StoneGate Senior Care: Uncharted Territory
Long Term Care
Written by Eric Slack   
Thursday, 31 January 2008
StoneGate Senior Care: Uncharted Territory - Health Executive-RedCoat Publishing
These skilled nursing specialists are changing the way the industry does business in the South.
With so much attention on nursing and senior care, it is surprising how little light is cast on skilled nursing for seniors. Instead, independent and assisted living options tend to get all the press. Having celebrated its sixth birthday last November, StoneGate Senior Care devotes most of its resources to this underserved healthcare niche.

StoneGate Senior Care: Uncharted Territory - Health Executive-RedCoat Publishing
John Taylor Co-Founder, President, and CEO
“Skilled nursing is an industry that hasn’t seen much capital invested in new product,” said John Taylor, StoneGate’s co-founder, president, and CEO. “We look to build new facilities in markets where there hasn’t been a new asset built in the last 15 to 40 years.”

A rising tide
The need for skilled nursing facilities and expertise is clearly on the rise, as the first of the baby boomers began turning 60 in 2006. With more Americans rapidly reaching their senior years, the need for skilled care will become even more pressing.

This is where StoneGate Senior Care comes in. A long-term healthcare management company based in Texas, StoneGate builds, manages, and provides support services to skilled nursing, independent living, assisted living, and memory care facilities. Although the independent and assisted living components, as well as memory care, are key parts of its business, Taylor believes the skilled nursing aspect will always be central to its operations. The challenge is navigating the highly regulated waters of the skilled nursing industry.

“Skilled nursing is more regulated than hospitals. While it serves in many ways for the good of the consumer, it has provided protectionism for operators who run older buildings,” said Taylor, noting the regulations serve as a disincentive for new operators to build new assets, particularly in the majority of states with a certificate of need requirement. “It isn’t unusual to see a virtual moratorium on the granting of new certificates, so there is no motivation for operators to upgrade because there is little competition.”

By contrast, most StoneGate-managed facilities are new, having been built in the last six years. The newest facility, the Villages of Jackson Creek in Independence, Mo., is its first move out of Texas. The $22 million building opened its doors last December.

“The properties we manage have a resident capacity today of 3,250 residents with 10 projects in the construction development pipeline, which will add another 1,500 residents even if we don’t start anything else in the next 16 months,” Taylor said, noting StoneGate is in the process of expanding into Oklahoma. “We consider this a regional business, so we’re looking to expand and offer our management services in the south central part of the country, staying in Texas and states that are contiguous or one state away.”

Making changes
StoneGate recently invested in technological improvements to its internal processes. The company is currently in the implementation phase of new accounting and payroll software and is also in the process of redesigning its Web site to include a robust intranet. This will allow for the creation of Web-enabled tools for management, HR, accounting, and dietary and environmental services, providing support resources that all facilities can access easily. StoneGate is also beta testing an electronic charting software system in two of its 30 buildings.

“Other facilities will follow as we work through the bumps,” said Taylor. “When we feel like we have control of the system, we’ll roll it out in all of the buildings.”

Taylor noted skilled nursing was the last sector of senior housing to undergo significant culture change. StoneGate took its cue from changes made by hospitals and other providers. In the last decade, hospitals moved to a private room model. Today, virtually all hospitals in the Dallas-Ft. Worth metro area have private rooms.

“If you look at the nature of assets that have been built in the last 10 to 15 years in independent and assisted living, the products have become more consumer friendly. There was no reason skilled nursing shouldn’t do the same,” Taylor said.

With an expanding customer base and a growing physical footprint, StoneGate is perfectly positioned to continue its growth into its second decade of operations. But Taylor knows the status quo will not remain constant for long. As the population ages, service demands are sure to evolve, and StoneGate must be progressive enough to see those changes coming and react.

“Our challenge is to find people who can understand and execute our business model and who aren’t intimidated by change. Businesses that serve seniors will inevitably change because, as each generation enters old age, expectations will change,” he said. “What we do today may not be acceptable to future generations, so we will need to tailor our services to suit the consumer’s needs.”
 
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