEAD

And then there's new construction, but Lisle sees a "meaningful" shift toward more organic growth as being no closer than 2007 or 2008. Still, as buildings age, residents will be more attracted to new properties, and that factor will inevitably mean memories of oversupply will fade and new building become attractive again, he says. "One of the real concerns on the part of providers today is how to make 10and 20-year-old communities look relatively new," Lisle says."Clearly on the part of the resident, their preference will be for new property rather than refurbishment.That trend will inhibit merger and acquisition activity and foster new construction." With higher price tags on properties up for sale, buyers should not get caught up in the excitement of the feeding frenzy, Lisle cautions. He advises those considering

a purchase to assess each deal carefully, to go beyond financials and look at the corporate culture of the potential merger or acquisition. "The integration of two assisted living providers is in some ways more difficult than the integration of two manufacturing businesses," Lisle notes."The reason for that is corporate culture is incredibly important in assisted living--the culture of care, the culture of the staff, and the culture of the residents in the community. Culture as a tool for ensuring alignment of employees, residents, and families creates complications that acquirers in other industries don't have to deal with. As people think about acquisitions, they need to realize that they need a comprehensive plan for integration that includes people and culture." Financial due diligence should include some extra components--both external and internal, Lisle says. Research the

provider's external relationship with residents and family members and its positioning relative to competitors, but also consider such internal issues as operational effectiveness and the strategic direction of the company. "Are they basing strategic assumptions on facts or just on perceptions?" Lisle poses."Have they conducted an assessment of human capital? It's important for people to understand the distinction between quantitative data vs. qualitative insights about corporate culture, strategic direction, value proposition, and brand promise. In my opinion, the quantitative data you look at in due diligence are a given, but the qualitative really make the difference as to whether you will see value in the deal." M Anya Martin is a contributing writer to Assisted Living Executive. Reach her at [email protected]

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For the Not-So-Big Guys

Proven track record, solid numbers, and personality all help seal the deal

By Adam Stone

t's a cruel fact of financing: Those who have money get money. Cash is hardest to come by for those who need it most. A smaller assisted living company with a thin track record, few properties, and untested cash flow will always have a harder time getting access to capital. A bigger firm with a history will have it easier. Nevertheless, most assisted living organizations can access capital from lenders and investors so long as they have the numbers to prove their worth. "You have to get the census to make your building profitable in a reasonable amount of time. That is what makes the deal," says James F. Smith ([email protected] silveradosenior.com), CFO of Silverado Senior Living, who has won capital both the hard way and the easy way over time. "If they don't think the market can afford what you need to charge, if they don't like the market for some reason, they won't do it." Smith sought financing from REITs, which are willing to bankroll a more risky venture, though at a higher price. That money cost 10.5 percent, versus the 7.5 percent he pays for bank financing today. As a more mature organization, Silverado just purchased its fourteenth property, a $4 million rehab job being financed by Red Capital Group. Silverado put up 10 percent of the price tag from cash on hand.

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CASH

Even with the track record, though, the project had to be proven. Demographics, market studies, an independent appraisal: All were needed to secure the financing. Money can come from any number of sources, including banks and other institutional investors, angel funding, venture money, and even the government. For instance, the Washington State Department of Health's Health Care Facilities Authority provides access to capital funding for "modern, well-equipped, reasonably priced health-care facilities." More typically, though, assisted living companies will be out in the general marketplace looking for funding, and they may face an uphill battle. There is a ripple-down effect here, starting with the publicly traded companies. Even on Wall Street, small- and midsized health-care companies typically fly below the radar of the researchers and analysts whose notice is crucial in encouraging lenders to lend. For many,"the absence of analytical research coverage and institutional sponsorship is a key obstacle" to financing growth, according to a report by HealthCare Capital Advisors. This has a direct impact on privately held companies seeking capital. For privately held assisted living companies, the overall lack of research coverage for assisted living in the public markets makes it harder for everyone to access capital.

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Politics factor in, too. Given the unpredictable nature of the Medicaid and Medicare programs, some would-be financers are reluctant to bank on any enterprise that draws substantial revenue from these sources. Many lenders also are new to the assisted living arena, and that unfamiliarity can make them shy when it comes to making loans. "A lot of banks, if they don't understand the business, won't touch it," Smith says. To even have a chance of getting the loan, "it has to be a bank that understands this market segment."

PERSONALITY COUNTS

Faced with these obstacles, a growing assisted living enterprise needs more than just solid accounting, says Lynne Katzmann ([email protected]), president and CEO of the 15-property Juniper Communities. She says the path to financing runs straight through the heart. "You meet people, they like what you are doing, and they introduce you to other people," she says.This personal approach has helped Katzmann secure funding from more than 60 angel investors and other wealthy individuals who were willing to bank on her character and vision. As a smaller organization,"you need to identify people with whom you can connect," she says."In a bigger business, there are a lot of people to talk to, there is more of a track record to look at. But when you

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are smaller, when you are raising your first money, they are investing in you.They are investing in your character, in their belief that you will do what you say." There is no doubt that personality counts, and not just among angel investors. Even in these days of multinational banks and big-money institutional investments, a financing transaction still happens between individuals. It is nothing one can easily quantify, but those in the lending game will tell you that the attitude you bring to the

In a very fundamental sense, access to capital is all about operations. What do you need? Steady cash flow. Strong occupancy numbers. A track record of success.

--Lynne Katzmann Juniper Communities

table still can make or break a deal.The trust factor still counts.

SUCCESS FUELS MORE SUCCESS

The experiences of some smaller independent living communities still make it apparent that if the numbers are right, even a smaller enterprise can land big money in the name of growth. Consider Chelsea Senior Living, which owns eight buildings in New Jersey and New York.A year and a half ago, it

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refinanced a couple of properties in order to infuse cash into the system.That was easy, according to Chairman and CEO Herb Heflich ([email protected]).Those were strong buildings with positive cash flow, and the new loans helped the company erase some expensive bridge financing it had used to buy the buildings originally. Less simple was a second element of the deal, which involved the purchase of two bankrupt buildings. Merrill Lynch Capital funded the whole $48 million package, but Heflich says that might not have happened were it not for the success of the company's existing portfolio."Because we had some buildings that were stable, they were also ready to take on the bankrupt buildings," he says. Even then, the financing fell short of the total needed. Heflich made up the difference with a mix of loans from the company's existing investors, along with some internal capital. As a rule, though, Heflich tries to avoid borrowing from his investors, who typically want a bigger return than a bank. Four years ago, Chelsea stopped taking on new investors altogether in order not to dilute ownership of the company. In the search for capital, all these things matter: a track record, solid demographics, a realistic marketing plan, personal connections. But some say there is another factor of equal or perhaps even greater importance.And that's the ability to run a tight ship. In a very fundamental sense, access to capital is all about operations.What do you need? Steady cash flow. Strong occupancy numbers.A track record of success. To make all that happen,"you have to have good people and good systems," Katzmann says. "You have to know how to finance, of course," she says."But ultimately, the way you raise more money, whether it is debt or equity, is going to be based on the success of your operations." Run a tight ship, she suggests, and the money will follow. M Adam Stone is a contributing writer to Assisted Living Executive. Reach him at [email protected]

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CLEANING House

Use a "facility review" to identify and eliminate the under-performers in your portfolio and then create a new model of excellence

By Adam Heavenrich

s a high-level executive in a senior housing company, your primary duty is to maximize returns to your investors. On a daily basis, of course, that means working to ensure that your company's strategy, culture, and operations are meeting the needs of your residents. But it also means monitoring and trying to maximize the value of the company--for instance, by identifying strategic opportunities to acquire or dispose of assets. And as this month's cover story notes, you're likely to find some eager buyers in the market.

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But how do you know which properties to tag for divestiture? How do you identify those strategic opportunities? To make smart decisions about your portfolio of properties, step back from the fine grain (such as an individual residence's latest profit-and-loss statement) and look at the big picture. Conduct a "facility review"-- a formal process of assessing the strengths, weaknesses, and overall direction of your senior living organization, taking into account all of the properties currently in your portfolio. In the facility review, you'll ask which residences really belong in the portfolio and which are "outliers"--those

that don't fit into the overall strategy of the organization, drain vital resources away from the core assets, and stunt the company's overall growth. Outlier facilities may differ from core facilities in terms of target market, areas of competence, quality of service, reputation (which is not always in line with actual quality), location, or even facility size or age. Their presence in your portfolio can blur the company's image and scatter your day-to-day focus. Identifying and selling those outliers enables your company to redeploy its capital and human resources to where they are most needed: in the

Reprinted with permission from the January/February 2006 issue of Assisted Living Executive. © 2006 The Assisted Living Federation of America

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The first step in your facility review is to define what characteristics do fit into your organization strategically, and why. Think of this as your "sweet spot."

operation and improvement of your core facilities, and the acquisition of additional core communities as the company grows.

SWOT Analysis of XYZ Senior Living

Strengths I Established reputation in Midwest I Strong management team I Urban orientation Opportunities I Use existing infrastructure to grow through acquisitions I Look for Midwest assisted living facilities in urban areas and close to downtown shopping Weaknesses

I Lacks expertise in new development/construction I Poor performance in dementia services I Relative to competitors, poorly capitalized

Threats

I Larger and better capitalized competitors

build competing facilities in existing markets

VIEW FROM PRICE PEAK

Today, the senior housing transaction market stands--or perhaps teeters--at a historic moment. Facility prices are at unprecedented and possibly unsustainable highs. Some experts are speculating on whether cap rates are hitting dangerously low levels, at least in the top quality tier. (A facility's cap--or capitalization--rate is a ratio calculated by dividing its income from operations by its selling price. So when we're talking about lower cap rates, we're talking about higher selling prices.) That doesn't mean you should sell off strategically valuable assets just to make an easy profit. But it does mean that if your portfolio includes one or more outliers, now may be the time to put them on the market. Today's pricing advantage also has to do with another historic--but probably temporary--shift. Real estate prices in the assisted living market have always included a "risk premium," a factor that increases the price to account for all the potentially costly unknowns associated with senior living operations, such as regulatory, litigation, and health-care costs.As the transaction market has heated up in recent years, however, the pricing difference between assisted living and equivalent traditional commercial real estate has narrowed.To some extent, the premium has been squeezed out. But this can't last either, according to experts.With assisted living, although real estate is a large component there is always the possibility of regulation and other unknowns. Once the real estate boom starts to dissipate, the risk premium may return.

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Buyers and lenders alike share the concern that cap rates are too low and soon will increase. For those who have already bought the low cap rate (that is, expensively priced) properties in recent years, though, any reduction in selling prices would erode their equity. This would place stress on both lenders and investors. Meanwhile, the cost of carrying debt has been trending upward. (The Federal Reserve has hiked interest rates 13 times from June 2004 through Dec. 13, 2005). So, we'll see increasing downward pressure on prices from several directions.

BEGIN WITH SWOT ANALYSIS

The first step in your facility review is to define what characteristics do fit into your organization strategically, and why. Think of this as your "sweet spot." In senior living, your sweet spot depends on your company's strategic plan, business goals, core competencies, and other factors. Facilities that occupy the sweet spot are your core facilities.Those that don't are your outliers. Your sweet spot isn't a fixed target; it evolves over time as your company grows and builds its reputation. But at any given moment in your company's history, the sweet spot can be defined--and it should be kept in mind by the CEO and other key figures in the company. The best way to define your sweet spot is to conduct a SWOT analysis (for Strengths,Weaknesses, Opportunities, and Threats). In SWOT analysis, you and your colleagues use internal and external data and analysis to construct a simple, one-page

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grid, like the example shown above. In this example, the management team at XYZ Senior Living has listed among its strengths a thorough understanding of, and ability to meet, the needs of the Midwest, urban, upper-middle-class elderly population. The company knows that its target market has household incomes around $100,000­$150,000, and XYZ Senior Living has developed an excellent infrastructure and high-quality services to meet the needs of this clientele. It enjoys highest occupancy in communities within walking distance of a shopping area. Under the Weaknesses category, the team has listed its lack of expertise in developing or constructing new facilities, along with its low ability to provide care for seniors with dementia. On the Opportunities side, the team has noted several possible acquisitions within its geographic area that would result in real growth. Finally, under Threats, the team has listed consolidation in the senior housing industry and larger, better-capitalized operators whose greater economies of scale and jointly run back offices allow them to squeeze out the smaller operators through price competition. Through this SWOT analysis, a picture of XYZ Senior Living's sweet spot for properties readily emerges.The company's properties should be located in major urban areas with upscale demographics, and in areas where the labor market can provide a stable workforce. Competition is limited by the scarcity of available land in infill locations. Ideally, XYZ Senior Living prefers a market where there is a dedicated dementia

unit that can be both a source of referrals and a place to refer residents. With that picture in mind--a picture of the company itself as well as who its target clients are and what they expect from it-- XYZ Senior Living's CEO can easily identify the portfolio's outliers.

OUTLIERS REPRESENT LOST POTENTIAL

Outliers may exist in your portfolio for a variety of reasons. Sometimes they result from a multi-facility acquisition that included many strategic "fits" along with a few outliers, and you simply never got around to cleaning house. Or perhaps you did all the right research and hard work but the

community never quite lived up to its potential. Maybe the quality of the local labor pool was a challenge, or a single negative incident washed away the community's goodwill. The point in your facility review is not to point fingers, or to examine the past at all. It is to identify assets that are now more valuable to you out of your company than in it. You're better off without the outliers because of the 80/20 rule. Even if only 20 percent of your residences are outliers, they're probably taking up 80 percent of your time, not to mention other scarce organizational resources like capital, reputa-

Freeing capital to serve your core business units will do more to grow your company than any outlier facilities, no matter how successful they may be on their own terms.

tion, and human resources. Imagine freeing up those resources to plow into your core residences, thereby making that sweet spot even more productive and solidifying your company's identity. This holds true even if the outlier in question is making money. Positive cash flows do not necessarily mean a residence is right for your organization. Higher returns overall occur when your company's resources are allocated in a focused, strategic way. By redeploying your energies from outliers to core facilities, the company enhances investors' returns many times over. In addition, as you shed outlier facilities that have, for example, less-than-stellar reputations for service, you enhance your organization's reputation and the image you project to clients and the investment community. As the senior housing market continues to mature, distinct operating niches are carved out and the whole field becomes more competitive. In this climate, the efficient use of capital becomes increasingly important. Freeing capital to serve your core business units will do more to grow your company than any outlier facilities, no matter how successful they may be on their own terms. So, in addition to focusing your attention on acquisition and growth, it's important to take the time to clean out assets that don't belong. Doing so will put you in the best position to continue to grow and care for more residents in the long run which is what those investors are counting on you for. M Adam Heavenrich is president of Heavenrich & Company Inc. in Chicago, a senior housing mergers and acquisitions firm. Reach him at 312/558-1590 or [email protected]

Maximizing the Sale Value

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he process of valuing, packaging, offering, and closing on the sale of outlier facilities can be complex and timeconsuming. Use these common-sense steps to ensure you earn top value in the marketplace. I Bundle the assets you're trying to sell. You will fare better if you can offer a group of assets all at once, rather than a single facility here and there. The more active acquirers of senior living properties realize that the due-diligence process they must go through requires a good deal of manpower, time, and money. If they can spread that cost over a multiple-asset purchase, it makes their investment more attractive. It's also usually easier for buyers to secure financing for a multiple facility acquisition than for a smaller, one-off deal. Acquisition deals involving larger portfolios of properties attract more competition among potential lenders, and therefore more attractive financing terms for the buyer. So buyers are always looking for multi-facility opportunities. I Second, take the time to understand and describe what is valuable in the outlier properties you're selling. This may seem an obvious point, but a surprising percentage of sellers neglect to do it. Write down the facilities' strengths and what you think would enhance their value in the future. That kind of information--essentially a strategic plan for each facility you're selling--will help buyers recognize the true value of the assets you're offering, and will attract a more serious pool of buyers in the first place. I Be sure that cosmetic repairs and maintenance are completed before you go to market. Unlike the acquisition itself, capital improvements are difficult and expensive for buyers to finance. Most lenders consider repairs or capital expenditures as additional equity that will be required from the buyer. By increasing the overall equity requirements in the transaction, it raises the weighted average cost of capital for the buyer, and reduces the likely sale price. By making the repairs or necessary improvements yourself prior to the sale, you will make the whole package more attractive and generate the highest possible sale price and level of interest in your sale.

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Four-Star Inspiration

Hotel hospitality comes to assisted living

By Susan Fitzgerald

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ou may have to look twice at the Classic Residence by Hyatt's new continuing care retirement community in Palo Alto, California.At first glance, it appears to be a fine resort. Residents have access to a host of amenities, including a beautiful club-style dining room with courtyard for alfresco dining, formal dining room, bistro-style café, fitness center, heated indoor swimming pool and whirlpool, full-service spa, walking/bicycle paths, online computer center, art studio, library, auditorium and multipurpose room, billiards room, card and game rooms, club room, wellness center, and general store. Gone are the days of quiet retirements with few activities.As Americans get older and change their living arrangements, their expectations are increasing. Successful assisted living providers are constantly seeking ways to fulfill and exceed resident wants and needs. A natural jump, Classic Residence by Hyatt realizes that a logical place providers can look for fresh ideas is the fine lodging industry. Hotels and resorts work overtime to differentiate themselves in an area where the competition never sleeps.They constantly strive to earn travelers' loyalty as well as their dollars. In fact, taking a page straight from hotels, the Palo Alto facility has its own concierge area, explains Michel Desjardins ([email protected] com), vice president of operations for Classic Residence by Hyatt. Similar to high-end hotels, the facility's assisted living center offers meals prepared by classically trained executive chefs; transportation to shopping and events; and social, recreational, educational, and cultural programs and events.

Photos courtesy of Classic Residence by Hyatt

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OUT AND ABOUT

By offering transportation throughout the community, Hyatt and many other providers are answering a real need. Research shows that more and more, active assisted living residents are seeking opportunities to explore their community.And providers would do well to pay attention to the cultural needs of their residents. Lodging Magazine reports:"Eighty-one

Classic Residence by Hyatt's community at Palo Alto, California, has the appearance of a fine resort from its interior (above) to its entrance (opposite page).

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percent of U.S. adult travelers have shown an increased interest in cultural, arts, historic, and heritage activities, according to a study from the Travel Industry Association (TIA) of America and Smithsonian magazine." Judd Harper ([email protected] com), vice president of the Atlanta-based The Arbor Company, has a company that provides full-service development, management, and marketing services in the field of housing for the elderly. At one of Arbor's homes in Asheville, North Carolina, 20 to 30 residents sign up on a regular basis to attend community playhouse productions. And like many assisted living facilities, his provides transportation."Residents also take frequent boating trips," he says, all arranged by the residence. While such outings and transportation are not uncommon, having a great activities director is key, Harper says. He recommends a person who is in tune with providing "meaningful" experiences for residents-- experiences that promote a sense of wellbeing and include community and cultural activities. TIA data suggest that travelers on historic/cultural trips spend 36 percent more money ($623) relative to the average trip ($457), not including transportation. Thirty percent of these travelers say their destinations were influenced by historical/cultural events or activities. What's more, approximately 40 percent of travelers believe that trips including cultural, arts, historic, or heritage activities are more enjoyable and say they prefer destinations that have historical significance.

Giving Customers What They Want

Hotels with in-room, high-speed Internet access Hotels with in-room, wireless Internet access Hotels that charge for in-room Internet Hotels that offer low-carb menu choices 1998 7% n/a n/a n/a 2004 50% 35% 22% 23%

Source: AH&LA 2004 Lodging Survey

WIRED WAYS

Inside the residence, seniors are also looking to stay in touch. In a report released in 2004, the American Hotel & Lodging Association (AH&LA) polled more than 6,000 hotel properties about more than 100 areas ranging from hair dryers to complimentary breakfast for its lodging survey released in August 2005. The numbers say it all.And one of the most important facts is that guests want to stay connected: High-speed Internet access in guest-rooms increased from 7 percent in 1998 to 50 percent in 2004. At Classic Residence by Hyatt, all independent and assisted living apartments are wired

Assisted living providers aiming to deliver the height of service might look to emulate the offerings of some of the world's finest hotel companies. Here are some nuggets from luxury hotel Web sites about their upscale services: I Four Seasons Hotel "Four Seasons cooking schools let you share the culinary secrets--from inspired entertaining to regional cooking and spa cuisine--to enhance any repertoire. Whether for a few hours or a few days, join top chefs in our dedicated cooking school kitchens for a truly hands-on experience. Our small class sizes assure a high level of personal attention. After each session, you'll savor the tempting dishes you've prepared, and return home ready to share an authentic taste of your visit." I Westin Hotels & Resorts "Sensuous doesn't even begin to describe it. Stylish just hints at its handsome tailoring. Experience the Heavenly Bed in all its extraordinary glory with a custom-designed box spring and mattress set by Simmons with 900 individual coils, a bed skirt, a cozy down blanket, three 100 percent Egyptian cotton sheets, a comforter, a duvet with cover, five goosedown/goose pillows, and five pillow cases." I Mandarin Oriental Mandarin Oriental, New York, launched a "Bedside Reading" program. "Each guest room will feature a selection of complimentary books recommended by editors at New York Magazine. ... Madison & Mulholland enlisted top publishing houses including Penguin Group USA, HarperCollins, Hyperion, and others to donate titles for this on-going program. In the future, other notable media will be approached to recommend the hotel's bedside reading selections."

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for the Internet and cable television. Both have computer centers that allow residents to go online. They can also take classes to get them up to speed on useful technology. Arbor's Harper foresees a not-so-distant future where assisted living communities are equipped with wi-fi (wireless Internet) as residents become more computer savvy. "We are just starting to see our residents bring their own computers to their apartments," he says. Currently, Arbor homes offer access to computers, the Internet, and e-mail in the main areas. Staff members help residents use the stations; download and print pictures; and stay in touch with family and friends. It's not hard to imagine that one day senior living communities may mimic fine hotels when it comes to technology. Consider the practical implications of what the Mandarin Oriental New York offers its guests. Each room features an entertainment system that allows for tailored customer service.The system means the hotel can preset mood music in the room based on customer preferences, set the television to customers' channel preferences, and display guests' hometown radio stations on the Web.

WINING AND DINING

Whether at home or on vacation, meals are an integral part of everyday life.And with added emphasis on health and wellness, hotels as well as assisted living providers spend a good deal of their efforts on ensuring satisfaction. But there's another area where food comes into play.Americans are spending more time thinking about cooking--even if they're not doing it. New cooking shows appear on television everyday and more people are learning to cook. Desjardins notes that all of the Classic Residence by Hyatt chefs are certified executive chefs and attend extensive training through the Culinary Institute of America. They're also offering demonstration sessions at the facilities.The company's Web site even posts photographs and recipes from its chefs around the country. "Residents love it," says Desjardins."We have action stations where the chefs prepare food items in the dining room. It provides novelty and stimulation." Hyatt also has designated servers in its

The "Must Read" in the Executive Suite-- for ALFA members only

To continue receiving Assisted Living Executive, your company must be a member of ALFA. Questions? Contact Johnny White, Membership Database Manager, at 703/894-1805 ext. 237.

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MAY 2005

AssistedEXECUTIVE Living

Largest PROVIDERS

TWO MAJOR ACQUISITIONS ALTER HOW THE TOP PLAYERS STACK UP

GROWTH STRATEGIES

2005

Defining Your Brand

COMMUNITY SYSTEMS/INFRASTRUCTURE

New Interior Design Strategies

SPECIAL SECTION

Telemedicine in Assisted Living

THE BUSINESS MAGAZINE OF ALFA: THE ASSISTED LIVING FEDERATION OF AMERICA

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Q U A L I T Y

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HEALTH WISE

From nutrition to exercise, it seems every age group is more in tune with healthy choices. Assisted living can offer seniors an excellent chance to better their own daily habits. And spa services go hand in hand with feeling good. It's also another area where providers can look to hoteliers for guidance. "We do try to incorporate salon/spa services," says Classic Residence by Hyatt's Desjardins.This typically involves manicures and pedicures, but can also include specialty massage treatments. In Palo Alto, a premiere spa operations group is offering an extensive list of services to residents. For its part, The Arbor Company also prides itself on finding the best community partners to enhance its homes' wellness aspect. "Our rehab program is very proactive," Harper explains. The company's rehab partners are constantly working in the communities, inviting residents to exercise in the facility's small in-house gyms.Adding on to that service, Harper expects Arbor to offer massage therapy and spa services in the future. "In order to compete in our industry, you need to offer the best physical ambiance and offer a plethora of services," Harper stresses. For certain, retirement and aging isn't what it used to be. Seniors are looking to stay active and involved.Assisted living providers looking to offer such opportunities would do well to look to fine hospitality companies for inspiration. M Susan Fitzgerald is a contributing writer to Assisted Living Executive. Reach her at [email protected]

Residents at the Arbor Terrace of Asheville in North Carolina take advantage of outings to local parks.

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Photo courtesy of the Arbor Terrace of Asheville

dining rooms."We focus a lot on food services and invest a lot into this area," stresses Desjardins. He also notes that his company works hard to provide a continuity of service in this area, as residents move from independent living to assisted living. Meals are often the number one complaint in the assisted living industry, adds Harper."We encourage our food service directors to craft menus around what residents want. Having meal choices and nice menus displayed on the table--not paper ones" means a lot.

COMPLIANCE CORNER

RISK MANAGEMENT IN ASSISTED LIVING

Finesse Required When Addressing Family and Resident Issues

BY LORETTA G. LEBAR

s the explosion in long-term care litigation continues, companies must develop best practices to avoid litigation, especially in states where the liability system encourages lawsuits. The best defense against negative surveys, potential charges, and eventual lawsuits are lawful and up-to-date operational policies and procedures. Communities must effectively and completely implement these policies and procedures, as well as validate their operational effectiveness, to have an impact on the survey process or provide a suitable defense in case of a lawsuit. Because state regulations set the standard of care that must fail before a plaintiff's lawsuit has a winning chance before a judge or a jury, it is critical executives remain knowledgeable about regulations. Every owner and operator should take time to read the "2005 State Liability Systems Ranking Study" conducted for the U.S. Chamber Institute for Legal Reform by Harris Interactive Inc. Learning where your state ranks in providing a fair and reasonable legal system to handle the explosion in the number of lawsuits against businesses also provides some valuable insight on litigation avoidance. At the community level, management must internally advocate the importance of preventing resident and family problems through the establishment of a clear communication avenue.This is the first step in a processbased mechanism to keep problems from escalating into a lawsuit or complaint call to the state regulatory agency. Consider making arbitration and mediation part of resident

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agreements. Having scripts for marketing employees that provide a consistent theme of the services that the facility can and will provide often means the difference between going to trial and staying out of court. Communities need to be creative in providing ways for family members to voice their complaints about services or care. If they can't access you, they may contact a lawyer or state hotline instead. Some communities provide the administrator's cell phone number to allow families instant access. Others install secure mailboxes throughout the residence and inform residents and family members that if the administrator is not available,they can leave complaints or comments in the mailbox for next-day review. In addition to having an alternative method to handle disputes, such as mediation and/or arbitration, it is important to have operations adopt one or more of the following strategies to avoid litigation: 1. Always quote the source. When meeting with prospective residents and their families or legal representatives, make sure you clearly note in writing what information they have passed on to you regarding physical and mental health, as well as current financial status. If necessary, add an addendum to your residency agreement where residents can write in their own words about their current condition and how they expect that condition will affect their ability to live in comfort in your residence. For example, a disclosure from the resident might read,"I am slowly becoming incontinent and because of my problems with mobility, I cannot get to the bathroom fast enough." Using this mechanism in

states where the legal system's flood gates are open for litigious individuals will put the plaintiff's bar on warning that your defense will be their client's own words and actions.This also helps with allegations of consumer fraud and deceptive practices. 2. Do not characterize or diagnose. Provide training to your marketing staff and closely review all written marketing collateral, resident assessments, and residency agreements to omit statements based completely on opinion. Such items can lead to servicelevel decisions that may prompt litigation if the assessments appear to make a diagnosis or characterize a resident as having a medical or mental disability. Stick to behaviors, actions, and responses when assessing resident needs. Go for "pure disclosure" of resident service levels by dropping your characterizations and diagnostic opinions. 3. Defer, but get back quickly. Transfer liability away from the residence by consistently deferring to others when confronted with most resident conditions or issues. Verbally, get in the habit of responding to resident condition questions, rather than answering them. For example, when a family member asks,"Why are my mother's clothes disappearing each time the care giver does her laundry?" Do not make guesses. Say,"That's a good question. I will discuss it with the manager of that department and call you tomorrow." Many insurance carriers are working to develop and participate in aggressive approaches to managing long-term care litigation. Providers must have a solid plan to react effectively to survey findings, thoroughly understand the surveys and their repercussions, and combine that knowledge with a solid set of fully implemented policies and procedures. Otherwise, they are vulnerable to economic distress, especially in states that lack good liability systems or tort reform. M Loretta G. LeBar is an attorney based in Lexington, Kentucky. Reach her at [email protected]

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CONSUMER VOICE

Brain Fitness Program Attracts New Residents

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little extra brain power can go a long way--for residents as well as providers. Sunrise at Golden Gate Park in San Francisco offers its residents with dementia and mild cognitive impairment access to a comprehensive brain fitness program.The two most important results: happier, more engaged residents and a competitive edge for the community when it comes to quality resident services. Susan Edwards, former executive director at Sunrise at Golden Gate Park, worked with Posit Science--a San Francisco-based company that specializes in brain research and health--to implement a brain fitness program for residents in 2003. (At the time, the community was a Kisco Senior Living property.) Posit Science offered to conduct a trial of the program at the assisted living community.

WARMING UP FOR BRAIN FITNESS

Edwards consulted the resident council's president, who agreed to participate in a trial of the program, along with five other residents. The test program required 40 one-hour sessions (an hour a day, five days a week, for eight weeks) and included computer-based exercises that adapt to individual needs and abilities.At the conclusion of the test program, participants told Edwards they would like to continue with the program and thought other residents would be interested as well. Based on their feedback, buzz about the brain fitness program began spreading around the community.All the residents who had participated in the trial could more efficiently perform exercises in the brain fitness program by the trial's conclusion. Seeing the value an ongoing cognitive

BETTER MEMORY AND SELF-ESTEEM

"Residents who participate say they feel a little sharper, conversation seems clearer, and they remember phone numbers better," Edwards says. Such results help improve overall quality of life and self-esteem among residents, she adds. Family members also have expressed their gratitude for the brain fitness program because their loved ones seem happier and more engaged. For example, at age 71, one resident seemed to be retreating from daily activities at the community.Although she had lived in the community for more than a year, she had not participated in many activities or

formed any strong friendships. She preferred to eat alone and seemed depressed. She admitted that she didn't feel as sharp as she once did and that it frustrated her to go into a room and not remember why she had gone there. A staff member encouraged her to enroll in the brain fitness program.After eight weeks in the class, the resident reported feeling "much more engaged,""more competent," and "just more interested in things." She also reported far fewer frustrating memory lapses.What's more, Sunrise staff members say that this resident is now making new friends and joining an art class. Recently completed studies back up these anecdotal observations, according to program developers. Upon completing the 40-hour program, more than half of study participants achieve more than 10 years in cognitive improvement, including memory. Carla Sanchez ([email protected] seniorliving.com) is now executive director at Sunrise at Golden Gate Park; Edwards works for Posit Science."We are gearing up to start a new round of brain fitness classes for our residents who are already asking for more," Sanchez says."It's a service that not only makes our community more competitive in the market, but also improves the quality of life for residents." M Tamra Strentz is a freelance writer based in Asheville, North Carolina. For more information contact Carla Sanchez at 415/6646264, or visit www.PositScience.com.

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Photos courtesy of Posit Science

BY TAMRA STRENTZ

fitness program would bring to the community and taking into account the positive feedback from residents, Edwards sought buy-in from senior management and staff. But instead of offering the brain fitness program to residents as an "a la carte" item available for a fee, Edwards worked it into the community's activities budget."With the brain fitness program, we saw real marketability that would attract new residents. The initial investment would be offset from revenue generated as new residents moved in," Edwards explains. Soon after receiving approval from senior management, Sunrise at Golden Gate Park created an onsite brain fitness center with six computers. Edwards also recruited staff members to become coaches, so they could facilitate the program internally. When the program launched in February 2005, response from residents was positive: 25 percent of residents enrolled in the first class, another 25 percent registered for the second class, and soon there was a waitlist for additional classes. More than 80 percent of residents who complete the program have asked to repeat it.

EXECUTIVE ROUNDTABLE

C H I E F O P E R AT I N G O F F I C E R S / S V P O F O P E R AT I O N S

Fostering the Front Line

No matter what your business plan or company mission, a customer's first impression is almost always made at the front door

BY SUSAN FITZGERALD

ow can you best reach the local employees that can make or break your business? Assisted Living Executive spoke with several chief operating officers and operations executives--all members of the COO/SVP of Operations ALFA Executive Roundtables for ideas. While some of their ideas may seem simple, their importance can't be stressed enough. "At Oakdale Heights, our culture is centered on our associates first," says Jeff Slichta ([email protected]), COO, Oakdale Heights Management Corp., Redding, California."We feel that if we can create an environment where people can come and feel appreciated, valued, and

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e-mail surveys, one-on-one conversations, conference calls, and inviting executive directors to speak on a specific topic during our stand-up conference calls." "I meet with my regional directors on a weekly basis," says Joyce Waibel ([email protected]), senior vice president of operations for Bristol Care, with senior living residences across Missouri."I find that meeting frequently keeps everyone focused on current goals and allows us to identify any issues needing our immediate attention."Waibel also uses e-mail to communicate with regional directors and visits all front-line employees at least twice per year.

GETTING AWAY FROM IT ALL

In addition to the more traditional forms of communication, sometimes taking a break from the norm can reap benefits as well. Recently, Cindy Chastulik ([email protected] assisted.com), divisional vice president of operations for Milwaukee-based Alterra Healthcare Corp., convened her 35-person regional and divisional team in the mountains of western Maryland.The two-day retreat offered a chance for the entire team to get together. They usually meet separately by region. "Not only was it cost-effective, I received overwhelmingly positive feedback from the participants who felt this relaxed atmosphere encouraged creative thought while naturally assisting with the bonding of the team," explains Chastulik."The objective was a 2006 business planning session. I listed a half dozen operational issues that initiated the discussion, such as reducing line staff turnover, improving the employee safety cycle, and others." The result? "What I found was that the value was not the information I imparted to them, but rather the dialogue between the leadership in the three regions," says Chastulik."The value of this idea exchange was immense. For example, we were discussing methods of reducing line staff turnover and discovered one of our regional directors in Florida had created an out-

share their unique talents and abilities, that our residents will get the best quality care and service in this industry."

MEET AND GREET

How does a company with offices and communities on both coasts put its culture of appreciation into practice? With more than 2,000 senior living apartments in its portfolio, Oakdale Heights uses these strategies: I A monthly senior leadership meeting with all regional team members at the home office; I A Tuesday morning stand-up conference call with all executive directors and regional team members; I Scheduled weekly rap sessions with direct reports; and I Weekly e-mail newsletters concerning key projects or roll-outs with no more than three specific tasks to accomplish in five working days. "One thing we have learned as we are evolving is that seeking feedback and pushback as an organization is critical to our success," notes Slichta."Specifically, we ask for feedback in a variety of ways, including

NEW COLUMN

Executive Roundtable is a new regular column in Assisted Living Executive. In this space each issue, the magazine will address a recent hot topic identified by one of ALFA's Executive Roundtables. They include Chief Operating Officers/SVPs of Operations, Chief Financial Officers, Chief Marketing Officers, Clinical Quality Directors, Human Resources Professionals, and Executive Directors. ALFA's Executive Roundtables are peer groups of assisted living executives who develop new knowledge around operational excellence solutions in assisted living and long-term care. For details, contact Paul Williams at [email protected]

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Assisted Living EXECUTIVE

PRINCIPALS WANTED Clarion Bathware

44 Amsler Ave. Shippenville, PA 16254 standing welcoming program for her resi814/226-5374 ext 822 dences' line staff Fax 814/226-0730we that we all agreed should do across the division." www.clarionbathware.com Oakdale Heights also holds quarterly [email protected]

RESOURCE LINK

executive director retreats."We always strive toCelebrating our 30th anniversary give the operations an opportunity to get away from Clarion Bathware is proud in 2003, their business and focus on themselvesaand takeand innovator inthe to be leader a breather from day-to-day grind," saysliving industry. the assisted Slichta.

Manufacturing over 50 models of IMPROVEMENT PLANS compliant units. accessible and ADA By the very nature of assisted living,and Clarion has the knowledge the best ideas often come from front-line staff, experience to serve you. See our who have direct interaction with residents CONVERTIBLE SHOWER, which and their families. converts from a shower to a At Oakdale Heights, Slichta offers one bathtub, on our Web site.

To develop a continuing care retirement community on property located in the Appalachian Mountains. This property is located near the new I73 & I74 currently under construction and a proposed new county airport. Said property is within the corporate limits of a small town and adequate utilities available. The owner can be Seeking Investment reached by addressing inquiries to:

Up to $ 3,000,000

Investor with 2-3 million Property 8 Poplar seeking purchase of cash, Hill Drive Charleston, WV 25311 medical assisted care or facility lease back for 25-30

www.ridgetopretirement.com years, triple net. [email protected]

example of an associate suggestion that made a big influence on his entire company. "About two years ago, my regional director of sales and marketing and I were visiting our Fresno, California, property. TheyINC. BUS knew a company we were coming to do the infamous sales and marketing Champion Bus, to the audit. As we came Inc. front door, a sweet housekeeper was washP.O. Box 158 ing the glass and turned around, opened the Imlay City, MI 48444 door and said,`Welcome home to Oakdale Contact: Rick Lee Heights,' before introducing herself." A 800/776-4943 prospective resident who walked in with Fax 810/724-1844 Slichta made a www.championbus.comday." deposit to move-in that "Our employees are the pulse of our [email protected] company," agrees Waibel."In reality, the front-line employees have the best perspecTOUGH BUSES THAT LAST! tive because they work in the communitiesa Michigan-based Champion Bus is we serve everyday." of Thor Industries, business unit Her company has put into practice North America's leading many suggestions fromof small to midsize manufacturer these crucial staff. The most recenttour, transit, shuttle and church, includes a formalized dress code for front-line employees, creating sizes para-transit buses. Ranging in more user-friendly37 passengers with staff, from 8 to reporting forms for 7 and offering new furnitureeach bus can be different models, packages for communities. equipped to meet all customer Respecting and listening to your frontrequirements. line staff is imperative to your business. It undeniably affects your residents and bottom S S I S T E D L I V I N G O A Y your MAY 2004 Aline."We continueTtoDrecognize the importance of each of our associates and the incredible impact they have on our business," Slichta adds. Fostering these individuals is a vital way to keep your residents satisfied and your company running smoothly. M Susan Fitzgerald is a contributing writer to Assisted Living Executive. Reach her at [email protected]

[email protected] (559) 288-8217

True Fitness

P.O. Box 1747 Roswell, GA 30077 800/474-7646; Fax 800/474-7647 www.truehospitality.com [email protected] Fitness facility design and leading state-of-the-art fitness equipment. Contact John Sarver.

RESOURCE LINK

Assisted Living

Elder Transition Coaching & Resident Staff Services

Bradley Ann Morgan & Stephan Marais 4750 Lincoln Blvd. Suite 134 Marina Del Rey, CA 90292 Office 310-577-0771 Fax 310-577-8349 www.walksbesidecoaching.com [email protected]

EXECUTIVE

AVAILABLE

Assisted Living Site in Desirable Cleveland, OH Suburb 100 Units Approved Utilities Available R-7 Senior Residential District Zoning CONTACT: Darrell Young, Broker 216.831.6900

REAL ESTATE ALLIANCE, LLC CLEVELAND, OH

ZONED LAND

beats its nearest competitor by a 4-to-1 ratio as THE publication that is best read, referred Walks Beside Life Coaching specializes found useful. And to, and in the transition of Elders from their homes into independent or it covers the market so assisted living. We are certified coaches & members of the that it's the ONE buy you International Coaching Federation. Our program, `The Home of the Heart' need to reach assisted assists the Elder, their family, and living's expanding the community staff take the heartfelt steps to create their new home. market.

Advertise in the magazine that reaches the real decision-makers. Contact Alison Bashian ([email protected]) or Marianne Juliana ([email protected])

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[email protected]

800.335.7500

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PEOPLE & PLACES

SALES & NEW DEVELOPMENTS

new office in Los Angeles.The expansion provides new opportunities to better serve clients located on the West Coast.

FINANCIAL RESULTS

Ventas Inc., based in Louisville, Kentucky, reported that thirdquarter normalized funds from operations (FFO) rose 41.5 percent to $56.3 million, compared with $39.8 million in the third quarter of 2004. Normalized FFO per diluted share in the third quarter of 2005 increased 14.9 percent to 54 cents from 47 cents per diluted share for the comparable 2004 period. In the quarter ended September 30, the company had 103.9 million weighted-average diluted shares outstanding. Manor Care Inc., based in Toledo, Ohio, reported thirdquarter earnings per share of 60

cents per diluted share compared with 45 cents per diluted share in the 2004 third quarter. Revenues of $840 million increased from $807 million a year ago, and net income was $50 million compared with $39 million in the prior-year quarter.

American Retirement Corp. (ARC), based in Brentwood, Tennessee, reported third quarter 2005 diluted earnings of 13 cents per share, compared with a loss of 27 cents per share for the prior year's third quarter. Free cash flow increased 123 percent for the third quarter to $5 million versus the prior year. Occupancy averaged 94 percent, up from 93 percent for last year's third quarter.

Wellesley Hills, Massachusetts-based Benchmark Assisted Living has acquired five Alzheimer's care communities from Amicus Healthcare. Known as the Atrium properties, four of the communities are in Massachusetts and one is in Connecticut. This is the third major purchase for Benchmark since September 2004 when the company acquired nine communities from Village Retirement Communities. In March 2005, Benchmark acquired five assisted living communities from Athena Health Care Systems. All of these acquisitions are located in New England states.

American Retirement Corp. (ARC), based in Brentwood, Tennessee, is adding a new $2.5 million Alzheimer's and dementia care unit to its Homewood Residence at Victoria (Texas). The addition is expected to be ready for occupancy in June 2006. Homewood Residence currently has 60 independent living and 30 assisted living units.The one-story, 19-resident building will feature one-bedroom and studio apartments.

gage financing of $65 million. The transaction is subject o completion of due diligence and financing.

Seroka & Associates, a national marketing, advertising, and public relations firm based in Waukesha, Wisconsin, recently opened a

CORPORATE NEWS

Five Star Quality Care, based in Newton, Massachusetts, agreed with Sunrise Senior Living to accelerate the termination of 12 long-term management agreements to Nov. 1, 2005, from the previously announced date of Dec. 29, 2005.As part of the termination, Five Star paid Sunrise approximately $80.2 million in buyout fees and an additional $1.3 million for management fees.

APPOINTMENTS & PROMOTIONS

Toronto-based Sunrise Senior Living REIT is paying about $100 million (Canadian) for four assisted-living properties in the United States.Two of the communities are in the Washington, D.C. area, and the other two are in Boston and San Francisco. The properties were developed seven to nine years ago by Sunrise Senior Living Inc., which will continue to manage them under long-term management agreements with the REIT. The portfolio has room for 342 residents.The deal will be partly funded by new long-term mort30 JANUARY/FEBRUARY 2006

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Graham

Granat

Seroka

Cooper

St. James Place retirement community, based in Baton Rouge, Louisiana, has appointed John Graham president and CEO. Iris Granat has been appointed COO of the independently owned, 370-unit CCRC. John Seroka, vice president of Seroka & Associates, has relocated to Los Angeles to manage the company's new West Coast Office.

San Juan Capistrano, California-based Silverado Senior Living has hired Fran Cooper, RN, as director of health care services.

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Assisted Living EXECUTIVE

Framingham, Massachusettsbased Lifeline Systems Inc. has acquired the assets of privately held Care Technologies Inc., headquartered in Roswell, Georgia. Care Technologies supplies wireless emergency call systems to senior living facilities.The companies did not reveal the financial details for the acquisition. M

Hear from the nation's top business leaders including:

Copyright, Assisted Living Federation of America

2005 INDEX

ALFA MEMBERS APPEARING IN ASSISTED LIVING EXECUTIVE ARTICLES

AEW Capital Management Kathy Sweeney ..............Jan/Feb Alterra Clare Bridge of Highlands Ranch Christine Hendrick ..............May Alterra Healthcare Corp. Mark Ohlendorf................March, April, June Warren Rothman................April Alterra Wynwood of McMinnville Christine Rice ..............Nov/Dec American HealthTech Inc. Bill Caldwell ........................Sept American Retirement Corp. Jack Leebron .......March,July/Aug Bill Sheriff .....................June, Oct Terry Frisby.........................Sept American TeleCare Inc. Lawrence M. Diamond.........May American Telemedicine Association Jonathan D. Linkous.............May Arent Fox PLLC Michael Anderson Esq....Jan/Feb, March,April Arizona ALFA Karen Barno .........................Oct Avalon Technologies Inc. Stan Kabala...........................Oct Benchmark Assisted Living Jill Haselman ...................Jan/Feb Jack McCarthy ...........March, May Patricia Foran.......................April Thomas Grape......................Oct Bickford Senior Living Group Alan Fairbanks .............Sept, Oct Brandywine Senior Care Susan Klein ..........................Oct CAHSA Laura Landwirth ..................May CALA Sally Michael ......................April CapitalSource Inc. James Pieczynski............Jan/Feb

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CaraVita Senior Care Management Inc. Beth Cayce....................May, Sept Page Estes.............................Oct Care Technologies Inc. Steve Bate.............................Oct Carriage Court Jeff Johns........................Jan/Feb Cedar Mountain Commons Julie van Elswyk ...............March Chancellor Health Care Michel Augsburger ..........March, April, June, Oct Danit Cave............................Oct Chelsea Senior Living Roger Bernier...................March Loretta Kaes.........................April Classic Residence by Hyatt Nancy Retson ......................May Deidra Schwartz............Nov/Dec CNL Retirement Properties Phillip M. Anderson.......Jan/Feb Colorado Association of Homes & Services for the Aging Laura Landwirth, CAE ..........May Commonwealth Assisted Living Richard Brewer............Nov/Dec Country Meadows Retirement Communities Ted Janeczek ..............March, Nov/Dec G. Michael Leader ..........July/Aug Thomas W. Baker...........July/Aug

Duane Morris LLP Michele J. Braun Esq.............Oct Dynamic Performance Traci Bild..........................March Edgemere Retirement Community Amanda Burzynski...............May Encore Senior Living Heather Blackburn..............Sept EPOCH Senior Living Debora Pfaff.................Nov/Dec Erickson Retirement Communities John Erickson/ Jackie Schatell ......................June Kate Newton/Jeff Ferguson/ Jodah Ronch/Kelly Trudell/ Lyn Lubic/Michael Shaw ......Sept Mark Erickson ...............Nov/Dec Rick Grindrod..............Nov/Dec Matthew Narrett M.D....Nov/Dec Eskaton Senior Residences and Services Inc. Trevor Hammond................Sept Excellence in Caring Karen Stratoti .....................April Five Star Quality Care Maryann Hughes .................April Evrett Benton .......................June Rosemary Esposito...............Oct Freddie Mac Margaret Scott................Jan/Feb GE Healthcare Financial Services Greg Scrine ....................Jan/Feb Georgia ALFA Genia Ryan.......................March Goldman & Associates PR Audrey Knoth ......................May Greystone Communities Rick Hunsicker ............Nov/Dec Guardian Systems Inc. Richard Helstrom .................Oct Health Care REIT Ray W. Braun...................Jan/Feb Healthcare Finance Group Kevin McMeen...............Jan/Feb Hearthstone Alzheimer Care Joan Hyde............................Sept Hearthstone Assisted Living Inc. Lori Juneau.......................March

HHHunt Steven C. Cochran..............April Horizon Bay Senior Communities Sarah Curtis ..................July/Aug Ideal Software Inc. Lance Raab..........................Sept Intercontinental Services Philip Scott ..................Nov/Dec K&B Underwriters LLC Bryan Baird .........................June LALA Lisa Comeaux ...............July/Aug Life Care Services Liz Bush............................March Life Work Synergy Lisa Whaley ......................March Lighthouse Companies Art Seifert............................June Lutheran Hillside Village Rita Vicary....................Nov/Dec Mass-ALFA Emily Meyer/ Michael Banville..................June Mather LifeWays Institute on Aging Perry Edelman....................April Mature Marketing and Research Howard Willens ............July/Aug MidAtlantic LifeSpan Isabella Firth ..................Jan/Feb Montgomery Place Hyde Park Michael Apa .................Nov/Dec Moore Diversified Services Jim Moore..............Jan/Feb, Sept Move-N Software Rita Burgett .........................Sept NewSeasons Assisted Living Communities Debbie Armus ......................May Tom Donaghue.....................June Mary Ann Bond .....................Oct OALA Jean Thompson ...................Sept PALs Software Thomas Patten .....................Oct Point of CareWare Inc. Paul Budak ..........................Sept

Assisted Living EXECUTIVE

Resources for Senior Living Jeff Palmer.............................May Jonathan Howard.........Nov/Dec Retirement Community Specialists Annette R. Richardson .....March Sedgwick Plaza Retirement Community Kim Sanders...................Jan/Feb SeniorMed Pharmacy Stephen Axelrod M.D.....Jan/Feb Seroka Healthcare Marketing Brent Campbell...................June Signature Senior Living Steven L.Vick ..............June, Oct Silverado Senior Living Jack Peters........................March Loren B. Shook .................March Denise Parker ........................Oct Le Riggs .................................Oct Anne Ellett ...................Nov/Dec Silverado Senior Living-- Cypresswood Travis Fogle ..................July/Aug

Somerford Assisted Living & Alzheimer's Care Mark Wexler.................Nov/Dec Sound Health Management Lisa Skelton .........................Sept Southern Assisted Living Inc. Levonia Williams ................April Chris Hollister...............June, Oct DuVal Byrd CPA ............Nov/Dec Stephen Gordet Associates Stephen Gordet ...................May Sterling Glen Senior Living David E. Schneck .........Nov/Dec Summerville at Kenner LLC Deeni Shannon ............Nov/Dec Summerville Senior Living Inc. Justin Hutchens.....Jan/Feb, June Jayne Sallerson .................March Budgie Amparo ....May, Nov/Dec Frank Tsai .............................June Sunrise Assisted Living Steve Anastasio.................March Jeff Jasnoff...................April, Sept Daniel Schwartz ..........May, June, Oct, Nov/Dec Paul Klaassen........June, Nov/Dec

Jamison Gosselin............July/Aug Paul Klaassen/Cindy Musikantow/Phil Downey....Sept Bradley B. Rush......................Oct Cindy Peterson..............Nov/Dec Laure Duhot ..................Nov/Dec Sherry Robinson ...........Nov/Dec Stephanie Handelson ....Nov/Dec Sunrise Assisted Living of Burlington Trisha Blackburn..........Nov/Dec TALA Becky Squires/ Skip Comsia ........................Sept Tel-Tron Technologies Brian Dawson.......................Oct The Arbor Co. M.E. Costello .......................June The Fountains James Goebel.......................May The Highlands at Pittsford Michael J. Bierley .................May The Inn at Sprucewood Denise Cadorette.................May

The Wartburg Adult Care Community David Gentner .....................May Thilman Filippini John Atkinson ..............Nov/Dec THOMCO Greg Thompson ..................June TouchStone Senior Services Patricia E.Treinen................June Uni-Ter Underwriting Management Corp. Sanford Elsass......................June Ventas Healthcare Properties Ray Lewis.......Jan/Feb, Sept, Oct Veranda Living Inc. Skip Comsia .................Nov/Dec Vigil Health Solutions Inc. Troy Griffiths........................Oct Vigilan Inc. Christian Mason/ Doug Fullaway ....................Sept WALA Jim Murphy..................Nov/Dec Williams Mullen Marty Donlan.......................April

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2005 INDEX

FEATURE ARTICLES BY OPERATIONAL EXCELLENCE TOPIC AREA

Growth Strategies

I I I I I I I I I I I I I I I I I

"Easier Money" by Anya Martin .............................................Jan/Feb "Think Globally,Act Locally" by Anya Martin............................March "Occupancy Upswing Continues" by Anthony J. Mullen .........March "Building the Brand" by Adam Stone ...........................................May "Making the News" by Audrey Knoth .........................................May "Mastering Metrics" by Anya Martin............................................June "Tracking the Long-Term Care Markets"by Robert G. Kramer ........June "Rethinking Real Estate Assets" by Raymond J. Lewis ................Sept "On a Roll?" by Adam Stone.........................................................Sept "Going Public--Again" by Whitney Redding................................Oct "Beyond the Dosing Cups" by Stephen Axelrod M.D. ...............Jan/Feb "Your Role as Financial Counselor" by Jim Moore ..................Jan/Feb "The Challenges of Aging in Place" by Jack Leebron .................March "Regulatory Free-For-All" by Ann McDermott...............................Oct "The Dementia Care Conundrum" by Adam Stone ..............Nov/Dec "You Sign Them Up,They Move Them In" by Whitney Redding...........................................................Nov/Dec "Armchair Quarterbacks" by Adam Stone ................................March "Corporate Compliance: A Dangerous Omission" by Adam Stone ...........................................................................April "Partial Coverage" by Whitney Redding .....................................June "Mission Possible" by Adam Stone...............................................June "Legal Minefields" by Adam Stone .......................................July/Aug "For a Broader View, Open the Window" by Adam Stone.............Oct "Calm Before the Storm" by Anya Martin.............................Nov/Dec "When Midsize Is the Right Size" by Whitney Redding .......Nov/Dec

"Insights from the Inside and the Outside" ...............................April "Living the Demographic" ...........................................................May "How We Talk About Who We Are" .............................................June "Member Value! Member Value! Member Value!" .................July/Aug "Seeking Answers Together" ..........................................................Sept "ALFA Members Rallied To Aid Hurricane Victims" ......................Oct "What Is a Midsize Assisted Living Company?"....................Nov/Dec "Do Your Ads Discriminate?" by Michael E.Anderson Esq. ........Jan/Feb "Legal Audits" by Michael E.Anderson Esq. and Ronald H. Clark Esq. ...............................................................March "Non-Union Workers Have No Right to Coworker Representation" by Michael E.Anderson Esq.,..........................April "What You Need to Know About Employment of Service Personnel" by Michael E.Anderson Esq. and Michael L. Stevens Esq. ..............................................................May "Do You Really Trust Your Legal Counsel?" by Darcie Davis.....July/Aug "With Arbitration, Resident Disputes Are Resolved Faster, Cheaper" by Loretta Lebar and Keith Maurer............................Sept "Legal Prep Protects Providers from Lawsuit Disclosure" by Michele J. Braun Esq. ......................................................October "It Takes More Than Better Lifting to Curb Costs" by John Atkinson Esq. ........................................................Nov/Dec "Georgia-ALFA:Annual Conference Raises Industry's and Association's Profile" by Genia Ryan CAE ..............................March "CALA: Successful Partnerships Aid in Shaping Public Policy" by Sally Michael ........................................................................April "MASS-ALFA: Quality Improvement Initiative Promotes Operational Excellence" by Emily Meyer Ph.D. and Michael Banville M.S.... June "CAHSA: Creating Compelling Member Communications" by Laura Landwirth CAE ............................................................May "TALA:Accreditation Victory Fuels a Legislative Campaign" by Becky Squires and Skip Comsia............................................Sept "LALA:AL Execs Play Key Role in State-Level Advocacy" by Lisa Comeaux.................................................................July/Aug "AZ-ALFA: Survey Says...Board Members Can Help Build Membership" by Karen Barno ....................................................Oct "WALA:Why You Should Boost Your Training Budget Next Year" by Jim Murphy..................................................Nov/Dec "Preserving Independence Requires More Creativity" by Kim Sanders.....................................................................Jan/Feb "Strategies for Improving Activity Programming" by Annette Richardson ...........................................................March "Study Shows Assisted Living Continues To Hit the Mark on Satisfaction" by Perry Edelman Ph.D., Marylou Guihan Ph.D., Donna Munroe Ph.D., RN, Scott Miskevics, Kevin Clark, and Jeffery M. Erdman .....................................................................April "Wellness Programs That Respond to Resident Needs and Attract Customers" by Christine Hendrick ............................................May "Videography Classes Show Aging in a New Light" by Jackie Schatell.......................................................................June "Home Is Where the Hounds Are" by Travis E. Fogle ............July/Aug "Focus on Resident Strengths, Not Weaknesses,To Boost Quality of Care" by Kate Newton ..............................................Sept "Residents Benefit from Provider's Taste for Food Service Excellence" by Mary Ann Bond ..................................................Oct "Community Partnership Builds `Trail' to New Neighbors" by Cindy Peterson ..............................................................Nov/Dec

Compliance Corner

I I I I

Quality Resident Services

I I I I I I I I I I

Leadership

I I I I I I I I

Affiliate Spotlight

I I I I I I I I

Community Systems/Infrastructure

"Shared Spaces" by Anya Martin ..................................................May "Building Excitement" by Anya Martin ........................................Sept I "Safety First (and Management a Close Second)"by Anya Martin............Oct

I I

Quality Performance Management

I I I I

"Culture Capital" by Jill Haselman .........................................Jan/Feb "HR Support from the HQ" by Anya Martin ..............................April "Refreshing HR Solutions from the Outside"by Anya Martin ......July/Aug "Smart Technology, Smarter Business" by Anya Martin................Sept "Power Up: Preview to the 2005 ALFA Conference" by ALE Staff ...............................................................................April "2005 Largest Providers" by ALE Staff and Anthony Mullen ........May "Telemedicine in Assisted Living" by Anya Martin, David M. Kutzik Ph.D. and Anthony P. Glascock Ph.D. ..............May "Scenes from ALFA's 2005 National Conference & Expo" by ALE Staff................................................................................June "ALFA Announces Dues Structure Changes" by ALE Staff .....July/Aug "The Senior Market" by Susan Fitzgerald ..............................July/Aug "Resident-Focused Technologies" by Jim Moore .........................Sept

Consumer Voice

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SPECIAL SECTIONS AND BULLETINS

I I I I I I I I

I I I I I I

DEPARTMENTS/COLUMNS Top of Mind by Richard P. Grimes

I I

"Why Your Company Is a Member of ALFA" ......................... Jan/Feb "What Keeps You Up at Night?" ..............................................March

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Copyright, Assisted Living Federation of America

Assisted Living EXECUTIVE

34 JANUARY/FEBRUARY 2006

AD & MEMBER INDEX

A L FA B O A R D O F D I R E C T O R S

Chair: Steven Vick, CEO Signature Senior Living Vice Chair: Michel Augsburger, President & CEO Chancellor Health Care Inc. Secretary: Tiffany Tomasso, COO Sunrise Senior Living Treasurer: John "Skip" Comsia, President Veranda Living Immediate Past Chair: Thomas Grape, Chairman & CEO, Benchmark Assisted Living Evrett W. Benton, President, CEO, and Secretary Five Star Quality Care Beth Cayce, CEO CaraVita Senior Care Management Services Horace D'Angelo Jr., President Caretel Inns of America Joe Eby, President Bickford Senior Living Group Inc. Thomas Fairchild Ph.D., Director, Special Projects on Aging, University of North Texas Health Science Center Jeff Johns, President Carriage Court Communities W. Bradford Klitsch, Vice President of Market Development, Direct Supply Mark Ohlendorf, President & CEO Alterra Healthcare Corporation Ross Roadman, SVP for Investor Relations and Strategic Planning American Retirement Corporation Loren Shook, President, CEO & Chairman Silverado Senior Living Richard P. Grimes, President/CEO ALFA AAEC Representative: Sally G. Michael, President California Assisted Living Association COS Representative: Eric L. Johnston, President Retirement Community Specialists Inc.

AD INDEX

AMERICAN DATA, Bonnie Sesolak, 800/464-9942, www.american-data.com ..............................1 CONCURRO SOFTWARE, Teresa Murphy, 650/969-2015, www.concurro.com................................7 DIRECT SUPPLY HEALTH CARE EQUIPMENT, 800/480-7250, www.directsupply.net ........................C4 HCR MANOR CARE, Susan Nickel, 800/427-1902 ext. 7866, www.hcr-manorcare.com.............2 HOME FREE, Brian Verban, 800/606-0661, www.homefreesys.com...............................................4 HOME INSTEAD SENIOR CARE, Holly Batchelder, 888/484-5759, www.homeinstead.com........11 IDEAL SOFTWARE, Lance Raab, 813/864-2160, www.idealsoft.com.............................................C2 INTEGRAL CONSULTING SERVICES, Janet Welch, 858/677-1286, www.islllc.com ..........................24 JCH CONSULTING GROUP, INC., Jim Hazzard, 888/916-1212, www.jchgroupinc.com ..............25 MOVE-N SOFTWARE, Move-N Representative, 817-282-7300, www.move-n.com..........................8 NASCO, 800/322-2209, www.eNasco.com ...........................................................................................18 NUSTEP, NuStep Representative, 800/322-2209, www.nustep.com.............................................24 SOOTHEZE, Paul Losch, 510/657-4577 or 415/269-1427, www.sootheze.com........................15 TARGETLEADS, Michelle Bardin, 800/723-5254, www.targetleads.com......................................18 VIGILAN INC., 800/443-1127, www.vigilan.com.................................................................................C3

MEMBER INDEX

Alterra Healthcare Corp. 13, 28 American Retirement Corp. ..........................13, 30 Arbor Terrace of Asheville ....25 Atria Senior Living Group ....13 Benchmark Assisted Living .........................13, 30 Bristol Care...........................28 Brookdale Living Communities Inc. ............13 Care Technologies Inc..........30 Chastulik, Cindy ...................28 Chelsea Senior Living...........18 Classic Residence by Hyatt ...........................22 Cooper, Fran, RN ..................30 Desjardins, Michel ................22 Egerer, Michelle, M.Ed. ...........6 Epoch Senior Living Inc.......13 Extendicare--Colonial Lodge Plano............................6 Five Star Quality Care Inc. ....................13, 30 Graham, John........................30 Granat, Iris............................30 Harper, Judd..........................23 Hearthstone Assisted Living ...............................13 Heflich, Herb........................18 Homewood Residence at Victoria .............................30 Irving Levin Associates Inc. .................13 Juniper Communities ...........16 Katzmann, Lynne ............16, 18 LeBar, Loretta G. ...................26 Lewis, Raymond J............13, 14 Lifeline Systems Inc..............30 Loucks, Lori ............................6 Manor Care Inc. ...................30 Merrill Lynch Capital............18 Monroe, Stephen M. .............13 Newton Senior Living LLC ...13 Oakdale Heights Management Corp................28 Ramroth, Randall ....................6 Red Capital Group ...............16 Sanchez, Carla.......................27 Seroka & Associates..............30 Seroka, John..........................30 Silverado Senior Living.........30 Silverado Senior Living--Newport Mesa ..........6 Slichta, Jeff............................28 Smith, James F.......................16 St. James Place ......................30 Summerville at Valley View ........................6 Sunrise at Golden Gate Park ............27 Sunrise Senior Living Inc. ............14, 16, 30 Sunrise Senior Living REIT...30 The Arbor Company.............23 Ventas Inc. ................13, 14, 30 Village Retirement Communities ........................13 Waibel, Joyce ........................28

A L FA P R E S I D E N T ' S C O U N C I L

Michael H. Cook, Baker & McKenzie Brad Klitsch, Direct Supply Healthcare Equipment Susan V. Kayser Esq., Duane Morris Joel Goldman, Hanson Bridgett Marcus Vlahos & Rudy J. Michael Stephen, Health Care REIT Inc. Joe Whitt, HomeFree Inc. John Baker, IMA Financial Group Vivek Bhide, Invista Bryan A. Baird, K&B Underwriters LLC Casey Pittock, Lifeline Systems Inc. Art Seifert, The Lighthouse Companies Carol A. Muratore, McKesson Medical Surgical Lisa Hanauer, MED-PASS Inc. Curt Schaller, Merrill Lynch Capital Elizabeth Finn-Elder, Nathan Sallop Insurance Agency Inc. Debbie Zwiefelhofer, Novartis Nutrition Corp. George F. Quintairos, Quintairos, Prieto, Wood & Boyer PA Steven Axelrod, MD SeniorMed Norrell Walker, Senior Psychological Services Inc. Kevin Pope, Stanley-Senior Technologies Inc. Loretta G. LeBar, Stoll Kennon Ogden PLLC Douglas MacLatchy, Sunrise REIT John M. Atkinson, Thilman & Filippini Greg Thompson, Thomco Raymond J. Lewis, Ventas Healthcare Properties Inc.

Copyright, Assisted Living Federation of America

Assisted Living EXECUTIVE

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JANUARY/FEBRUARY 2006 35

PRODUCTS & RESOURCES

F O R

A S S I S T E D

L I V I N G

BOOKSHELF

I The Leader's Tool Kit: Hundreds of Tips and Techniques for Developing the Skills You Need By Cy Charney Leaders, and aspiring leaders, are eager to develop the important skills they need to excel in their roles, but few have the time for such career development. The Leader's Tool Kit: Hundreds of Tips and Techniques for Developing the Skills You Need by Cy Charney offers guidance (AMACOM, $17.95).Veteran and new leaders alike will find handy checklists and practical advice on topics such as strategic leadership, coaching, mentoring, retention, accountability, innovation, career development, and leadership fundamentals. Contact: www.amacombooks.org. I Strategies That Win Sales: Best Practices of the World's Leading Organizations By Mark Marone and Seleste Lunsford In Strategies That Win Sales: Best Practices of the World's Leading Organizations ($25, Dearborn Trade Publishing), Mark Marone and Seleste Lunsford reveal how 17 of the world's top companies have repositioned themselves to compete in today's complex selling environment. The authors spoke with 150 sales professionals and corporate leaders, including those from Marriott International, Hewlett Packard, Diebold, Fuji-Xerox, and LTD Waterhouse to discuss how they have pursued and implemented global solutions to remain competitive. Contact:ww.dearborntrade.com.

Avery Dennison Worldwide Office Products, based in Brea, California, has introduced Avery Photo ID System, a line of photo ID products that provide an easyto-use visitor management system with a "photographic memory" for logging in and tracking of visitors.The system allows front lobby personnel to register visitors quickly and efficiently,produce attractive color photo identification badges, keep a digital record of all facility visitors, and maintain a more professional entrance or lobby. Organizations that use older paper visitor logs can easily upgrade to the color identification and digital recordkeeping system.The Avery Photo ID System kit includes software,Web camera, bar code scanner, USB hub, and sample photo ID badge supplies. Contact: www. avery.com or 800/732-8379. Follett Corp., based in Easton, Pennsylvania, has introduced two models of medical-grade undercounter refrigerators.The 4.8-cubic foot Model REF5 fits below standard 36-inch counters, and the shorter 4cubic foot REF4-ADA fits below 34-inch ADAcompatible counters.An external digital temperature display in both Fahrenheit and Celsius

36 JANUARY/FEBRUARY 2006

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makes mandated temperature logging quick and easy. Both models feature stainless interior and exterior, locking door latch for security, and a powerful compressor for stable temperature and quick temperature pulldown. Both models have passed both the Energy Star and California Energy Commission requirements.They support JCAHO standards for medication storage and are UL, cUL, and NSF listed. Contact: www. follettice.com or 800/523-9361.

HCPro Inc., based in Marblehead, Massachusetts, has released the CNA Training Solution Video: Falls Prevention. The video trains CNAs on how to help prevent resident falls, teaching them to recognize and address risk factors. Set in a long-term care facility, the video provides information and techniques that follow the most recent guidelines of care.The 45-minute video presentation on end-oflife care includes a complete lesson plan, handouts for CNAs, a post-test, and a certificate of completion for documenting mandatory inservice training hours.Ancillary training materials are located on the accompanying CD-

ROM. Contact: www.hcmarket place.com or 800/650-6787 and mention source code EV40849A.

Senior Technologies, based in Lincoln, Nebraska, has announced the TABS PSD Sensor Pad, a point-of-care monitor system designed for individual patient use up to seven days.The TABS PSD is a disposable sensor pad that allows staff to monitor and help ensure the safety of patients while preserving freedom of

Copyright, Assisted Living Federation of America

Assisted Living EXECUTIVE

mobility.When interfaced with TABS Professional Monitors, the sensor pads provide a restraintfree system that alerts staff and provides gentle, dignified, customizable voice feedback that helps keep patients in their beds until help can arrive. Disposable and designed for single-patient use, the pads help to eliminate infection control concerns associated with the reuse of pads on multiple patients. Contact: www.senior technologies.com. M

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Copyright, Assisted Living Federation of America

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January 2006 Assisted Living Executive

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January 2006 Assisted Living Executive